If Forex is in your wheelhouse, you've no doubt noticed the recent decline in the US dollar against other major currencies. The Dollar Index has been pretty shaky as of late, but the current trend in the aftermath of the worst of the coronavirus pandemic is lower, with no bottom in sight.
After sinking to 94.89 on the 3rd of March, the dollar leapt back to an interim high of 102.82 on March 20th. Wednesday's quote was 95.96, a decline of nearly seven precent, most of that happening within the last three weeks.
That's not surprising, given that American cities have been beset upon by hordes of protesters, complete with rioters, looters, cop killings, tear gassings, rubber bullet maimings, autonomous zones (Seattle's Capitol Hill is one, recently claimed and occupied by protesters as police vacated the 3rd Precinct) and general lawlessness, making dollar holdings somewhat of a risky bet in the near term and, as dollar dominance recedes, maybe for much longer.
At the conclusion of the Fed's Tuesday and Wednesday's FOMC policy meeting, Chairman Jerome Powell made a definitive statement on interest rates, saying that the overnight federal funds rate would remain at the zero-bound at least until 2022. That kind of central bank sentiment doesn't exactly inspire confidence in the world's reserve currency. It indicates nothing less than a failure of financial system underpinning, a condition that first appeared in 2007, was not adequately addressed and has now become a systemic crisis without hope of positive resolution.
While the Fed still has the monetary muscle to backstop financial assets it does so with counterfeit, a fictional fiat currency without backing that eventually will be worthless. History has shown this to always be the case. Fiat currencies die and a new financial system is erected. Normally, the new system is backed by gold or silver, or a combination of the two. This time is no different than any other. The Federal Reserve and other central banks can continue their charade for only so long. Eventually, income disparity results in runaway inflation and widespread poverty, prompting clamor from the masses, which we are witnessing on a global scale today as an epochal societal revolution.
Such incalculable convulsions encourage escape from the clutches of unfair finances promulgated by central banks. People seek refuge from currencies that are losing value rapidly. Housing, health care, and eventually, food become unaffordable to the vast swath of middle and lower classes. Alternatives are sought. Gold and silver are the most readily available to the public. Silver becomes particularly of interest due to its lower price points. The availability of metallic money becomes a point of contention as people with limited means crowd into the space, which is exactly what's happened since the onset of the coronavirus.
A 10 troy ounce gold bar at Apmex.com is offered for $18,255.90. At Scottsdale Mint, the popular one ounce silver bar dubbed "The One" starts at $25.05 and goes down in price to $23.42 depending on quantity and method of payment. Of course, given that one would be willing to pay a price that carries a premium of seven dollars over spot, one would be out of luck, as "The One" is currently out of stock.
These are just a few examples of what happens when a confluence of events (pandemic, endless fiat currency creation, summer-long protests, high unemployment, rampant inflation) strikes the minds of people with money and assets. They either go with the flow and stay in stocks or look to gold and/or silver for some safety. With bonds yielding little to nothing - sometimes less than that via negative rates - and default risk rising (hello, Argentina!), precious metals offer a reasonable alternative.
Futures and spot prices for the precious metals might as well be cast upon stones for what they fail to deliver in terms of price discovery. Being holdovers from the failing fiat regime, they are being left behind as physical holdings dominate the marketplace. Prices are exploding on eBay and at dealers, as shown in the examples above. Money Daily tracks prices on eBay for one ounce gold and silver coins and bars weekly in it's Weekend Wrap every Sunday.
Other ways to deploy currency are in art, collectibles (comic book prices are through the roof), vintage automobiles, commodity futures, real estate, ad other asset classes, but none of those share the characteristics of precious metals as real money, except possibly cryptocurrencies like Bitcoin.
Wall Street, the Federal Reserve, and the federal government are hanging onto their prized positions of monetary and political authority by their teeth. It's only a matter of time before all of it fails. The nationwide protests are proof that the federal government is losing control of the country in manifest ways. Unrelenting gains in precious metal prices - and the attendant, repeated attempts to contain those gains in the futures markets - is evidence of the Fed's desperation, just as Wall Street's recent snapback rally is a mirage based on easily available fiat currency and nothing else.
It's all tumbling down and there's nothing that can stop it. The demise of the dollar has been an ongoing orgy of dislocation for decades. Trillions of dollars added to the Fed's balance sheet, euros at the ECB, yen at the Bank of Japan, yuan at at PBOC are mere stop-gap measures which do not address the underlying solvency issues. If the stock market crash in March wasn't enough to scare people out of stocks and fiat, the coming wave will surely devastate those who failed to heed the warning. Via the Fed's emergency measures, Wall Street has given investors a golden opportunity to diversify out of stocks. Those who fail to take the opportunity will suffer a heavy economic blow.
At the Close, Wednesday, June 10, 2020:
Dow: 26,989.99, -282.31 (-1.04%)
NASDAQ: 10,020.35, +66.59 (+0.67%)
S&P 500: 3,190.14, -17.04 (-0.53%)
NYSE: 12,449.22, -170.30 (-1.35%)
Showing posts with label bitcoin. Show all posts
Showing posts with label bitcoin. Show all posts
Thursday, June 11, 2020
Wednesday, May 13, 2020
Stocks Triggered By Federal Reserve EFT Buys, Negative Interest Rate Fears; PTJ Buys Bitcoin
Once more, the Dow Jones Industrial Average failed to break above a key level, giving up morning gains after President Trump reiterated his desire for the Fed to entertain negative interest rates. Bank stocks were especially hard hit as the belief is that rates below zero would further hamper their ability to control the spread and turn profits despite the ability to skim directly from deposit accounts via the minus sign on yields.
Alongside the president's tweeting, the Federal Reserve began purchasing corporate debt ETFs, beginning with investment grade bonds but eventually swinging down the ladder to high yield, among the most dodgy and riskiest of fixed income products. The intent was announced on March 23, as a response to the coronavirus epidemic, and put into practice during Tuesday's session, with investment firm, BlackRock, as the intermediary, using funds from the Fed and US Treasury.
Seen as the ultimate backstop for stocks and the debt market, the scheme is one of nine separate facilities the Fed is employing to help stabilize - or in most cases, pump higher - markets.
The various backstops being deployed by the Fed, in conjunction with the currency-killing qualities of negative interest rates should eventually result in a gigantic bubble in the Fed's balance sheet, holding investment vehicles that are headed straight to the fiat scrapyard, another sign that the world is heading toward a currency crisis and a new monetary regime.
The attempt to vault beyond the 50% retrace of the March collapse was the third in the past month. The Dow peaked on April 17 when it closed at 24,633.86. After Tuesday's selloff, the head-and-shoulders chart pattern is clearly defined, a strong signal that a major decline is likely.
In recent days, and just prior to its halving, Paul Tudor Jones has bought into Bitcoin, expressing his view that the cryptocurrency will act as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s.
In a quote that is certain to become his trademark, Jones, founder and CEO of Tudor Investment Corp., said:
Unabashedly, Jones believes Bitcoin will win the investment race over the coming years, along with gold, silver and other hard assets.
Jones' entry into the crypto-market stands in stark contrast to famed investor Warren Buffet and his holding company Berkshire Hathaway. Buffet has openly stated that he would never invest in gold or Bitcoin. After selling off his positions in the airlines at a sizable loss, Buffet's Berkshire Hathaway is sitting on some $150 billion in cash, loathing the concept that he finds nothing of compelling value to purchase presently.
Obviously, one of these investing titans is going to be proven wrong. It appears that at the present time, Jones may be holding the winning hand, or, in racing parlance, the live long shot.
At the Close, Tuesday, May 12, 2020:
Dow: 23,764.78, -457.21 (-1.89%)
NASDAQ: 9,002.55, -189.79 (-2.06%)
S&P 500: 2,870.12, -60.20 (-2.05%)
NYSE: 11,055.58, -225.78 (-2.00%)
Alongside the president's tweeting, the Federal Reserve began purchasing corporate debt ETFs, beginning with investment grade bonds but eventually swinging down the ladder to high yield, among the most dodgy and riskiest of fixed income products. The intent was announced on March 23, as a response to the coronavirus epidemic, and put into practice during Tuesday's session, with investment firm, BlackRock, as the intermediary, using funds from the Fed and US Treasury.
Seen as the ultimate backstop for stocks and the debt market, the scheme is one of nine separate facilities the Fed is employing to help stabilize - or in most cases, pump higher - markets.
The various backstops being deployed by the Fed, in conjunction with the currency-killing qualities of negative interest rates should eventually result in a gigantic bubble in the Fed's balance sheet, holding investment vehicles that are headed straight to the fiat scrapyard, another sign that the world is heading toward a currency crisis and a new monetary regime.
The attempt to vault beyond the 50% retrace of the March collapse was the third in the past month. The Dow peaked on April 17 when it closed at 24,633.86. After Tuesday's selloff, the head-and-shoulders chart pattern is clearly defined, a strong signal that a major decline is likely.
In recent days, and just prior to its halving, Paul Tudor Jones has bought into Bitcoin, expressing his view that the cryptocurrency will act as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s.
In a quote that is certain to become his trademark, Jones, founder and CEO of Tudor Investment Corp., said:
“The best profit-maximizing strategy is to own the fastest horse.”
Unabashedly, Jones believes Bitcoin will win the investment race over the coming years, along with gold, silver and other hard assets.
Jones' entry into the crypto-market stands in stark contrast to famed investor Warren Buffet and his holding company Berkshire Hathaway. Buffet has openly stated that he would never invest in gold or Bitcoin. After selling off his positions in the airlines at a sizable loss, Buffet's Berkshire Hathaway is sitting on some $150 billion in cash, loathing the concept that he finds nothing of compelling value to purchase presently.
Obviously, one of these investing titans is going to be proven wrong. It appears that at the present time, Jones may be holding the winning hand, or, in racing parlance, the live long shot.
At the Close, Tuesday, May 12, 2020:
Dow: 23,764.78, -457.21 (-1.89%)
NASDAQ: 9,002.55, -189.79 (-2.06%)
S&P 500: 2,870.12, -60.20 (-2.05%)
NYSE: 11,055.58, -225.78 (-2.00%)
Friday, December 22, 2017
Stocks Churn; Bitcoin Crashing
Following Monday's start-the-week-off-right rally, stocks have gyrated about the flatline the rest of the week, signaling that a good number of major players have already left the exchanges for holidays and that the recently-completed tax reform bill has been almost completely priced into stocks.
Thus, we're left with little other than churn as the days before Christmas dwindle to none. There are likely to be few surprises on Wall Street as the week closes out, though overnight, the cryptocurrency world had plenty upon which to contemplate going forward.
Bitcoin, the gold standard of cryptos, crashed below $13,000, marking a 17% drop in less than the past 24 hours.
A number of suspect factors are to blame for its recent demise, those consisting largely of rumors and some fact, such as large "whale" investors getting out while the mania is still hot, the emergence of Hashgraph, which was of mention here yesterday, and the abrupt realization by more than a few people that Bitcoin - due primarily to the severe slowness of clearing transactions and the unwieldy large amount of computing power necessary to mine coins - is unreliable and unworkable as a currency.
Within a short time, it's highly likely that bitcoin could be trading in the hundreds of dollars rather than in the thousands. Recall that its current price was largely achieved in just the past 12 months, growing from sub-1000 at the start of the year.
Other cryptos are being mercilessly battered, led by IOTA, down nearly 40% overnight, denoting the downside of 24/7 markets.
What goes up, must come down, and that is the lesson for the day. Stocks will also suffer at some point, though betting on that happening has been a fool's game since the worrisome days of 2008-09.
For now, it looks like a quiet day of trading stocks ahead, with downside risk prominent.
At the Close, Thursday, December 21, 2017:
Dow: 24,782.29, +55.64 (+0.23%)
NASDAQ: 6,965.36, +4.40 (+0.06%)
S&P 500: 2,684.57, +5.32 (+0.20%)
NYSE Composite: 12,800.21, +52.66 (+0.41%)
Thus, we're left with little other than churn as the days before Christmas dwindle to none. There are likely to be few surprises on Wall Street as the week closes out, though overnight, the cryptocurrency world had plenty upon which to contemplate going forward.
Bitcoin, the gold standard of cryptos, crashed below $13,000, marking a 17% drop in less than the past 24 hours.
A number of suspect factors are to blame for its recent demise, those consisting largely of rumors and some fact, such as large "whale" investors getting out while the mania is still hot, the emergence of Hashgraph, which was of mention here yesterday, and the abrupt realization by more than a few people that Bitcoin - due primarily to the severe slowness of clearing transactions and the unwieldy large amount of computing power necessary to mine coins - is unreliable and unworkable as a currency.
Within a short time, it's highly likely that bitcoin could be trading in the hundreds of dollars rather than in the thousands. Recall that its current price was largely achieved in just the past 12 months, growing from sub-1000 at the start of the year.
Other cryptos are being mercilessly battered, led by IOTA, down nearly 40% overnight, denoting the downside of 24/7 markets.
What goes up, must come down, and that is the lesson for the day. Stocks will also suffer at some point, though betting on that happening has been a fool's game since the worrisome days of 2008-09.
For now, it looks like a quiet day of trading stocks ahead, with downside risk prominent.
At the Close, Thursday, December 21, 2017:
Dow: 24,782.29, +55.64 (+0.23%)
NASDAQ: 6,965.36, +4.40 (+0.06%)
S&P 500: 2,684.57, +5.32 (+0.20%)
NYSE Composite: 12,800.21, +52.66 (+0.41%)
Thursday, December 21, 2017
Wall Street Yawns at Tax Reform; Hashgraph May Supercede Bitcoin
Wall Streeters aren't completely happy with the tax reform package that passed both houses of congress on Wednesday, despite howls of victory from assembled Republicans at the White House. If they had, the "sell the news" trading of the past two days would have been overwhelmed by a furious buying frenzy as US corporations see their federal tax burden reduced from 35% to 21%, below the world average.
While the politicians are happy back-slapping each other and highly paid traders on Wall Street see their tax burden increase due to the loss of some deductions for local taxes (SALT), there are bigger, less-well-defined events occurring far from DC or New York.
Bitcoin and other cryptocurrencies are all the rage, now that the CBOE has gotten into the game with bitcoin futures trading, assuring that the financial genii that DID NOT invent blockchain technology will be able to participate.
That's all the more reason that crypto is soaring, both in value and interest. The promise of the blockchain was initially to exclude current government and financial entities (banks, brokers, exchanges) from transactions, freeing up the new "money."
That has changed, but, outside that, a newer, potentially even more disruptive idea has emerged: Hashgraph, which speeds up transaction processing by light years over Bitcoin and provides even better security and privacy in a distributed ledger environment.
It's the latest development in a fast-changing game and deserves full attention to anyone who is thinking about freedom. Mike Maloney has put together an interesting look behind the scenes of the crypto world in his latest installment of the Hidden Secrets of Money (Episode 8) in Bitcoin to Hashgraph: The Crypto Revolution.
The video is over an hour long, but it should be tops on every Christmas list for thinking individuals, silver and gold bugs, heads of companies and anybody looking for better solutions than tax brackets, thousands of pages of federal tax code (estimated at over 70,000), a puzzling phalanx of rules, regulations and confusing calculations all of which are the bread and butter of the stock market and fractional reserve skimmers.
A day will come when stock prices, interest rates, and tax considerations aren't the most important financial parameters. That day is coming sooner than many people with knowledge want to accept.
Happy (Hashgraph) Holidays.
At the Close, Wednesday, December 20, 2017:
Dow: 24,726.65, -28.10 (-0.11%)
NASDAQ: 6,960.96, -2.89 (-0.04%)
S&P 500: 2,679.25, -2.22 (-0.08%)
NYSE Composite: 12,747.55, +0.01 (0.00%)
While the politicians are happy back-slapping each other and highly paid traders on Wall Street see their tax burden increase due to the loss of some deductions for local taxes (SALT), there are bigger, less-well-defined events occurring far from DC or New York.
Bitcoin and other cryptocurrencies are all the rage, now that the CBOE has gotten into the game with bitcoin futures trading, assuring that the financial genii that DID NOT invent blockchain technology will be able to participate.
That's all the more reason that crypto is soaring, both in value and interest. The promise of the blockchain was initially to exclude current government and financial entities (banks, brokers, exchanges) from transactions, freeing up the new "money."
That has changed, but, outside that, a newer, potentially even more disruptive idea has emerged: Hashgraph, which speeds up transaction processing by light years over Bitcoin and provides even better security and privacy in a distributed ledger environment.
It's the latest development in a fast-changing game and deserves full attention to anyone who is thinking about freedom. Mike Maloney has put together an interesting look behind the scenes of the crypto world in his latest installment of the Hidden Secrets of Money (Episode 8) in Bitcoin to Hashgraph: The Crypto Revolution.
The video is over an hour long, but it should be tops on every Christmas list for thinking individuals, silver and gold bugs, heads of companies and anybody looking for better solutions than tax brackets, thousands of pages of federal tax code (estimated at over 70,000), a puzzling phalanx of rules, regulations and confusing calculations all of which are the bread and butter of the stock market and fractional reserve skimmers.
A day will come when stock prices, interest rates, and tax considerations aren't the most important financial parameters. That day is coming sooner than many people with knowledge want to accept.
Happy (Hashgraph) Holidays.
At the Close, Wednesday, December 20, 2017:
Dow: 24,726.65, -28.10 (-0.11%)
NASDAQ: 6,960.96, -2.89 (-0.04%)
S&P 500: 2,679.25, -2.22 (-0.08%)
NYSE Composite: 12,747.55, +0.01 (0.00%)
Friday, December 8, 2017
Stocks End Week Higher; Bitcoin Still Bubbly; Gold, Silver Pounded Lower
Stocks got back to rising without worry on Friday following the 238,000 new jobs reported in November, according to the BLS' non-farm payroll data.
The Dow, S&P, and Composite set new all-time high closing marks, the NASDAQ falling short of a record by 74 points, due primarily to the drubbing of the FAANGs late last week and early this week. Highly speculative tech stocks are considered to be benefited least of all companies by the tax bill currently coursing its way through congress, thus, some investors were shunning the sector for that reason. Others were likely taking profits after what is looking like a banner year for the tech leaders.
Bonds ended the week with a quiet session, the curve steepening ever so slightly, with the short-duration issues yielding the same or .01% more, while the 10-year-note yield was bumped a pip higher, to 2.38%.
The curve is still quite flat, with the spread between 2s and 30s only 98 basis points (0.98%). In other words, investors are flocking to short terms, which spells long-term trouble. In more normal times, a 30-year treasury bond would be yielding five from seven percent, but, even with the economy growing - albeit sluggishly - long-dated commitments are out of fashion. Lending the government money for a long period of time will only produce a return of 2.75%, hardly anything upon which one would hang a retirement fund. The federal government, if one believes in free market economics, is not a worthy bet from more than a few years.
Difficult to believe, but would you put your money at risk for an additional 20 years for an extra 0.37% return (the difference between the ten-year and the 30 year)? Probably not, and expert bond traders apparently agree.
No report would be complete without mentioning Bitcoin, which galloped above $17,000 on Thursday, but dropped back to just under $16,000 Friday, capping a week which it began just below $12,000 per coin.
On the flip side (pun intended), gold and silver were beaten down all week, sending silver to a loss year-to-date. Looks like a buying opportunity in the physical mining and bullion sector which has been the poster children for underperformance the past four years.
At the Close, Friday, December 8, 2017:
Dow: 24,329.16, +117.68 (+0.49%)
NASDAQ: 6,840.08, +27.24 (+0.40%)
S&P 500: 2,651.50, +14.52 (+0.55%)
NYSE Composite: 12,643.06, +74.08 (+0.59%)
Gold: 1,245.90, -3.90 (-0.31%)
Silver: 15.73, +0.01 (+0.06%)
For the week:
Dow: +97.57 (+0.40%)
NASDAQ: -7.51 (-0.11%)
S&P 500: +9.28 (+0.35%)
NYSE Composite: +28.50 (+0.23%)
The Dow, S&P, and Composite set new all-time high closing marks, the NASDAQ falling short of a record by 74 points, due primarily to the drubbing of the FAANGs late last week and early this week. Highly speculative tech stocks are considered to be benefited least of all companies by the tax bill currently coursing its way through congress, thus, some investors were shunning the sector for that reason. Others were likely taking profits after what is looking like a banner year for the tech leaders.
Bonds ended the week with a quiet session, the curve steepening ever so slightly, with the short-duration issues yielding the same or .01% more, while the 10-year-note yield was bumped a pip higher, to 2.38%.
The curve is still quite flat, with the spread between 2s and 30s only 98 basis points (0.98%). In other words, investors are flocking to short terms, which spells long-term trouble. In more normal times, a 30-year treasury bond would be yielding five from seven percent, but, even with the economy growing - albeit sluggishly - long-dated commitments are out of fashion. Lending the government money for a long period of time will only produce a return of 2.75%, hardly anything upon which one would hang a retirement fund. The federal government, if one believes in free market economics, is not a worthy bet from more than a few years.
Difficult to believe, but would you put your money at risk for an additional 20 years for an extra 0.37% return (the difference between the ten-year and the 30 year)? Probably not, and expert bond traders apparently agree.
No report would be complete without mentioning Bitcoin, which galloped above $17,000 on Thursday, but dropped back to just under $16,000 Friday, capping a week which it began just below $12,000 per coin.
On the flip side (pun intended), gold and silver were beaten down all week, sending silver to a loss year-to-date. Looks like a buying opportunity in the physical mining and bullion sector which has been the poster children for underperformance the past four years.
At the Close, Friday, December 8, 2017:
Dow: 24,329.16, +117.68 (+0.49%)
NASDAQ: 6,840.08, +27.24 (+0.40%)
S&P 500: 2,651.50, +14.52 (+0.55%)
NYSE Composite: 12,643.06, +74.08 (+0.59%)
Gold: 1,245.90, -3.90 (-0.31%)
Silver: 15.73, +0.01 (+0.06%)
For the week:
Dow: +97.57 (+0.40%)
NASDAQ: -7.51 (-0.11%)
S&P 500: +9.28 (+0.35%)
NYSE Composite: +28.50 (+0.23%)
Thursday, December 7, 2017
Stocks Continue to Stall While Crypto Goes Wild; Silver Down for 2017
Stocks continued to plan through the early days of December, giving up early gains to close mixed to down on the day.
Overnight, Bitcoin careened through $13,000, $14,000, and $15,000 per coin to set all-time highs in an unprecedented move.
While the cryptocurrencies may have Wall Street and central banks on the ropes, it hasn't presented the chief manipulators of precious metals from pounding down gold and silver, the latter of which dropped below $16 per ounce, leaving it down for the year.
Bonds were bid, dropping yields, though the curve remained stubbornly flat. With the FOMC meeting less than a week ahead, declining bond yields may give the Fed reason to pause on their planned federal funds rate increase.
Meanwhile, Washington, DC is working out an emergency continuing resolution, designed to keep the government running for at least a few more weeks.
Amid all the political and monetary madness, stocks remain resilient, though the recent lag may be a sign that gains for the year may be already locked in to many portfolios.
Other than Bitcoin, which has entered either a bubble or mania stage, and precious metals, which are a screaming buy, there doesn't seem to be much to tantalize the usual stock purchasers. Valuations have been stretched, and, with Novemebr non-farm payroll data due out Friday morning, Thursday is setting up to be another day of divestiture and consolidation.
At the Close, Wednesday, December 6, 2017:
Dow: 24,140.91, -39.73 (-0.16%)
NASDAQ: 6,776.38, +14.16 (+0.21%)
S&P 500: 2,629.27, -0.30 (-0.01%)
NYSE Composite: 12,532.43, -34.73 (-0.28%)
Overnight, Bitcoin careened through $13,000, $14,000, and $15,000 per coin to set all-time highs in an unprecedented move.
While the cryptocurrencies may have Wall Street and central banks on the ropes, it hasn't presented the chief manipulators of precious metals from pounding down gold and silver, the latter of which dropped below $16 per ounce, leaving it down for the year.
Bonds were bid, dropping yields, though the curve remained stubbornly flat. With the FOMC meeting less than a week ahead, declining bond yields may give the Fed reason to pause on their planned federal funds rate increase.
Meanwhile, Washington, DC is working out an emergency continuing resolution, designed to keep the government running for at least a few more weeks.
Amid all the political and monetary madness, stocks remain resilient, though the recent lag may be a sign that gains for the year may be already locked in to many portfolios.
Other than Bitcoin, which has entered either a bubble or mania stage, and precious metals, which are a screaming buy, there doesn't seem to be much to tantalize the usual stock purchasers. Valuations have been stretched, and, with Novemebr non-farm payroll data due out Friday morning, Thursday is setting up to be another day of divestiture and consolidation.
At the Close, Wednesday, December 6, 2017:
Dow: 24,140.91, -39.73 (-0.16%)
NASDAQ: 6,776.38, +14.16 (+0.21%)
S&P 500: 2,629.27, -0.30 (-0.01%)
NYSE Composite: 12,532.43, -34.73 (-0.28%)
Tuesday, November 28, 2017
Fittingly, Bitcoin Nears $10,000 on Cyber Monday
Catching a ten-bagger is a noteworthy event in any trader's history, but believers in Bitcoin - the original and most prominent cryptocurrency on the planet - are enjoying their days in the sun as the currency heads for $10,000, currently trading for more than $9900 per digital coin.
Bitcoin ended 2016 at a mere $970.17, but it's gone completely bonkers in 2017 as more and more people adopt the digital currency as a hedge against the faults of fiat currencies of central bankers that are based on nothing but faith.
While bitcoin is similarly faith-based, it has properties that traditional currencies do not. It is anonymous, and also not subject to excessive printing of fresh fiat out of thin air. The number of bitcoins mined is capped at 21 million. There are only four million left to be mined. After that, there can be no more Bitcoins ever created, so the currency has an inflation governor that is rivaled only by gold, silver and other precious metals.
This advantage is not lost on holders and speculators in Bitcoin. As acceptance and adoption grows, the number of bitcoin holders naturally ratchets up the price. As of this writing, Bitcoin's market cap is higher than many major corporations, making the digital currency something that keeps central bankers on their toes.
Widespread acceptance of Bitcoin threatens the central bank stranglehold on global forex, currencies and commerce. While this speculative phase is phenomenal for early adopters (some who bought into the Bitcoin mania before it was even priced in triple digits), the long-term implications are other-worldly. If Bitcoin - or some other form of cryptocurrency continues to be established globally - it could conceivably rival currencies such as the US dollar, the euro, Japanese yen or China's yuan.
Just as gold and silver have been recognized as money, currency and stores of value for thousands of years, so too, Bitcoin has emerged as a potentially viable alternative for the 21st century.
At the Close, Monday, November 27, 2017:
Dow: 23,580.78, +22.79 (+0.10%)
NASDAQ: 6,878.52, -10.64 (-0.15%)
S&P 500: 2,601.42, -1.00 (-0.04%)
NYSE Composite: 12,390.78, -31.15 (-0.25%)
Bitcoin ended 2016 at a mere $970.17, but it's gone completely bonkers in 2017 as more and more people adopt the digital currency as a hedge against the faults of fiat currencies of central bankers that are based on nothing but faith.
While bitcoin is similarly faith-based, it has properties that traditional currencies do not. It is anonymous, and also not subject to excessive printing of fresh fiat out of thin air. The number of bitcoins mined is capped at 21 million. There are only four million left to be mined. After that, there can be no more Bitcoins ever created, so the currency has an inflation governor that is rivaled only by gold, silver and other precious metals.
This advantage is not lost on holders and speculators in Bitcoin. As acceptance and adoption grows, the number of bitcoin holders naturally ratchets up the price. As of this writing, Bitcoin's market cap is higher than many major corporations, making the digital currency something that keeps central bankers on their toes.
Widespread acceptance of Bitcoin threatens the central bank stranglehold on global forex, currencies and commerce. While this speculative phase is phenomenal for early adopters (some who bought into the Bitcoin mania before it was even priced in triple digits), the long-term implications are other-worldly. If Bitcoin - or some other form of cryptocurrency continues to be established globally - it could conceivably rival currencies such as the US dollar, the euro, Japanese yen or China's yuan.
Just as gold and silver have been recognized as money, currency and stores of value for thousands of years, so too, Bitcoin has emerged as a potentially viable alternative for the 21st century.
At the Close, Monday, November 27, 2017:
Dow: 23,580.78, +22.79 (+0.10%)
NASDAQ: 6,878.52, -10.64 (-0.15%)
S&P 500: 2,601.42, -1.00 (-0.04%)
NYSE Composite: 12,390.78, -31.15 (-0.25%)
Friday, August 11, 2017
Stocks Extend Slide Amid Noth Korea, US Bombast, But It's Not Serious
Just in case there needs to be an excuse to sell overpriced stocks, there's always North Korea and the nit-wit leader Kim Jong-un.
A bone fide nutjob, the second child of Kim Jong-il, 33-year-old Jong-un has, in his brief stint as self-appointed supreme leader of North Korea, managed to elevate himself and his gulag of a nation onto the global stage and capture the spotlight with various treats, missile launches, nuclear ambitions and plenty of help from international media seeking sensationalism with which to scare an unsuspecting public.
With bombastic President Trump entering the fray earlier this year, Jong-un has found the perfect Dean Martin straight man for his Jerry Lewis-like antics. A master of the tweet-storm, Trump takes Jong-un seriously, which helps amp up the rhetoric with bold statements and unveiled threats in response to Jong-un's madness. The two could make a fortune on the stages of Las Vegas, if only the State Department would allow Jong-un entry to the US mainland.
What the international war of words has to do with stocks is roughly nothing. Until actual bombs start raining down, the prattling between the leaders of the United States and North Korea is more about television and radio ratings than the prices of Apple, Alphabet, or Alcoa.
However, as stated at the top of this missive, Wall Street specialists are taking the opportunity to dump out of high-flying stocks with near-reckless abandon, sending the major indices to their biggest losses in six months on Thursday, extending the minor losses from Wednesday into something worth noticing.
The selling has also not been limited to just US stocks. As the talk has become more bellicose, the drops on major foreign markets in Europe, Asia, and the Americas have been extended. As of Friday morning in the US, most of Asia and Europe are suffering losses of between one and two percent, though the Nikkei 225 is bucking the trend, down only slightly, nearly flat on the day.
That brings up an interesting topic: if Japan's major market isn't taking this "international nuclear stand-off" with the requisite seriousness, should anybody else?
Probably not, but, this is as good a time as any to take profits. The congress and the president are pretty much on vacation until after Labor Day, but, when they get back to pretending they're doing something constructive, they'll be tackling the ticklish issues of the debt ceiling (along with the attendant threats of shutting down the government - yeah!) and coming up with something resembling a federal budget.
On the latter, hashing out a budget between the Trump administration and the overwhelmingly free-spending congress ought to be some serious comedy. Trump would love to balance the federal budget, but congress intends to drown the nation in even more debt. In case anybody is still keeping score, the federal debt burden stands at close to $20 billion, but, according to the US Debt Clock, it's been stuck there for a few months due to extraordinary measures taken by Treasury and some unforeseen savings on the administration's end.
The congress is not happy about this and will make sure to pile up more debt in the months ahead, making the budget process the go-to, must see entertainment venue for the fall TV season.
So, unless the bottom falls out of the market on Friday, August 11, this is nothing more than profit-taking by people who actually know what they're doing and don't respond in knee-jerk fashion to the pronouncements of madmen and the tweets of presidents.
Meantime, the recent news frame has been good for bonds, gold and silver, all of which have had three straight sessions of unimpeded gains. Gold is approaching $1300 an ounce, the 10-year note is yielding 2.21% and silver broke through $17 per ounce on Thursday. What is not working, still, is oil, which appears unable to pierce the $50/barrel level, which shouldn't be an issue. There remains a massive glut, oversupply, slack demand due to slow economic growth globally and no pricing power anywhere from Riyadh to Russia. Oil should be less than $40 per barrel, though resistance is great, led by the global energy cartel with the help from central bankers who simply cannot stomach any more deflation in anything.
With that, stocks in the US are setting up for another scary open to the downside, but it's probably nothing more than a bump in the road. The real action is still a month away, and even then, the Fed has Wall Street's back. Unless something really serious occurs, there's likely not to be any major turn in the stock markets, though the same cannot be assumed about commodities, bonds, precious metals, or even crypto-currencies like Bitcoin.
At the Close, 8/10/17:
Dow: 21,844.01, -204.69 (-0.93%)
NASDAQ: 6,216.87, -135.46 (-2.13%)
S&P 500: 2,438.21, -35.81 (-1.45%)
NYSE Composite: 11,771.60, -157.87 (-1.32%)
A bone fide nutjob, the second child of Kim Jong-il, 33-year-old Jong-un has, in his brief stint as self-appointed supreme leader of North Korea, managed to elevate himself and his gulag of a nation onto the global stage and capture the spotlight with various treats, missile launches, nuclear ambitions and plenty of help from international media seeking sensationalism with which to scare an unsuspecting public.
With bombastic President Trump entering the fray earlier this year, Jong-un has found the perfect Dean Martin straight man for his Jerry Lewis-like antics. A master of the tweet-storm, Trump takes Jong-un seriously, which helps amp up the rhetoric with bold statements and unveiled threats in response to Jong-un's madness. The two could make a fortune on the stages of Las Vegas, if only the State Department would allow Jong-un entry to the US mainland.
What the international war of words has to do with stocks is roughly nothing. Until actual bombs start raining down, the prattling between the leaders of the United States and North Korea is more about television and radio ratings than the prices of Apple, Alphabet, or Alcoa.
However, as stated at the top of this missive, Wall Street specialists are taking the opportunity to dump out of high-flying stocks with near-reckless abandon, sending the major indices to their biggest losses in six months on Thursday, extending the minor losses from Wednesday into something worth noticing.
The selling has also not been limited to just US stocks. As the talk has become more bellicose, the drops on major foreign markets in Europe, Asia, and the Americas have been extended. As of Friday morning in the US, most of Asia and Europe are suffering losses of between one and two percent, though the Nikkei 225 is bucking the trend, down only slightly, nearly flat on the day.
That brings up an interesting topic: if Japan's major market isn't taking this "international nuclear stand-off" with the requisite seriousness, should anybody else?
Probably not, but, this is as good a time as any to take profits. The congress and the president are pretty much on vacation until after Labor Day, but, when they get back to pretending they're doing something constructive, they'll be tackling the ticklish issues of the debt ceiling (along with the attendant threats of shutting down the government - yeah!) and coming up with something resembling a federal budget.
On the latter, hashing out a budget between the Trump administration and the overwhelmingly free-spending congress ought to be some serious comedy. Trump would love to balance the federal budget, but congress intends to drown the nation in even more debt. In case anybody is still keeping score, the federal debt burden stands at close to $20 billion, but, according to the US Debt Clock, it's been stuck there for a few months due to extraordinary measures taken by Treasury and some unforeseen savings on the administration's end.
The congress is not happy about this and will make sure to pile up more debt in the months ahead, making the budget process the go-to, must see entertainment venue for the fall TV season.
So, unless the bottom falls out of the market on Friday, August 11, this is nothing more than profit-taking by people who actually know what they're doing and don't respond in knee-jerk fashion to the pronouncements of madmen and the tweets of presidents.
Meantime, the recent news frame has been good for bonds, gold and silver, all of which have had three straight sessions of unimpeded gains. Gold is approaching $1300 an ounce, the 10-year note is yielding 2.21% and silver broke through $17 per ounce on Thursday. What is not working, still, is oil, which appears unable to pierce the $50/barrel level, which shouldn't be an issue. There remains a massive glut, oversupply, slack demand due to slow economic growth globally and no pricing power anywhere from Riyadh to Russia. Oil should be less than $40 per barrel, though resistance is great, led by the global energy cartel with the help from central bankers who simply cannot stomach any more deflation in anything.
With that, stocks in the US are setting up for another scary open to the downside, but it's probably nothing more than a bump in the road. The real action is still a month away, and even then, the Fed has Wall Street's back. Unless something really serious occurs, there's likely not to be any major turn in the stock markets, though the same cannot be assumed about commodities, bonds, precious metals, or even crypto-currencies like Bitcoin.
At the Close, 8/10/17:
Dow: 21,844.01, -204.69 (-0.93%)
NASDAQ: 6,216.87, -135.46 (-2.13%)
S&P 500: 2,438.21, -35.81 (-1.45%)
NYSE Composite: 11,771.60, -157.87 (-1.32%)
Wednesday, July 27, 2016
FOMC Laughably On Hold; Gold, Silver Take Off
Market conditions are becoming strained, as evidenced by the flatness of the past two sessions, each directly related to the two-day FOMC meeting concluded this afternoon.
As expected, the FOMC did nothing, save for bloviating on about macro economic conditions, hinting that they would be on track to raise interest rates to more "normal" levels at some point in the future, depending on the data they receive.
What the Fed, via their rate-setting governors at the FOMC is effectively saying is nothing, but if one watches markets closely enough and listens carefully, here's the real message:
The Fed is not going to raise interest rates to anything even approaching normal - that is, possibly a federal funds rate (overnight) of 2 1/2 to 3 percent, a prime rate of 6 percent and a deposit rate of savings accounts of 4 to 6 percent - at any time in the next four to seven years, unless things get really out of hand, like you worthless peasants and debt slaves rise up and actually elect that uncouth slob, Donald Trump, as president, continue to grow cryto markets like bitcoin and Steem, take your money out of banks and stat paying down debt, paying for things in cash, or, heaven forbid, barter amongst yourselves.
They get it at the Fed. All they're interested in is maintaining the status quo, meaning, you go to work for feeble wages, while they and their cronies sit on their fat rumps and collect huge checks for appearing to be in control of the economic situation.
They're not in control unless the people allow them to be. Once the people lose faith - confidence - in the fiat money system, they're toast.
Another few signs that the wheels have come off the global debt Ponzi scheme were the gains in gold and silver on the day, in two separate ramps, first, at the market open (9:30 am EDT) and at the rate policy announcement (2:00 pm EDT). Silver and gold reached levels last seen during the Brexit bounce, with Gold hitting $1340.00 the ounce and silver on fire to nearly $20.40, gaining more than 80 cents on the day.
The financial, political and social fabric are becoming increasingly intertwined and fraying at the same time. Along with grabbing up sole gold, silver, lead, brass, and bottled water, canned goods are also a cheap option for securing one's future, and also quite edible, something that can't be said of nearly any other asset class.
The Wednesday Effect:
Dow Jones Industrial Average
18,472.17, -1.58 (-0.01%)
NASDAQ
5,139.81, +29.76 (0.58%)
S&P 500
2,166.58, -2.60 (-0.12%)
NYSE Composite
10,739.58, -33.41 (-0.31%)
As expected, the FOMC did nothing, save for bloviating on about macro economic conditions, hinting that they would be on track to raise interest rates to more "normal" levels at some point in the future, depending on the data they receive.
What the Fed, via their rate-setting governors at the FOMC is effectively saying is nothing, but if one watches markets closely enough and listens carefully, here's the real message:
The Fed is not going to raise interest rates to anything even approaching normal - that is, possibly a federal funds rate (overnight) of 2 1/2 to 3 percent, a prime rate of 6 percent and a deposit rate of savings accounts of 4 to 6 percent - at any time in the next four to seven years, unless things get really out of hand, like you worthless peasants and debt slaves rise up and actually elect that uncouth slob, Donald Trump, as president, continue to grow cryto markets like bitcoin and Steem, take your money out of banks and stat paying down debt, paying for things in cash, or, heaven forbid, barter amongst yourselves.
They get it at the Fed. All they're interested in is maintaining the status quo, meaning, you go to work for feeble wages, while they and their cronies sit on their fat rumps and collect huge checks for appearing to be in control of the economic situation.
They're not in control unless the people allow them to be. Once the people lose faith - confidence - in the fiat money system, they're toast.
Another few signs that the wheels have come off the global debt Ponzi scheme were the gains in gold and silver on the day, in two separate ramps, first, at the market open (9:30 am EDT) and at the rate policy announcement (2:00 pm EDT). Silver and gold reached levels last seen during the Brexit bounce, with Gold hitting $1340.00 the ounce and silver on fire to nearly $20.40, gaining more than 80 cents on the day.
The financial, political and social fabric are becoming increasingly intertwined and fraying at the same time. Along with grabbing up sole gold, silver, lead, brass, and bottled water, canned goods are also a cheap option for securing one's future, and also quite edible, something that can't be said of nearly any other asset class.
The Wednesday Effect:
Dow Jones Industrial Average
18,472.17, -1.58 (-0.01%)
NASDAQ
5,139.81, +29.76 (0.58%)
S&P 500
2,166.58, -2.60 (-0.12%)
NYSE Composite
10,739.58, -33.41 (-0.31%)
Wednesday, November 27, 2013
Stocks Post More Gains Prior to Thanksgiving Holiday
The S&P and Dow set new all-time closing marks on Wednesday and the NASDAQ is approaching levels not seen since the dotcom boom (and bust), but, according to just about anyone who appears on CNBC or Bloomberg, there is no bubble in equities.
And, the Fed buying up $85 billion in bonds every month is normal. Gold stuck around $1250 is normal.
The p/e of Facebook (FB) is 77. Nope, no bubble there. Carry on.
Happy Thanksgiving.
The markets are open until 1:00 pm ET on Black Friday, which is usually a big ramp-up day on low volume, so sharpen up your day-trading skills and make some easy moolah while everyone else is out shopping.
Better get bitcoin. If you don't know what bitcoin is, you'd be doing yourself a favor to find out.
DOW 16,097.33, +24.53 (+0.15%)
NASDAQ 4,044.75, +27.00 (+0.67%)
S&P 1,807.23, +4.48 (+0.25%)
10-Yr Note 99.90, -0.20 (-0.20%)
NASDAQ Volume 1.33 Bil
NYSE Volume 2.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3691-1937
Combined NYSE & NASDAQ New highs - New lows: 469-55
WTI crude oil: 92.30, -1.38
Gold: 1,237.80, -3.60
Silver: 19.63, -0.215
Corn: 426.50, 1.75
And, the Fed buying up $85 billion in bonds every month is normal. Gold stuck around $1250 is normal.
The p/e of Facebook (FB) is 77. Nope, no bubble there. Carry on.
Happy Thanksgiving.
The markets are open until 1:00 pm ET on Black Friday, which is usually a big ramp-up day on low volume, so sharpen up your day-trading skills and make some easy moolah while everyone else is out shopping.
Better get bitcoin. If you don't know what bitcoin is, you'd be doing yourself a favor to find out.
DOW 16,097.33, +24.53 (+0.15%)
NASDAQ 4,044.75, +27.00 (+0.67%)
S&P 1,807.23, +4.48 (+0.25%)
10-Yr Note 99.90, -0.20 (-0.20%)
NASDAQ Volume 1.33 Bil
NYSE Volume 2.36 Bil
Combined NYSE & NASDAQ Advance - Decline: 3691-1937
Combined NYSE & NASDAQ New highs - New lows: 469-55
WTI crude oil: 92.30, -1.38
Gold: 1,237.80, -3.60
Silver: 19.63, -0.215
Corn: 426.50, 1.75
Tuesday, November 26, 2013
Why There's No Inflation and No Growth... (and why that's good for some)
Stocks were up modestly on Tuesday, as is the usual practice during the week of Black Friday Thanksgiving. There's a general feeling of well-being about, and, even though the gains this year have been the best since something like 1997, buyers of stocks know how to do nothing else, so they keep on buying. Actually, the turn-about in the inal half hour erased most of the day's gains on the Dow and S&P, especially. The NASDAQ finished above 4000, for the first time since 2000, when it crossed that threshold from the other side.
Stocks, bought with ridiculously cheap money via the Fed, are, and have been, producing fatastic returns for many investors and holders of pensions, 401ks, IRAs, etc., but the nagging suspicion that it can't really be this easy continues to gnaw at the fringes of consciousness.
For now, it really is this easy. There's no compelling reason to do anything but buy more stocks, not sell and keep watching them go higher. It's a very powerful positive feedback loop. The Fed's continuous debt-purchasing and zero-bound interest rates fuel the stock market, have contributed greatly to the rebound in real estate prices, but, stubbornly, unemployment simply won't go down appreciably, and that's an issue, though most of the barons of the financial world can't, or don't, really care about the ordinary citizens struggling to eke out a living.
Also troubling is the idea that all this debt-binge-buying by the Fed hasn't produced inflation, which, according to all Keynesian estimates on the topic, should be raging by now.
But, something un-funny happened on Ben Bernanke's way to the printing press. While the Federal Reserve and the behemoth banks have been busy leveraging up, the average American (and European) has been leveraging down, using the limited free money that comes their way to pay down debt, stop spending frivolously and horror of horrors, save.
Official statistics will deny that Americans are saving anything at all. Many, for certain, are not. In fact, HELOC loans are once again on the rise. But others, quietly, off-the-radar, have been squirreling away small amounts, mostly in cash, though some in gold, silver, bulk foods, and saving in other ways like repairing an aging vehicle instead of buying a new one, shopping at discount stores, buying online, bartering and other creative ways that are having an unseen impact because they are individually so small as to be unnoticeable, but collectively, they become huge.
Imagine, for a minute, the impact of 10,000 people individually not buying one Starbucks coffee per week. On the individual basis, it's three or four dollars. Collectively, however, it's $30-40,000. Then start adding up the other ways people are saving. Driving less or coordinating their driving to do many tasks on one trip. A couple of dollars a week. Home gardens that can shave $10 to $40 off a family's food bill in season is another hidden savings the statisticians can't capture with their computers. There are many, many more practical methods people are using today to save on everything from food to fuel to... well, you name it. Cut your own hair, heat with firewood partially, buy clothes at thrift stores, eat out less (or not at all), don't go to movies, and on and on and on.
The Fed doesn't get it. Wall Street doesn't get it. Most public employees don't get it. They're conditioned to be like their co-workers. Buy a new car, or lease one. Eat out for lunch. See the latest movies. Buy new clothes. They, and the 47 million on food stamps, are keeping the economy just clinging to life. But, despite the added liquidity by the Fed, it's not working so well. Corporations aren't beating their revenue figures. Bottom lines are good, but much of it is due to shrinking the number of shares outstanding via stock repurchase programs, which also add to the stock market boom.
But, there's a horde of people out there who are getting out of the system, cutting their cable bills, credit cards, magazine subscriptions, and, soon, because of the nightmare that is ObamaCare, their monthly health insurance bill.
Some, like economists at the Fed or analysts on Wall Street, might call these types an underclass. In reality, they are the new freedom class, untying the knot of debt, freeing their minds from the day-to-day toil and keeping up with the Joneses mentality that feeds the corporate machine.
The signs of frugality and savings - despite the overblown hype of Black Friday being bellowed by the big merchants - are everywhere. Gold, silver, bitcoin, eBay, Craigslist, barter exchanges, healthy, home-grown foods instead of corporate fast-food mulch, economy cars, hybrids and public transportation are all taking the bluster out of the Wall Street boom.
When the dust settles, when the Fed stops printing to infinity and the economy begins to normalize, there's an old adage used by printers, manufacturers and writers of software that will be apropos: "Garbage In, Garbage Out."
The garbage in is the cheap money the Fed has been printing nilly-willy. The garbage out will be a steady, possibly spectacular, stock market decline. It may not be a crash, happening all of a sudden, but there will be a bear market, eventually. After all, this bull run began in March 2009. It's now a 57-month old bull, which, by most measures, is a little long in the tooth. The signs are everywhere. Corporate profits are of exceedingly poor quality (garbage out).
When this era of cheap money comes to an end - and end it will - many who made money all along will be left holding stocks worth much less than what they paid for them. Many of the companies represented by these stocks will have upside-down balance sheets because of all the stock they bought back at nose-bleed prices. And that's going to be a real problem, causing more layoffs, consolidations, and bankruptcies (yes, we still have them). JC Penny will be the first to go. They're overdue and probably will file within months after the holiday season, which, for them, will be a disaster. They will be followed by Sears, and then after the retailers get moving in the wrong direction, the filings will snowball.
Garbage in, garbage out. Those who've been saving, rejecting the debt-slave system and prepping will be much less affected, already living well within their means and enjoying it.
Happy Thanksgiving!
DOW 16,072.80, +0.26 (+0.00%)
NASDAQ 4,017.75, +23.18 (+0.58%)
S&P 1,802.75, +0.27 (+0.02%)
10-Yr Note 100.36, +0.31 (+0.31%)
NASDAQ Volume 1.79 Bil
NYSE Volume 3.40 Bil
Combined NYSE & NASDAQ Advance - Decline: 3292-2338
Combined NYSE & NASDAQ New highs - New lows: 431-93
WTI crude oil: 93.68, -0.41
Gold: 1,241.40, +0.20
Silver: 19.85, -0.034
Corn: 424.75, -6.50
Stocks, bought with ridiculously cheap money via the Fed, are, and have been, producing fatastic returns for many investors and holders of pensions, 401ks, IRAs, etc., but the nagging suspicion that it can't really be this easy continues to gnaw at the fringes of consciousness.
For now, it really is this easy. There's no compelling reason to do anything but buy more stocks, not sell and keep watching them go higher. It's a very powerful positive feedback loop. The Fed's continuous debt-purchasing and zero-bound interest rates fuel the stock market, have contributed greatly to the rebound in real estate prices, but, stubbornly, unemployment simply won't go down appreciably, and that's an issue, though most of the barons of the financial world can't, or don't, really care about the ordinary citizens struggling to eke out a living.
Also troubling is the idea that all this debt-binge-buying by the Fed hasn't produced inflation, which, according to all Keynesian estimates on the topic, should be raging by now.
But, something un-funny happened on Ben Bernanke's way to the printing press. While the Federal Reserve and the behemoth banks have been busy leveraging up, the average American (and European) has been leveraging down, using the limited free money that comes their way to pay down debt, stop spending frivolously and horror of horrors, save.
Official statistics will deny that Americans are saving anything at all. Many, for certain, are not. In fact, HELOC loans are once again on the rise. But others, quietly, off-the-radar, have been squirreling away small amounts, mostly in cash, though some in gold, silver, bulk foods, and saving in other ways like repairing an aging vehicle instead of buying a new one, shopping at discount stores, buying online, bartering and other creative ways that are having an unseen impact because they are individually so small as to be unnoticeable, but collectively, they become huge.
Imagine, for a minute, the impact of 10,000 people individually not buying one Starbucks coffee per week. On the individual basis, it's three or four dollars. Collectively, however, it's $30-40,000. Then start adding up the other ways people are saving. Driving less or coordinating their driving to do many tasks on one trip. A couple of dollars a week. Home gardens that can shave $10 to $40 off a family's food bill in season is another hidden savings the statisticians can't capture with their computers. There are many, many more practical methods people are using today to save on everything from food to fuel to... well, you name it. Cut your own hair, heat with firewood partially, buy clothes at thrift stores, eat out less (or not at all), don't go to movies, and on and on and on.
The Fed doesn't get it. Wall Street doesn't get it. Most public employees don't get it. They're conditioned to be like their co-workers. Buy a new car, or lease one. Eat out for lunch. See the latest movies. Buy new clothes. They, and the 47 million on food stamps, are keeping the economy just clinging to life. But, despite the added liquidity by the Fed, it's not working so well. Corporations aren't beating their revenue figures. Bottom lines are good, but much of it is due to shrinking the number of shares outstanding via stock repurchase programs, which also add to the stock market boom.
But, there's a horde of people out there who are getting out of the system, cutting their cable bills, credit cards, magazine subscriptions, and, soon, because of the nightmare that is ObamaCare, their monthly health insurance bill.
Some, like economists at the Fed or analysts on Wall Street, might call these types an underclass. In reality, they are the new freedom class, untying the knot of debt, freeing their minds from the day-to-day toil and keeping up with the Joneses mentality that feeds the corporate machine.
The signs of frugality and savings - despite the overblown hype of Black Friday being bellowed by the big merchants - are everywhere. Gold, silver, bitcoin, eBay, Craigslist, barter exchanges, healthy, home-grown foods instead of corporate fast-food mulch, economy cars, hybrids and public transportation are all taking the bluster out of the Wall Street boom.
When the dust settles, when the Fed stops printing to infinity and the economy begins to normalize, there's an old adage used by printers, manufacturers and writers of software that will be apropos: "Garbage In, Garbage Out."
The garbage in is the cheap money the Fed has been printing nilly-willy. The garbage out will be a steady, possibly spectacular, stock market decline. It may not be a crash, happening all of a sudden, but there will be a bear market, eventually. After all, this bull run began in March 2009. It's now a 57-month old bull, which, by most measures, is a little long in the tooth. The signs are everywhere. Corporate profits are of exceedingly poor quality (garbage out).
When this era of cheap money comes to an end - and end it will - many who made money all along will be left holding stocks worth much less than what they paid for them. Many of the companies represented by these stocks will have upside-down balance sheets because of all the stock they bought back at nose-bleed prices. And that's going to be a real problem, causing more layoffs, consolidations, and bankruptcies (yes, we still have them). JC Penny will be the first to go. They're overdue and probably will file within months after the holiday season, which, for them, will be a disaster. They will be followed by Sears, and then after the retailers get moving in the wrong direction, the filings will snowball.
Garbage in, garbage out. Those who've been saving, rejecting the debt-slave system and prepping will be much less affected, already living well within their means and enjoying it.
Happy Thanksgiving!
DOW 16,072.80, +0.26 (+0.00%)
NASDAQ 4,017.75, +23.18 (+0.58%)
S&P 1,802.75, +0.27 (+0.02%)
10-Yr Note 100.36, +0.31 (+0.31%)
NASDAQ Volume 1.79 Bil
NYSE Volume 3.40 Bil
Combined NYSE & NASDAQ Advance - Decline: 3292-2338
Combined NYSE & NASDAQ New highs - New lows: 431-93
WTI crude oil: 93.68, -0.41
Gold: 1,241.40, +0.20
Silver: 19.85, -0.034
Corn: 424.75, -6.50
Tuesday, April 9, 2013
Dow Posts Record Close, Despite Market Fail in Final Hour
Well, it took a whole week, but the Dow Jones Industrials made another all-time closing high today.
The S&P was not so lucky, but, was poised for a record close until... get this.. actual selling took place in the final hour of trading, a huge departure from the general, repeating pattern of the past few days, weeks, months, years.
The Dow was up 106 points as the three o'clock witching hour approached, but went in the opposite direction of usual expectations, losing 46 points in the final hour. Likewise, the S&P failed to extend the day-long rally into the close, losing close to half of its gains in the final hour.
Odd, that's not supposed to happen with the Fed relentlessly pumping money into the system, unless... unless... somebody is gaming it. Just who those these gamers are is a matter of general speculation - as are the markets - but there's a very good chance it was the same people who were buying the same stocks in the morning that they were selling in the afternoon.
It's high-stakes day-trading at its very finest.
For the rest of us, especially those invested in gold, silver and other tangible assets, not such game-playing occurs (at least not superficially) if those assets are held closely, as in, buried in your back yard or in a wall safe.
Precious metals saw a significant boost today as the shorts were cleared out in the ponzi-style, ETF funds. It's only a matter of time before the PMs will continue their super-cycle bull run, and, the investors in metals are more than happy to wait, or buy, at what presently are bargain-basement prices, even with today's solid gains factored in.
Take your pick: tangible goods, paper or... bitcoin, a currency that is a threat to the paper, but is currently trading at levels unforeseen. The electronic currency is still in its infancy, but it's making a lot of noise of late, soaring to over $200 today. It's highly misunderstood how bitcoin works. There's maybe .001% of the world's population who really comprehend it, and, at this juncture, that's not enough to inspire confidence. It's day may come, and that day may be sooner rather than later.
The question is how seriously central bankers take it as a threat - as they do silver and gold - and what they're willing to do to defeat it.
In the meantime, President Obama releases his budget (if one can call it such) tomorrow. That ought to be worth a few laughs and plenty of blustering commentary from the do-nothings on Capitol Hill.
Dow 14,673.46, +59.98 (0.41%)
NASDAQ 3,237.86, +15.61 (0.48%)
S&P 500 1,568.61, +5.54 (0.35%)
NYSE Composite 9,086.81, +35.22 (0.39%)
NASDAQ Volume 1,466,549,375
NYSE Volume 3,296,691,750
Combined NYSE & NASDAQ Advance - Decline: 3554-2886 (thin)
Combined NYSE & NASDAQ New highs - New lows: 301-31
WTI crude oil: 94.20, +0.84
Gold: 1,586.70, +14.20
Silver: 27.88, +0.743
The S&P was not so lucky, but, was poised for a record close until... get this.. actual selling took place in the final hour of trading, a huge departure from the general, repeating pattern of the past few days, weeks, months, years.
The Dow was up 106 points as the three o'clock witching hour approached, but went in the opposite direction of usual expectations, losing 46 points in the final hour. Likewise, the S&P failed to extend the day-long rally into the close, losing close to half of its gains in the final hour.
Odd, that's not supposed to happen with the Fed relentlessly pumping money into the system, unless... unless... somebody is gaming it. Just who those these gamers are is a matter of general speculation - as are the markets - but there's a very good chance it was the same people who were buying the same stocks in the morning that they were selling in the afternoon.
It's high-stakes day-trading at its very finest.
For the rest of us, especially those invested in gold, silver and other tangible assets, not such game-playing occurs (at least not superficially) if those assets are held closely, as in, buried in your back yard or in a wall safe.
Precious metals saw a significant boost today as the shorts were cleared out in the ponzi-style, ETF funds. It's only a matter of time before the PMs will continue their super-cycle bull run, and, the investors in metals are more than happy to wait, or buy, at what presently are bargain-basement prices, even with today's solid gains factored in.
Take your pick: tangible goods, paper or... bitcoin, a currency that is a threat to the paper, but is currently trading at levels unforeseen. The electronic currency is still in its infancy, but it's making a lot of noise of late, soaring to over $200 today. It's highly misunderstood how bitcoin works. There's maybe .001% of the world's population who really comprehend it, and, at this juncture, that's not enough to inspire confidence. It's day may come, and that day may be sooner rather than later.
The question is how seriously central bankers take it as a threat - as they do silver and gold - and what they're willing to do to defeat it.
In the meantime, President Obama releases his budget (if one can call it such) tomorrow. That ought to be worth a few laughs and plenty of blustering commentary from the do-nothings on Capitol Hill.
Dow 14,673.46, +59.98 (0.41%)
NASDAQ 3,237.86, +15.61 (0.48%)
S&P 500 1,568.61, +5.54 (0.35%)
NYSE Composite 9,086.81, +35.22 (0.39%)
NASDAQ Volume 1,466,549,375
NYSE Volume 3,296,691,750
Combined NYSE & NASDAQ Advance - Decline: 3554-2886 (thin)
Combined NYSE & NASDAQ New highs - New lows: 301-31
WTI crude oil: 94.20, +0.84
Gold: 1,586.70, +14.20
Silver: 27.88, +0.743
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