JP Morgan and the Federal Reserve "Not QE" Money Spigot

Monday, Monday, can't trust that day...

So said the Mamas and Papas back in the 60s. We can still hear the echoes of their lament on the highways to work, in the coffee drive-throughs, and back seats of car pools (some people still do this).

Papers scattered over desks, it's time to get down to business, earn the paycheck, do whatever it is you do to keep yourself afloat.

Monday mornings are a grind, unless, that is, you happen to be a big bank, a global systemically important bank, otherwise known around financial circles as a G-SIB. Then, Monday is just another day to goose your bottom line. And this Monday was a good one.

Thanks to algo-spiking headlines suggesting - for about the 20th time in the past six months - that a China-US trade deal was on the way to becoming reality, stocks roared out of the gate at the opening bell, sending the Dow, S&P, and NASDAQ to all-time closing highs. All-time highs are all well and good, mind you, except when they're built on the back of a drama that never ends, like the ongoing US-China trade deal.

Since the US and China have been engaged in this delicate dance markets have soared every time a possible breakthrough is mentioned and fallen whenever snags are discovered. It's what happens when computers run markets instead of people, even though the computer algorithms were programmed, supposedly, by humans (ahem).

More interesting, however, is the lack of news surrounding the ongoing implosion in repo markets that began in late September and continued through October, now extending into November. It's a real crisis, but now it appears that all of this was triggered by the good people at JP Morgan, yes, that G-SIB bank at the top of the list in the up-article link.

According to the usual somewhat reliable folks at Zero Hedge, JPM was going about its work to keep the economy humming along by selling loans and buying long-dated bonds, according to rules laid out by none other than the Federal Reserve.

How tidy, for Morgan and CEO, Jamie Dimon, to have the incredible good fortune to be able to make more money selling loans than making them (not making this up; it's what happens when interest rates are too low). But, because of JPM's massive portfolio, it cause a not-insignificant disruption in the overnight lending market (repo), that prompted the Fed - hearing the wailing of cash-poor clients - to offer up some emergency TOMO (Temporary Open Market Operations) overnight auctions and eventually cede to POMO (Permanent) and "not QE," to quiet the troubled sector at the heart of the global economy.

So far, it seems to be working, though the general public doesn't even notice, probably because of the fabulous Dodd-Frank legislation that allows the Fed to do essentially bailouts on an ongoing basis without having to go to congress, as was the case in 2008 with TARP.

Jimmy Dore, with help from Dylan Ratigan explain in the 12-minute video below (worth the watch):



John Pepin chines in with pithy commentary from his incapp.org blog:

If the demand for debt exceeds the banks ability to loan then one of several things must happen. Either the interest rate rises, (and we all know that is unacceptable), or the banks have to take hidden loans from the federal Reserve to cover that demand for debt.

Monday, Monday, can't trust that day. Worry not, the week is just getting started.

At the Close, Monday, November 4, 2019:
Dow Jones Industrial Average: 27,462.11, +114.75 (+0.42%)
NASDAQ: 8,433.20, +46.80 (+0.56%)
S&P 500: 3,078.27, +11.36 (+0.37%)
NYSE Composite: 13,355.44, +55.14 (+0.41%)

Weekend Wrap: Cash Crunch Easing, Though Culprits Remain Anonymous

Ending a streak of three consecutive weekly gains, all major US indices took an about-face when Friday's quad-witching day sent stocks South.

Losses were not large, though they were widespread, as fear of a looming recession and confusion over the Fed's four straight days of repo auctions took away market enthusiasm.

Make that five straight days, as the Fed held another $75 billion repo auction on Monday, prior to the opening of equity markets in the US. Signs that the cash crunch was easing, only $66.75 billion was accepted as collateral by the Fed, making the auction officially undersubscribed.

On Friday, the Fed had also announced that it would conduct overnight repo auctions every day until October 10, and additionally would provide three 14-day term repo operations for an aggregate amount of at least $30 billion each, Tuesday, Thursday, and Friday of this week.

While nobody is certain which banks - or single institution - is having a hard time balancing its nightly books, any sense of panic has been effectively blunted by the Fed's actions.

As markets open the final week of trading for the third quarter, it will be instructive to note how markets respond, especially on Thursday and Friday. With the close of the quarter, some firms traditionally buy stocks in favor, as so called "window dressing," though it appears that this quarter might have a wholly different tone, given the stress in the system.

In what could be a most important week for markets, any words from Fed speakers should also be quantified in relation to ongoing cash shortages and the global condition.

At the Close, Friday, September 20, 2019:
Dow Jones Industrial Average: 26,935.07, -159.73 (-0.59%)
NASDAQ: 8,117.67, -65.21 (-0.80%)
S&P 500: 2,992.07, -14.72 (-0.49%)
NYSE Composite: 13,093.80, -17.50 (-0.13%)

For the Week:
Dow: -284.45 (-1.05%)
NASDAQ: -59.04 (-0.72%)
S&P 500: -15.32 (-0.51%)
NYSE Composite: -30.54 (-0.23%)

Despite Deep State and Media Trump Hatred, US Economy Continues Expansion

Stocks made steady advances through the week and were especially profitable on Friday, as the NASDAQ and S&P 500 reached all-time closing highs.

The week also marked an historic moment on Wednesday, when the current S&P 500 became the longest bull market in US history, though the celebration was largely muted and overshadowed by fake news concerning President Trump.

While Washington and the mainstream media remains focused on unseating a duly-elected president, Wall Street is making hay while the sun shines, living large in the light under Trump's easy fiscal and tough trade policies which have put more money in the pockets of American workers, upset the global status quo, and spurred a delightful rally since he won the presidency in November, 2016.

Many deep state politicians and the loathsome mainstream media seem to be on another planet when it comes to politics and the economy. While middle America is flourishing after years of mismanagement under presidents Bush and Obama, they look the other way when it comes to Trump, refusing to acknowledge his various successes, instead plowing ahead with false narratives that run the gamut from colluding with Russia during the 2016 campaign to steamy affairs with a porn star and a Playboy playmate.

Politicians on the left and even many so-called RHINO Republicans seem content to spend most of their time fomenting fear and hatred. At the same time, Wall Street remains unimpressed and without concern over the political hijinks and wasted efforts to impeach or impair the Trump presidency.

It's a sad state of affairs when the dominant media can only produce stories that are shakily superficial and barely believable. If anything unsettles markets, it would likely come from the swamp creatures in DC and the media, though as of yet, investors and the general US population aren't buying it.

Approaching the final week of unofficial summer, markets are robust but heavily overvalued. Profits since the last recession and the 2008-09 financial crisis have been all too easy. Market veterans know just how quickly good times can turn bad, although since the downturn in February and March there's been little thought or discussion about booking profits, moving to cash positions, or consolidating gains in any concerted fashion.

Bonds have been stable, precious metals have gone into a long, deep reversion, and inflation is not overwhelming. Outside of high valuations and the constant attacks on President Trump, the US economy appears as healthy as it has been in the past 20 years.

Dow Jones Industrial Average August Scorecard:

Date	Close	Gain/Loss	Cum. G/L
8/1/18	25,333.82	-81.37	-81.37
8/2/18	25,326.16	-7.66	-89.03
8/3/18	25,462.58	+136.42	+55.05
8/6/18	25,502.18	+39.60	+94.65
8/7/18	25,628.91	+126.73	+221.38
8/8/18	25,583.75	-45.16	+176.22
8/9/18	25,509.23	-74.52	+101.70
8/10/18	25,313.14	-196.09	-94.39
8/13/18	25,187.70	-125.44	-219.83
8/14/18	25,299.92	+112.22	-107.61
8/15/18	25,162.41	-137.51	-245.12
8/16/18	25,558.73	+396.32	+151.20
8/17/18	25,669.32	+110.59	+261.79
8/20/18	25,758.69	+89.37	+351.16
8/21/18	25,822.29	+63.60	+414.76
8/22/18	25,733.60	-88.69	+326.07
8/23/18	25,656.98	-76.62	+249.45
8/24/18	25,790.35	+133.37	+382.82

At the Close, Friday, August 24, 2018:
Dow Jones Industrial Average: 25,790.35, +133.37 (+0.52%)
NASDAQ: 7,945.98, +67.52 (+0.86%)
S&P 500: 2,874.69, +17.71 (+0.62%)
NYSE Composite: 12,999.44, +65.98 (+0.51%)

For the Week:
DOW: +121.03 (+0.47%)
NASDAQ: +125.65 (+1.66%)
S&P 500: +24.56 (+0.86%)
NYSE Composite: +91.18 (+0.71%)

WARNING: Congressional Democrats Are Detrimental To The Health Of The Stock Market

Just in case anybody's keeping score, Monday marked the eighth straight day of losses for the Dow Jones Industrial Average. Only the buoyant NASDAQ finished with gains, a sign that there are still plenty of speculative players plying "animal spirits" despite evidence to the contrary, i.e., the VIX spiked above 13, stocks cannot maintain momentum. The eight straight losing sessions is the longest for the Dow since August 2011.

Primary drivers for the recent about face from all-time highs are politicians in Washington, now about to erupt into all-out war between the two parties over everything from the fake "Russians hacked the election" story, to blocking the confirmation of Trump's nominee for the Supreme Court, Neil Gorsuch, to walking back and away from House Intelligence Committee Chairman Devin Nunes (R). Claiming he is unfit for the job, Democrats are calling for him to step down, amid accusations that he met secretly with President Trump over concerns that the incoming president was bugged by outgoing president Barack Obama's administration in November, December and January.

The Kafkaesque nature of recent developments in congress can only help make Wall Street even more jittery than it already is. Democrats have been bolstered by the stumbling attempt by Republicans in the House to overturn Obamacare, as Speak of the House, Paul Ryan, cancelled a vote on the proposed measure, which was hastily prepared and loaded with amendments and proposals that left the bill dead on arrival.

It has become crystal clear that Democrats in congress are still upset of losing the presidential election last November and trying to obstruct and delay any attempts by the current administration to fix what is wrong with the country. The new delaying tactics are designed to extend to the next recess, on April 7, at which point the Democrats can return to their districts and/or devise new tactics to thwart the smooth operation of government over a two-week span. Congress won't reconvene until the 25th of April once the recess is called.

The obvious battle being waged in Washington is not good for anyone investing in anything (except safe havens: bonds silver, gold), until one side emerges victorious and a path forward can be envisioned. Since there's little to no chance of either side claiming a decisive victory, investors should be aware and prepared for a long period of indecision and therefore, wild swings in markets and individual stocks. Nothing is safe within an environment of stealth, obfuscation, denial, lies, and feigned surprise as exists in the halls of congress leading the political sphere.

A well-defined move of funds to cash, bonds, and precious metals will offer a signal that a bear market is dead ahead, something which should be expected to occur in any case, as the current bull run is overextended and built upon mountains of debt and stock buybacks.

Developments to come - both from Washington and Wall Street - may prove deadly to bullish sentiment and frightening to anyone who still has a memory of what "normal" should look like.

CAVEAT EMPTOR

At The Close 3.27.17:
Dow: 20,550.98, -45.74 (-0.22%)
NASDAQ: 5,840.37, +11.64 (0.20%)
S&P 500: 2,341.59, -2.39 (-0.10%)
NYSE Composite: 11,414.33, -4.56 (-0.04%)

January Was A Dud; February Starts Badly; Markets Due for Breakdown

Call this a "call 'em as we see 'em" post.

Stocks started February without continuation of the "Japan Negative Interest Rates" rally of Friday, falling out at the opening bell and doing little to inspire confidence throughout the session.

The stock market is down and will likely stay down for the remainder of 2016, go lower in 2017 and disintegrate in 2018. That's the optimistic point of view.

There's nothing good in this market. You pick stocks you think have a good business model, reliable earnings, maybe even a dividend, and, then, WHAM! it gets whacked like a mafioso underling who looked the wrong way at the boss.

Take for instance, the case of this stock (ADS), which last week released earnings above consensus, though the top line (revenue) fell a little short. What happened? Nobody is certain, but the stock took a 20% haircut on January 28. There seemed to be no justification for the radical downsizing of the price of Alliance Data Systems, a company heavily involved in online advertising.

That's just a sampling. Things like this happen every day, without warning nor explanation (we looked, and couldn't find a reasonable telling). So, say you had $20,000 tied up in this company. That was Wednesday. As of close of business on Thursday, you have $16,000. There's a couple months off your planned retirement.

Suppose you held it in a 401k or other such pension vehicle. There was absolutely nothing you could do about it, either before or after the fact. You were stuck, like a good sucker at a rigged casino. Thank you for playing. Come again. And individuals do. They come back for more and more punishment. They loved it the past seven years, when stocks went straight up, no matter what. But now, things have changed.

It's still not too late to pull all your money out and invest in silver, gold, cash, and anything else you might need in retirement (canned goods, anyone?).

The US stock markets - and likely, all markets, globally - suck. They suck the life out of investors and then, you get to pay taxes on any gains, and sometimes, on losses. So, suck it up or get out.

Today's closing fake numbers:
S&P 500: 1,939.38, -0.86 (0.04%)
Dow: 16,449.18, -17.12 (0.10%)
NASDAQ: 4,620.37, +6.41 (0.14%)

Crude Oil 31.64 -5.89% Gold 1,128.40 +1.07% EUR/USD 1.0888 +0.53% 10-Yr Bond 1.9660 +1.81% Corn 371.00 -0.27% Copper 2.06 -0.41% Silver 14.35 +0.75% Natural Gas 2.15 -6.48% Russell 2000 1,032.39 -0.29% VIX 19.98 -1.09% BATS 1000 20,713.55 +0.14% GBP/USD 1.4426 +1.35% USD/JPY 120.9405 -0.31%

Dow Ends Absurd Tuesday Streak; Stocks Breaking Down

The Dow Jones Industrials ended a string of 20 consecutive gains on Tuesday, with a blood-red beating on this day. The streak of ending positive for 20 consecutive Tuesdays was probably due - more than anything else - to POMO dates, but the concept is that the market is becoming like fantasy baseball, where stats on every conceivable construct are trotted out, such as a player's propensity to steal a base during a day game with his team ahead after three straight wins against a left-handed pitcher with a non-Latino playing right field.

That comparison may be a touch on the deep side, but the pint is that market statistics are useless in the past unless they offer some meaningful insight into the future and Tuesday gains do not pass the smell test.

There is nothing good about this market. Now would - in some people's opinions - be a good time to go short or go to cash.

Of course, since many readers of this blog are already in cash, that would mean going short is at an optimal point.

If one would like the comfort of shorting an entire index, the S&P is a good bet, for individual stocks, there are many from which to choose, but the most enticing are social media companies with extreme valuations, such as Facebook. Zynga was a disaster waiting to happen, and it did, though its low share price (threes and change) seriously precluded any dowside participation. Yahoo (YHOO) also appears ripe for a substantial revaluation to the downside. Industrials also seem to be at risk, but the market has yet to price in any effects of a global slowdown.

At the bottom of everything is currencies, and they remain the key element in the ongoing destruction of all fiat currency not backed by tangible assets. There is a severe collateral crisis combined with grand theft at the pinnacle of government worldwide, a now-vicious devaluation regime and capital velocity fast approaching zero.

Blackrock and Nuveen funds were prominent among new 52-week lows.

Any kind of growth reported by any government anywhere has to be suspect and viewed with a maximum of skepticism.

Despite cutting lossed roughly in half by the close, there was nothing to like about the overall action in equity markets. What began as a bit of slippage a few weeks ago is quickly turning into a correction, most of which will be predicated upon the numbers released by ADT (tomorrow) and the BLS non-farm payroll report, Friday.

15,000 on the Dow and 1600 on the S&P are major psychological levels which should not be overlooked.

Dow 15,177.54, -76.49 (0.50%)
NASDAQ 3,445.26, -20.11 (0.58%)
S&P 500 1,631.38, -9.04 (0.55%)
NYSE Compos 9,320.08, -37.01 (0.40%)
NASDAQ Volume 1,767,142,375
NYSE Volume 4,025,642,750
Combined NYSE & NASDAQ Advance - Decline: 2263-4193
Combined NYSE & NASDAQ New highs - New lows: 228-145
WTI crude oil: 93.31 -0.14
Gold: 1,397.20, -14.70
Silver: 22.41, -0.312

Fear Trumps Greed for a Day

As has been reported here over the past couple of days especially and for the better part of the past month, US stocks are heading lower.

Today's action was in stark contrast to the dip and rally from Tuesday, as news coming out of Japan just continues to worsen, as most thinking people assumed it would. Without going into the gory details, it appears that the nuclear plant that has been a problem since Friday's earthquake/tsunami is headed toward at least partial meltdown and at worst total meltdown.

Making matters even more horrifying is that there are six reactors at the site. Up until now, only four of the six reactors at the Fukushima Daiichi site have been affected, with all four of them spewing radioactive material at some time or another over the past five days, though it now appears that reactors #5 and #6 are at risk as well.

Information from the site has been sketchy at times, contradictory at others, but confusing and increasingly worse all along. It appears that the Japanese people are in for a long period of pain and suffering, and the implications are likely to be felt worldwide.

On Wall Street, where bulls ignore the obvious and bears hope against the worst, but bet on it, stocks were down in the early going until just before 11:00 am EDT, when news came, via a government official, that the situation at the plant had worsened considerably. That sent stocks into an absolute tailspin, with a full 1% decline within minutes of the news.

A rally was attempted when stocks hit their lows of the day at 2:00 pm, but it sputtered badly and the markets stared grimly at one of the largest one-day losses of the past two years.

Dow 11,613.30, -242.12 (2.04%)
NASDAQ 2,616.82, -50.51 (1.89%)
S&P 500 1,256.88, -24.99 (1.95%)
NYSE Composite 7,929.87, -162.24 (2.00%)

Confirming the carnage suggested by the headline numbers, declining issues battered advancers, 4889-1704. It's amazing it wasn't even more lopsided. Our leading current indicator has finally offered confirmation of a directional trend. New highs on the NASDAQ numbered 31, new lows, 74. On the NYSE, 31 new highs and 38 new lows. That makes five straight days on the NASDAQ that new lows have outnumbered new highs and three out of five on the NYSE.

If anyone's been waiting for indicators to flash red with sirens blaring, today was it. Japan's woes will continue to dominate the news for the foreseeable future and the associated supply chain issues of a globalized economy are beginning to come to light. Shipments of crucial parts are going to be delayed or stopped, trade will suffer and a large chunk of the world's third largest economy is going off-line for a while. Whether that is going to be weeks or months or years is still unknown, but the betting is that disruptions will extend through at least the end of the summer.

Another tell-tale sign that today was a day of capitulation by the bulls in US stocks was told by the off-the-charts volume in today's trading. It was the largest volume day of 2011 and may still be dwarfed by the eventual follow-on decline. One caveat is that the Fed continues its abuse of the US dollar by printing more of them at every opportunity. A decline in US stock markets will only trigger more printing, more inflation and an even more unbalanced global economy, one that was already teetering on the brink of disaster, even before the Japan debacle. However, such an inordinate infusion of capital may cause a snapback rally at any time. If such occurs, it will be easy to spot, as it will be sharp and large. The other characteristic of such an event is that it will have a relatively short duration - an afternoon, a day, a session and part of another, at most.

NASDAQ Volume 2,596,625,000
NYSE Volume 6,569,946,500

Commodities caught some bids, as sellers of equities rushed to less-risky assets. Oil was up 80 cents, to $97.98 as conditions in the Middle East continue to rage on, unsettled. Gold gained $3.30, to $1,396.10, and silver was up 36 cents, to $34.47. The move in precious metals is particularly interesting as it is a break-away from equities. Tuesday, all assets fell in a rush to liquidity. Today, the players were placing bets: for precious metals and other valuable commodities and against stocks and currencies.

Since there is no quick fix to nuclear accidents, especially those being mentioned alongside Chernobyl - the worst ever - don't expect the plant in question in Japan to be repaired for some time, if ever. Officials are only now poring over whether to entomb the reactors with heavy doses of cement or continue containment efforts, which are not working very well at present.

At this point, any intelligent human should take advantage of the short-term decline in the precious metals, but also maintain a large sum of cash, outside of any investments. In a declining, deflationary event, which may be occurring at this very moment, cash will be king. In a complete rout of economy, society and civility, gold and silver will reign supreme. Both situations have great potential at the current time.

Today, the Collapse Began; Cash Reigns Supreme

While the headline numbers for today's trading on the major indices weren't all that startling, but the largely unnoticed event - an indicator which I watch like a hawk and report on daily - occurred today, as the new high - new low metrics completely reversed, with new lows taking the edge over new highs.

Of all the indicators which investment analysts cite in their mountains of research and charts, this simple indicator has proven to be the absolute best and most accurate for determining both bull and bear market direction, long term, and isn't long term what investing is supposed to be about, anyway?

The first time I made note of this simple indicator was when it turned negative in August, 2007, an innocuous time for many, but the actual beginning of the still-ongoing financial crisis. New lows took the edge from the new highs in that month and did not give up the advantage - on a day-by-day basis - until April of 2009, a span of some 20 months, a spectacular indicator, to be sure!

There were a handful of days in which there were more posted new highs than new lows, but through those 20 months, new lows led new highs nearly every trading day. When they turned over last year, with new highs surpassing new lows on a daily basis, I was slow to comprehend its meaning and power, but finally caught on in June as the markets embarked upon a truly breathtaking nine-month rally.

Today marked the second time new lows have surpassed new highs in the past two weeks. The first instance was on the day of the "flash crash" on May 6, nearly two weeks ago. Today, the move was decisive, with 167 new lows compared to only 90 new highs. It would bear to watch this indicator closely for the next ten trading sessions, to see if it continues to trend in this manner, but my gut feeling is that it has flipped and the market is heading for a renewed bout of bearishness, marked by sharp selling and equally sharp rallies off fresh bottoms.

Investors would be well advised to get out of equities as soon as possible, if not already in cash, equivalents or tools of trades as I have been suggesting for some time.

Dow 10,444.37, -66.58 (0.63%)
NASDAQ 2,298.37, -18.89 (0.82%)
S&P 500 1,115.05, -5.75 (0.51%)
NYSE Composite 6,927.21, -32.00 (0.46%)

Losing issues outstripped advancers by a colossal margin, 5030-1549, or better than 3:1, another indication of more pain to come for Bulls. Volume was also strong, indicating that the selling has not yet reached fever pitch.

NYSE Volume 7,827,840,000.00
NASDAQ Volume 2,588,426,750.00

Crude slipped to a seven-month low today before regaining its footing, adding 46 cents, to $69.87 per barrel at the close, though that gain was likely a knee-jerk reaction to the relentless selling the entire month of May which has brought the price down more than 15%.

If there was any indication of deflation, it was not only in the April CPI numbers released prior to the market's opening, which showed a decline of 0.1% (same as yesterday's PPI), but in the price of gold, which sold off considerably. The yellow metal plummeted $21.70, to $1,192.60. Silver suffered an even larger percentage loss, diving 76 cents, to $18.09.

As are all other commodities, they are trading vehicles, and while they may fare better than other asset classes, they are still not immune from the ravishes of deflation, which has been and continues to bombard global markets with price dislocations and a general lack of pricing power.

The race to the bottom is on again. Cash is king once more!

Despite Solid GDP, Stocks Slide Again

As goes January, so goes the year...

If that old adage - the basis for the January Barometer, correct 90% of the time - rings true in 2010, we're in for a very tough year in the stock market, so, like I've been repeating over and over, CASH will be king, CASH is king, and CASH almost always has been and will be king. Even the perceived safety of commodities is no safe haven. We've seen them behave in volatile manners, and, for the past two weeks, steadily decline in price. Gold, silver, oil, all returned lower this week.

As for stocks, nothing, it seems, can break them out of their current funk, not even the robust 4th quarter 2009 GDP numbers released this morning. The advance reading came in at +5.7%, about in the middle of expectations, but, transposed against the horrible figures of 2008, it really didn't help investors' confidence very much. Following a spirited morning rally, stocks soon went back to their favorite posture of late, and sold off into the close.

The Dow dropped another 100 points for the week, with the other averages following suit. For the month, stocks were losers. Though they began with steady gains, economic realities and price pressure took over in the final two weeks of the month.

Dow 10,079.80, -40.66 (0.40%)
NASDAQ 2,149.15, -29.85 (1.37%)
S&P 500 1,075.16, -9.37 (0.86%)
NYSE Composite 6,890.53, -66.46 (0.96%)

Declining issues overwhelmed advancers once again, 4465-2021, with new highs and new lows continuing to converge. The highs held sway, but barely, 120-80. The market, and the high-low indicator, continue to appear ready to roll over. Volume was moderate.

NYSE Volume 5,431,270,500
NASDAQ Volume 2,685,607,500

Deflating prices continue to show up in the commodity markets. Oil finally sold off substantially, down $1.00, to $72.89, it's lowest price in over a month. Last year at this time, oil was trading for less than $60, and, considering the economic climate pervading the globe, there's no good reason other than naked speculation for crude to be at these elevated levels.

Gold drifted down $1.60, to $1,083.20, though silver finally managed a gain of 6 cents, to finish the week at $16.27. Less than two weeks ago, silver appeared headed for $19.00. Some people surely were burned badly by over-estimating the appeal of both gold and silver.

US dollars continued their 6-week rebound, strengthening against a basket of currencies, but mostly solid against the Yen, Pound and Euro. Cash, cash, cash. You've either got it or you don't.

Dude, Where's My Money?

Stock investors suddenly found themselves in head-scratching mode once again, as the stock market finished up with a fickle Friday, sending the Dow down another 216 points, with other major indices in line with those losses. It was the worst overall week since the first week of March 2009, when the stock market was bottoming out.

So, is this the beginning of the "double-dip" that skeptics of the recovery have been warning about since June?

Count on it, and here's why: First, stocks had risen by an unprecedented amount - more then 50% in the major indices - over the past nine months, making stocks pricey, even in the best of times. Second, the government's threats to stamp further regulations on the banks has spread fear far and wide. Third, the re-confirmation of Ben Bernanke as Fed Chairman is less than two weeks away and there's growing concern that he will not have the votes due almost entirely to politics. Fourth, Unemployment is still extremely high and government stimulus hasn't done a thing to create new jobs, nor have the publicly-traded corporations.

There are a multitude of reasons to sell stocks, and you can bet your bottom dollar that the big money has already jumped the shark. And, by the way, I'm betting that bottom dollar, down there in your pocket, is looking pretty good right about now.

Dow 10,172.98, -216.90 (2.09%)
NASDAQ 2,205.29, -60.41 (2.67%)
S&P 500 1,091.76, -24.72 (2.21%)
NYSE Composite 7,030.61, -143.85 (2.01%)

Declining issues led advancers, 5116-1480. There were 160 new highs, the lowest number in months, and 67 new lows. Volume was strong for the second straight day, a sure sign that money in stocks is running scared. A bear is loose and is not likely to be sated until stocks drop another 8-10%, short term.

NYSE Volume 7,244,262,000
NASDAQ Volume 2,838,065,000

Commodities were also not spared. Oil was down again, for the fifth straight day, losing $1.54, to $74.54. Gold fell $11.80, to $1,092.00. Silver, which earlier this week was approaching 15-month highs, was down another 58 cents, to $16.94, a drop of more than 10% from the earlier-in-the-week highs.

If you were holding cash, cash and only cash, you had a banner week in relation to everyone else. If you were putting that cash to work in your own business, you're now taking victory laps. Money in your pocket can turn into more money in your pocket through smart purchases, small investments in your own business and strategic use.

Keep it up.

For those suckers in stocks, today was a good day. all of the major indices posted gains, with the Dow jones Industrials close to 52-week highs.

Gold and silver were also higher, but, if you had money in your pocket, your investment was safe and not exposed to any risk except that of somebody robbing you.

You must learn to love cash. It has no equal as far as liquidity is concerned, it takes up very little space, and can buy more things, especially things by which you can make more cash. It's tax-free once in your possession and nobody has to know how much or how little you have of it. With a little, you can buy a decent meal. With a lot, the world's your oyster.

Every minute of every waking day should be an effort to raise more cash. Even as I write this, tiny increments of cash are headed my way, in a never-ending flow (well, as long as the advertising market remains intact). I have various web sites and blogs which generate cash all day and all night. Over the past 5 years, it's been the most remarkable, reliable source of cash I have found. The best part of it is that I incrementally improve my earnings with more traffic. More eyeballs = more page views = more $$ for me and my partners.

If you don't have a stream of income like mine, you're going to be left to find other ways to make money, probably a job, the most degrading, insecure, life-cheating device ever invented. The job has enslaved millions and millions of people who could be otherwise leading normal, productive lives. If you have a job, I'm sorry. I your boss is an absolute ass, too bad. I've been there, many years ago. Didn't like it. Moved on.

Having a regular job is about the absolute worst way I can imagine going through life. The alarm clock, the traffic, the meetings, the BS, the commute home, are all so conducive to wasting one's life that I chose to avoid that path completely. Now, there are the benefits of a regular check, until you get laid off, that is, or fired, but how many of us use that money wisely to free ourselves from the mordant, the mundane, the mortal blows of employment?

You need to find a way out of the rat race. Here's my simple tip for the day: Sell something on ebay. Anything, one item a week at least. You can find something around the house that you don't use, want or need. Somebody will buy it. Put the money you make into a tin or bank or bottle, and leave it there. Keep adding every week. Just keep adding to it. You'll find the habit addictive and maybe, in 2 years or 10 years, you'll have enough to do whatever you want with your life. You'll have enough to quit your job and become a surfer, or a guitarist or something that doesn't involve checking in on a daily basis with a boss, who, by the way, could give a sh-t about you or your life.

Dow 10,680.77, +53.51 (0.50%)
NASDAQ 2,307.90, +25.59 (1.12%)
S&P 500 1,145.68, +9.46 (0.83%)
NYSE Composite 7,430.14, +59.69 (0.81%)

Advancers beat decliners, 4581-1924. New Highs: 405; New Lows: 55.

NYSE Volume 4,821,581,000
NASDAQ Volume 2,348,554,000

Oil, -$1.14, $79.65. Gold, +$8.60, $1,138.00. Silver, +$0.15, $18.40.

See ya.

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.