In a world which is prodded, directed, managed, and ultimately controlled by central banks and government authoritarians, the narrative is often more important than the reality of life under the thumb.
A case in point comes today - a day after the NASDAQ, S&P 500, Dow Industrial Average each set new all-time highs - in which actual economic data diverged from the preferred narrative of "everything is peachy-keen."
Two important data sets were released prior to the opening of US equity markets, July PPI and July retail sales. Both were disappointing.
PPI came in at -0.4% and retail sales posted a sluggish 0.0% (zero) growth, with the core - ex-autos - down 0.3%. These figures not only suggest deflation, but are actually indicative of a deflationary environment, the sole condition which can awaken central bankers from sound sleep in cold sweats and is, at the same time, a relief for cash-strapped, income-stagnant workers and consumers.
According to the book of central bank policy, should one actually exist, the wants and needs of the average working Jane or Joe is to be disregarded in such an instance, preference given to fat-cat Wall Street types who do no work, produce nothing of value, but rake in billions of dollars in fees, profits, and commissions for their trading activities in the stock market casino.
So it came to be that since stocks had just made all-time highs, a major setback could not and would not be tolerated. The major indices slumped most of the session, but were boosted higher going into the close, with losses trimmed on the Dow and S&P, the NASDAQ actually closing positive, as deemed appropriate by the masters of the the universe.
The rigging of markets is never going to work out long term. Massive mis-allocation of capital has been taking place since the last financial crisis, setting the global economy up for a colossal, catastrophic, cataclysmic collapse. Maybe it won't be as bad as our alliterative case suggests, if only because ordinary people have had time to adjust and prepare, but, for anyone owning stocks at current altitudes, losses are nearly a certainty. That is, unless the entire world remains in a state of suspended animation, normalcy bias, and cognitive dissonance, and the wild-eyed central bankers of the world are allowed to continue their insane policies of negative interest rates, naked purchasing of equities (already a de facto policy of the BOJ and ECB, still a clandestine operation by the US Fed), stimulus, and maybe, if we're really lucky, helicopter money.
The week ended well for the titans of Wall Street. Have a (few, lots of, keg of) beers, enjoy the weekend, and sleep on it.
Friday's Figures:
Dow Jones Industrial Average
18,576.47, -37.05 (-0.20%)
NASDAQ
5,232.89, +4.50 (0.09%)
S&P 500
2,184.05, -1.74 (-0.08%)
NYSE Composite
10,820.79, -15.26 (-0.14%)
The weekly figures weren't all that impressive, though the NASDAQ recorded its seventh consecutive weekly gain.
For the Week:
Dow: +32.94 (+0.18%)
NASDAQ: +11.77 (+0.23%)
S&P 500: +1.18 (+0.05%)
NYSE Comp.: +37.92 (+0.35%)
Showing posts with label central banks. Show all posts
Showing posts with label central banks. Show all posts
Friday, August 12, 2016
Thursday, August 11, 2016
The Most Dangerous Market Of Your Lifetime
Investors in equities - those imaginary certificates that signify ownership of a portion of a company or corporation - are giddy.
Stocks are near all-time highs with prosperity and class envy writ large on every tick higher.
Sure enough, these investors are shrewd operators of finance and business, many having earned their degrees from the highest academic schools in the world, the diplomas proudly displayed on the walls of their hedge fund offices and trading areas.
So, why would they possibly be worried about anything, particularly, the value of their holdings?
Simply put, there just aren't enough of them partaking at the font of wealth pouring out of Wall Street. Making matters more complicated and distressed is that the executives of the companies in which their wealth is concentrated have been buying back their shares at an unprecedented rate, making the shares of stock available smaller and smaller, but also boosting the price of those available, traded shares.
It's an easy supply and demand formula: fewer shares available makes them more valuable. In effect, if companies are inclined to take back their shares at inflated prices (a de-issuance, if you will), those remaining shares have to represent the entire value of the company.
Thus, a company could theoretically buy back all the shares but one, leaving that one share of stock to account for the full value of the company. In the case of an Apple or Google or any of the thousands of billion-dollar market cap companies, that one share would be "valued" at some absurd number, like $285 billion.
In such a hypothetical case, the problem arises when the owner of that $285 billion share of stock wished to unload it, convert it to cash or some other assets. Who would be the buyer? And would they actually pay the offered price (the ask) in such an illiquid market?
Obviously, the seller of that massive share of stock might have to offer a discount, and a big one. Instead of $285 billion, the seller might be forced to accept $140 billion, or less, in event of a liquidity crisis, which, incidentally, is what stock buybacks are creating. Since there hasn't been adequate demand for shares since the financial crisis of 2008-09, companies have resorted to buybacks just to keep their companies afloat, many of them becoming less and less profitable over time, making the price of their stock even more ridiculously valued.
When the rush for the exits begins in earnest, the big-time hedgies and fund managers will be bidding directly against each other, each with the same goal, to dump corporate paper assets in exchange for something more sturdy, ostensibly government bonds or hard, cold cash.
The markdowns, margin calls and defaults will be spectacular and this market, this unsustainable fantasy created by zero and negative interest rates, central bank stimulus, and government dumbness and numbness will be exposed to real supply and demand economics in a swan song for greed, manipulation, and wealth concentration.
That this will occur is unmistakable. Everything does not go up in price all the time, forever. The business cycle has not been abolished, neither here in the US, nor in Japan, China, the Eurozone or anywhere else.
Central banks are currently backstopping the entire Ponzi scheme of the stock market with interest rate swaps, repos, direct investment, and options manipulation.
It can't continue forever, though it can continue for a long time. It's a deadly and dangerous game, putting at risk the entire economy of the planet, or, at least that portion of the planet that wants to play along.
Increasingly, the as the musical chairs are being removed one by one, players are opting out and moving elsewhere. Largely, the lower and middle classes aren't playing at all. They're invested in necessities, cash, maybe collectibles, precious metals, and real estate.
Eventually, the sheer volume of trade by the 99% not in the stock market and incensed by government policies which seek to impoverish them further, will outweigh the phony prices for stocks listed on the NYSE and NASDAQ.
The stock market will suffer a severe breakdown at some point. The trick is not to know when that breakdown will occur, but to continue to prepare for its inevitability.
Most will not be prepared. Those who have prepared may or may not proper at the expense of everyone else, because the chaos - political, economic, social - will be astonishing.
The Boy Scouts of America issued their motto many years ago and it applies today: Be Prepared.
Be a Boy Scout.
Wednesday's Washout:
Dow Jones Industrial Average
18,495.66, -37.39 (-0.20%)
NASDAQ
5,204.58, -20.90 (-0.40%)
S&P 500
2,175.49, -6.25 (-0.29%)
NYSE Composite
10,774.98, -29.53 (-0.27%)
Stocks are near all-time highs with prosperity and class envy writ large on every tick higher.
Sure enough, these investors are shrewd operators of finance and business, many having earned their degrees from the highest academic schools in the world, the diplomas proudly displayed on the walls of their hedge fund offices and trading areas.
So, why would they possibly be worried about anything, particularly, the value of their holdings?
Simply put, there just aren't enough of them partaking at the font of wealth pouring out of Wall Street. Making matters more complicated and distressed is that the executives of the companies in which their wealth is concentrated have been buying back their shares at an unprecedented rate, making the shares of stock available smaller and smaller, but also boosting the price of those available, traded shares.
It's an easy supply and demand formula: fewer shares available makes them more valuable. In effect, if companies are inclined to take back their shares at inflated prices (a de-issuance, if you will), those remaining shares have to represent the entire value of the company.
Thus, a company could theoretically buy back all the shares but one, leaving that one share of stock to account for the full value of the company. In the case of an Apple or Google or any of the thousands of billion-dollar market cap companies, that one share would be "valued" at some absurd number, like $285 billion.
In such a hypothetical case, the problem arises when the owner of that $285 billion share of stock wished to unload it, convert it to cash or some other assets. Who would be the buyer? And would they actually pay the offered price (the ask) in such an illiquid market?
Obviously, the seller of that massive share of stock might have to offer a discount, and a big one. Instead of $285 billion, the seller might be forced to accept $140 billion, or less, in event of a liquidity crisis, which, incidentally, is what stock buybacks are creating. Since there hasn't been adequate demand for shares since the financial crisis of 2008-09, companies have resorted to buybacks just to keep their companies afloat, many of them becoming less and less profitable over time, making the price of their stock even more ridiculously valued.
When the rush for the exits begins in earnest, the big-time hedgies and fund managers will be bidding directly against each other, each with the same goal, to dump corporate paper assets in exchange for something more sturdy, ostensibly government bonds or hard, cold cash.
The markdowns, margin calls and defaults will be spectacular and this market, this unsustainable fantasy created by zero and negative interest rates, central bank stimulus, and government dumbness and numbness will be exposed to real supply and demand economics in a swan song for greed, manipulation, and wealth concentration.
That this will occur is unmistakable. Everything does not go up in price all the time, forever. The business cycle has not been abolished, neither here in the US, nor in Japan, China, the Eurozone or anywhere else.
Central banks are currently backstopping the entire Ponzi scheme of the stock market with interest rate swaps, repos, direct investment, and options manipulation.
It can't continue forever, though it can continue for a long time. It's a deadly and dangerous game, putting at risk the entire economy of the planet, or, at least that portion of the planet that wants to play along.
Increasingly, the as the musical chairs are being removed one by one, players are opting out and moving elsewhere. Largely, the lower and middle classes aren't playing at all. They're invested in necessities, cash, maybe collectibles, precious metals, and real estate.
Eventually, the sheer volume of trade by the 99% not in the stock market and incensed by government policies which seek to impoverish them further, will outweigh the phony prices for stocks listed on the NYSE and NASDAQ.
The stock market will suffer a severe breakdown at some point. The trick is not to know when that breakdown will occur, but to continue to prepare for its inevitability.
Most will not be prepared. Those who have prepared may or may not proper at the expense of everyone else, because the chaos - political, economic, social - will be astonishing.
The Boy Scouts of America issued their motto many years ago and it applies today: Be Prepared.
Be a Boy Scout.
Wednesday's Washout:
Dow Jones Industrial Average
18,495.66, -37.39 (-0.20%)
NASDAQ
5,204.58, -20.90 (-0.40%)
S&P 500
2,175.49, -6.25 (-0.29%)
NYSE Composite
10,774.98, -29.53 (-0.27%)
Thursday, August 4, 2016
Stocks Drag Trhough Thursday Session; Oil Bounces
Sluggish would be a compliment to the manner of trading that took place on Thursday, with the major indices scratching out meager gains, with the exception of the Dow 30, which took it slightly on the chin but avoided a knockout blow.
Market participants are unaware of what to do without some form of guidance by or from the Fed or other central bankers. It's almost as though markets are locked up with nowhere to go, which actually might be the case as the slog through August continues.
If there was any bright spot for the markets it was in the oil patch, where WTI crude rallied off a low spot at $40 per barrel a few days ago and now sits closer to $42. It isn't much of a move, but nervous oil specs will take any gains they can get at this juncture. With crude spilling out of every known production facility at near record pace, the glut has only worsened over the summer as demand has not exactly been robust.
The price of crude - if not for material intervention by players of significant size - should be hovering closer to $30 than $40. Crude has fallen into a bear market, more than 20% off the recent artificial high of $50 per barrel, which didn't last for more than a nanosecond.
A serious sell-off in crude over the next few weeks or into October could be the catalyst for more selling of equities and another dip in the stock markets, though the power of the Fed and other central banks to prevent anything even resembling a correction before the November presidential election cannot be underestimated.
Dow Jones Industrial Average
18,352.05, -2.95 (-0.02%)
NASDAQ
5,166.25, +6.51 (0.13%)
S&P 500
2,164.25, +0.46 (0.02%)
NYSE Composite
10,707.13, +11.99 (0.11%)
Market participants are unaware of what to do without some form of guidance by or from the Fed or other central bankers. It's almost as though markets are locked up with nowhere to go, which actually might be the case as the slog through August continues.
If there was any bright spot for the markets it was in the oil patch, where WTI crude rallied off a low spot at $40 per barrel a few days ago and now sits closer to $42. It isn't much of a move, but nervous oil specs will take any gains they can get at this juncture. With crude spilling out of every known production facility at near record pace, the glut has only worsened over the summer as demand has not exactly been robust.
The price of crude - if not for material intervention by players of significant size - should be hovering closer to $30 than $40. Crude has fallen into a bear market, more than 20% off the recent artificial high of $50 per barrel, which didn't last for more than a nanosecond.
A serious sell-off in crude over the next few weeks or into October could be the catalyst for more selling of equities and another dip in the stock markets, though the power of the Fed and other central banks to prevent anything even resembling a correction before the November presidential election cannot be underestimated.
Dow Jones Industrial Average
18,352.05, -2.95 (-0.02%)
NASDAQ
5,166.25, +6.51 (0.13%)
S&P 500
2,164.25, +0.46 (0.02%)
NYSE Composite
10,707.13, +11.99 (0.11%)
Wednesday, August 3, 2016
Dow Ends 7-Day Losing Streak, But Who's Watching The Transports And NYSE Composite?
Markets can seem exuberant, sometimes, even over-exuberant, as has lately been the case, without reason.
The current environment is one of those times by which market movements cannot be rationally explained, or as the Maestro himself - former Fed Chairman, Alan Greenspan - so aptly put it, the markets seem to be suffering from irrational exuberance.
This needs to be pointed out in the current context of manipulation and high-stakes politics between the Nah! Brexit vote and the very real threat that Donald Trump might somehow wrangle himself into the Oval Office come November... to the absolute terror of the elite status quo, including everyone from Warren Buffet to Mark Cuban to Janet Yellen and just about every member of congress and Wall Street hedge fund slickster.
Money Daily has recently been pointing out that the any positive developments by Mr. Trump are and have been met with scurrying, rat-like selling of shares on the equity markets by those with very thin, lizard-like skins, probably your average congressional insider and self-important hedge fund managers.
On the other side of the coin, there's the relentless marauding of the Fed, the central bank which is prohibited from buying or selling of equities (unlike the Bank of Japan, which is now a top 10 holder of 90% of the stocks listed on the NIKKEI 225), but which has ample resources by which to funnel money into stocks via proxies such as Goldman Sachs, JP Morgan Chase, and Merrill Lynch, the investment arm of Bank of America, or even the Bank of Japan, which, having run out of luck in the Nikkei, is probably more than willing to buy US stocks.
It's a safe bet that the Fed and their cronies halted and reversed the post-Brexit decline, sending the Dow and S&P 500 to all-time highs via options trading and positions on the VIX, the volatility index, widely parlayed by those in the hedging business.
In fact, days before the Brexit vote, heads of the Swiss, Canadian, US and Japanese central banks were already in collusion to overcome any nasty "turbulence" in the markets, as openly reported by none other than Bloomberg.
So, it shouldn't come as any stretch of the imagination that the same types who distort presidential polls and have the mainstream media wrapped around their little fingers should also keep stocks artificially high as long as it appears that Hillary Clinton will be elected president come November 8.
Once stocks got to extreme levels, a bell went off in the heads of the big traders, telling them to take profits, resulting in a seven-day sell-off (otherwise known as consolidation), culminating in Tuesday's near-100-point decline on the Dow.
Wednesday, the Dow just barely hung on for a small gain, as did the other indices, however, the recent highs achieved by the Dow can be seen as absolute phonies, when referenced to the Dow Jones Transportation Average (DJTA), which sold-off and rebounded like other indexes post-Brexit, but did not attain new all-time highs (for the record, neither did the NASDAQ, nor the NYSE Composite, the broadest index of US stocks).
The Transports had a good run of it, topping out at 8048.09, but were 100 points shy of the all-time record, set back in April, 2015, at 8149.00.
The same is true on the NYSE Composite (NYA), which topped out recently at 10815.43, a far cry from May 2015, when the index stood proudly at 11254.87.
Taking away from this divergence in major markets is the idea that central banks and their friends can only influence so much. They often (make that, ALWAYS) leave bits and pieces of evidence of foul play scattered about. 100 or so points on the Transportation Average and over 400 points on the Composite shows just how sloppy and misguided their adventures into manipulation of not just stocks, but perceptions, have become.
Everybody watches the Dow and S&P. The transports and composite indices, not so much, or so they believe.
Dow Jones Industrial Average
18,355.00, +41.23 (0.23%)
NASDAQ
5,159.74, +22.00 (0.43%)
S&P 500
2,163.79, +6.76 (0.31%)
NYSE Composite
10,695.14, +34.01 (0.32%)
The current environment is one of those times by which market movements cannot be rationally explained, or as the Maestro himself - former Fed Chairman, Alan Greenspan - so aptly put it, the markets seem to be suffering from irrational exuberance.
This needs to be pointed out in the current context of manipulation and high-stakes politics between the Nah! Brexit vote and the very real threat that Donald Trump might somehow wrangle himself into the Oval Office come November... to the absolute terror of the elite status quo, including everyone from Warren Buffet to Mark Cuban to Janet Yellen and just about every member of congress and Wall Street hedge fund slickster.
Money Daily has recently been pointing out that the any positive developments by Mr. Trump are and have been met with scurrying, rat-like selling of shares on the equity markets by those with very thin, lizard-like skins, probably your average congressional insider and self-important hedge fund managers.
On the other side of the coin, there's the relentless marauding of the Fed, the central bank which is prohibited from buying or selling of equities (unlike the Bank of Japan, which is now a top 10 holder of 90% of the stocks listed on the NIKKEI 225), but which has ample resources by which to funnel money into stocks via proxies such as Goldman Sachs, JP Morgan Chase, and Merrill Lynch, the investment arm of Bank of America, or even the Bank of Japan, which, having run out of luck in the Nikkei, is probably more than willing to buy US stocks.
It's a safe bet that the Fed and their cronies halted and reversed the post-Brexit decline, sending the Dow and S&P 500 to all-time highs via options trading and positions on the VIX, the volatility index, widely parlayed by those in the hedging business.
In fact, days before the Brexit vote, heads of the Swiss, Canadian, US and Japanese central banks were already in collusion to overcome any nasty "turbulence" in the markets, as openly reported by none other than Bloomberg.
So, it shouldn't come as any stretch of the imagination that the same types who distort presidential polls and have the mainstream media wrapped around their little fingers should also keep stocks artificially high as long as it appears that Hillary Clinton will be elected president come November 8.
Once stocks got to extreme levels, a bell went off in the heads of the big traders, telling them to take profits, resulting in a seven-day sell-off (otherwise known as consolidation), culminating in Tuesday's near-100-point decline on the Dow.
Wednesday, the Dow just barely hung on for a small gain, as did the other indices, however, the recent highs achieved by the Dow can be seen as absolute phonies, when referenced to the Dow Jones Transportation Average (DJTA), which sold-off and rebounded like other indexes post-Brexit, but did not attain new all-time highs (for the record, neither did the NASDAQ, nor the NYSE Composite, the broadest index of US stocks).
The Transports had a good run of it, topping out at 8048.09, but were 100 points shy of the all-time record, set back in April, 2015, at 8149.00.
The same is true on the NYSE Composite (NYA), which topped out recently at 10815.43, a far cry from May 2015, when the index stood proudly at 11254.87.
Taking away from this divergence in major markets is the idea that central banks and their friends can only influence so much. They often (make that, ALWAYS) leave bits and pieces of evidence of foul play scattered about. 100 or so points on the Transportation Average and over 400 points on the Composite shows just how sloppy and misguided their adventures into manipulation of not just stocks, but perceptions, have become.
Everybody watches the Dow and S&P. The transports and composite indices, not so much, or so they believe.
Dow Jones Industrial Average
18,355.00, +41.23 (0.23%)
NASDAQ
5,159.74, +22.00 (0.43%)
S&P 500
2,163.79, +6.76 (0.31%)
NYSE Composite
10,695.14, +34.01 (0.32%)
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%)
Monday, July 25, 2016
Monday Blues: Stocks Fall; Is It The Trump, Clinton, Sanders or Putin Effect?
Over the weekend, the political climate became highly charged with the release of thousands of emails from the servers of the Democratic National Committee courtesy of Wikileaks and, as some presume, the assistance of Russian operatives. The propaganda nailing Russia as the bad guy was already underway as of the Sunday news shows. It's very likely to be completely spurious.
The leaked emails revealed a concerted effort to swing the primary vote toward the favored candidate, Hillary Clinton, and away from upstart radical, Bernie Sanders. To say the least, the emails were scandalous and disgusting, revealing just how deeply ingrained the status quo has become, and the lengths to which they will plumb in order to have public opinion bend to their will.
Suffering the most from the fallout was DNC chairwoman Debbie Wasserman Schultz, who was forced to announce her resignation as chair on Saturday. Ms. Schultz announced that she would gavel in the convention on Monday and gavel it out on Thursday.
Those plans fell completely apart on Monday as first, Ms. Schultz was shouted down as she attempted to address the Florida delegation, ironically, people from her own state. After being unceremoniously whisked from the stage, Ms. Schultz announced that she will not be associated with the convention in any way.
In two words: she's fired.
As has been mentioned on this blog in the past and as recently as the prior post which wrapped up last week, once the powers that be begin getting a whiff of a Donald Trump victory in November's presidential election, stocks will fall, leaving the Donald a mess not unlike what greeted Barack Obama in 2008.
So it is, when central banks and oligarchical politicians believe they can control not only markets, but the lives of the people investing in them.
The modern equivalent of torches and pitchforks are cellphone videos and anti-establishment signs.
Peace. It's a foreign concept in this period and the madness is swelling.
Monday's Politically-Charged Changes:
Dow Jones Industrial Average
18,493.06, -77.79 (-0.42%)
NASDAQ
5,097.63, -2.53 (-0.05%)
S&P 500
2,168.48, -6.55 (-0.30%)
NYSE Composite
10,752.43, -52.61 (-0.49%)
The leaked emails revealed a concerted effort to swing the primary vote toward the favored candidate, Hillary Clinton, and away from upstart radical, Bernie Sanders. To say the least, the emails were scandalous and disgusting, revealing just how deeply ingrained the status quo has become, and the lengths to which they will plumb in order to have public opinion bend to their will.
Suffering the most from the fallout was DNC chairwoman Debbie Wasserman Schultz, who was forced to announce her resignation as chair on Saturday. Ms. Schultz announced that she would gavel in the convention on Monday and gavel it out on Thursday.
Those plans fell completely apart on Monday as first, Ms. Schultz was shouted down as she attempted to address the Florida delegation, ironically, people from her own state. After being unceremoniously whisked from the stage, Ms. Schultz announced that she will not be associated with the convention in any way.
In two words: she's fired.
As has been mentioned on this blog in the past and as recently as the prior post which wrapped up last week, once the powers that be begin getting a whiff of a Donald Trump victory in November's presidential election, stocks will fall, leaving the Donald a mess not unlike what greeted Barack Obama in 2008.
So it is, when central banks and oligarchical politicians believe they can control not only markets, but the lives of the people investing in them.
The modern equivalent of torches and pitchforks are cellphone videos and anti-establishment signs.
Peace. It's a foreign concept in this period and the madness is swelling.
Monday's Politically-Charged Changes:
Dow Jones Industrial Average
18,493.06, -77.79 (-0.42%)
NASDAQ
5,097.63, -2.53 (-0.05%)
S&P 500
2,168.48, -6.55 (-0.30%)
NYSE Composite
10,752.43, -52.61 (-0.49%)
July 18-22: Stocks Level Out After Massive Gains
The huge run-up in stock prices appears to be running out of steam, or buyers, or both.
Since bottoming out post-Brexit, major US indices have ramped higher by nearly ten percent over just the past four weeks. The Dow, for instance, has gained over 1500 points while powering to new high after new high.
The most recent week, however, was the weakest in the last four, with the possible exception of the NASDAQ, which was up more than double its rivals in percentage terms.
This is not to say that the recent rally is over. Far from it, there is no sign of exhaustion in the ranks of central banks, especially the Fed, which will be pulling out all the stops to keep the narrative of an "improving economy" rolling through the week, highlighted by the Democratic National Convention in Philadelphia.
Following the Philly love-fest for Hillary Clinton (never mind the various email and other scandals surrounding the candidate and the rest of the Dems... they will be swept under the rug), the Fed will continue to pour money into stocks through their appointed agents right up until the election.
Setting up what could be one of the easiest buying opportunities in recent memory (though as memory serves, the past eight years haven't been too difficult for stock traders), stocks or index funds could be a very safe place over the coming three months.
A Trump victory in November would probably derail both the giddy narrative and the actual stock market rally, as the status quo would then find themselves on the defensive, with the White House in the hands of a non-politician, non-elitist, populist campaigner. Should Clinton capture the presidency, a slow decline might be the more likely scenario, as the wheels of industry continue their slow grind into mediocrity.
With so much uncertainty, investors have been seen hoarding hard assets. Paid-up real estate, precious metals, machinery and tools of trades can still be had at reasonable levels, and they should not lose much value over the longer term. In fact, they should appreciate quite nicely no matter what happens after November.
For The Week:
Dow: +54.30 (+0.2(%)
S&P 500: +13.29 (+0.61)
NASDAQ: +70.57 (+1.40)
Friday:
NASDAQ Composite
5,100.16, +26.26 (0.52%)
Dow Jones Industrial Average
18,570.85, +53.62 (0.29%)
S&P 500
2,175.03, +9.86 (0.46%)
Since bottoming out post-Brexit, major US indices have ramped higher by nearly ten percent over just the past four weeks. The Dow, for instance, has gained over 1500 points while powering to new high after new high.
The most recent week, however, was the weakest in the last four, with the possible exception of the NASDAQ, which was up more than double its rivals in percentage terms.
This is not to say that the recent rally is over. Far from it, there is no sign of exhaustion in the ranks of central banks, especially the Fed, which will be pulling out all the stops to keep the narrative of an "improving economy" rolling through the week, highlighted by the Democratic National Convention in Philadelphia.
Following the Philly love-fest for Hillary Clinton (never mind the various email and other scandals surrounding the candidate and the rest of the Dems... they will be swept under the rug), the Fed will continue to pour money into stocks through their appointed agents right up until the election.
Setting up what could be one of the easiest buying opportunities in recent memory (though as memory serves, the past eight years haven't been too difficult for stock traders), stocks or index funds could be a very safe place over the coming three months.
A Trump victory in November would probably derail both the giddy narrative and the actual stock market rally, as the status quo would then find themselves on the defensive, with the White House in the hands of a non-politician, non-elitist, populist campaigner. Should Clinton capture the presidency, a slow decline might be the more likely scenario, as the wheels of industry continue their slow grind into mediocrity.
With so much uncertainty, investors have been seen hoarding hard assets. Paid-up real estate, precious metals, machinery and tools of trades can still be had at reasonable levels, and they should not lose much value over the longer term. In fact, they should appreciate quite nicely no matter what happens after November.
For The Week:
Dow: +54.30 (+0.2(%)
S&P 500: +13.29 (+0.61)
NASDAQ: +70.57 (+1.40)
Friday:
NASDAQ Composite
5,100.16, +26.26 (0.52%)
Dow Jones Industrial Average
18,570.85, +53.62 (0.29%)
S&P 500
2,175.03, +9.86 (0.46%)
Sunday, July 17, 2016
Weekend Edition: Historic Rally Stalls At End Of Week
Anticlimactic was Friday's market action after a sustained two-week, post-Brexit collapse rally sent the Dow and S&P 500 to new all-time highs.
Stocks finished with one of their their weakest performances of the month, though it may just be a pause in an otherwise relentless advance led by central bank buying.
Yes, you're reading that correctly; central banks were the leading participants in the post-Brexit rally, preventing what may have turned into a widespread financial panic had the BOJ and ECB not intervened with either direct purchases of stocks or the same via proxies.
This leads to a time-worn dilemma in market confidence otherwise bandied about as moral hazard.
It's the same as fixing horse races or weighting the balls on a roulette wheel. Rigged financial markets will sooner or later be found to be lacking in both stability and longevity, which, when dealing with life-spanning investments touted by the major brokerages, are - or should be - two major pillars of strength.
If central banks continue to play fast and loose with not only monetary policy and begin to dabble in fiscal policy (well underway) and overtly entering trading markets (also pretty obvious), it may be only a matter of time before the curtain is rolled back and the man in the booth behind the controls is revealed as a faker, a fraud, a charlatan, and the foolishly following investors taken in by the scheme.
In simple terms, caution continues to be the best friend of anyone with reasonable means. Hard assets appear once again to be not only safe, but sure.
Many in the financial arena thought that the world was ending in 2008, though afterthought now is clear that an era of unbridled intervention by central banks was only just beginning.
How and when it ends are open questions, but certainly, valuations are stretched to extremes, data - along with stock prices - is being manipulated, and individuals investors have long ago headed for safer havens.
The game may go on for years more, which is likely the path of least resistance since there's so much riding on a continuation of current politics and economics. The thought that the larger the debt and fraud (and both are enormous), the greater the fall may or may not be a truism.
What's working now may be reversed in the near future. One glance at YTD charts of either gold or silver tells you that a paradigm shift may be already underway.
Friday's Closing Numbers:
Dow Jones Industrial Average
18,516.55, +10.14 (0.05%)
NASDAQ
5,029.59, -4.47 (-0.09%)
S&P 500
2,161.74, -2.01 (-0.09%)
NYSE Composite
10,773.12, -13.51 (-0.13%)
For the Week:
Dow: +369.81 (+2.04%)
S&P 500: +31.84 (+1.49%)
NASDAQ: +72.83 (+1.47%)
Stocks finished with one of their their weakest performances of the month, though it may just be a pause in an otherwise relentless advance led by central bank buying.
Yes, you're reading that correctly; central banks were the leading participants in the post-Brexit rally, preventing what may have turned into a widespread financial panic had the BOJ and ECB not intervened with either direct purchases of stocks or the same via proxies.
This leads to a time-worn dilemma in market confidence otherwise bandied about as moral hazard.
It's the same as fixing horse races or weighting the balls on a roulette wheel. Rigged financial markets will sooner or later be found to be lacking in both stability and longevity, which, when dealing with life-spanning investments touted by the major brokerages, are - or should be - two major pillars of strength.
If central banks continue to play fast and loose with not only monetary policy and begin to dabble in fiscal policy (well underway) and overtly entering trading markets (also pretty obvious), it may be only a matter of time before the curtain is rolled back and the man in the booth behind the controls is revealed as a faker, a fraud, a charlatan, and the foolishly following investors taken in by the scheme.
In simple terms, caution continues to be the best friend of anyone with reasonable means. Hard assets appear once again to be not only safe, but sure.
Many in the financial arena thought that the world was ending in 2008, though afterthought now is clear that an era of unbridled intervention by central banks was only just beginning.
How and when it ends are open questions, but certainly, valuations are stretched to extremes, data - along with stock prices - is being manipulated, and individuals investors have long ago headed for safer havens.
The game may go on for years more, which is likely the path of least resistance since there's so much riding on a continuation of current politics and economics. The thought that the larger the debt and fraud (and both are enormous), the greater the fall may or may not be a truism.
What's working now may be reversed in the near future. One glance at YTD charts of either gold or silver tells you that a paradigm shift may be already underway.
Friday's Closing Numbers:
Dow Jones Industrial Average
18,516.55, +10.14 (0.05%)
NASDAQ
5,029.59, -4.47 (-0.09%)
S&P 500
2,161.74, -2.01 (-0.09%)
NYSE Composite
10,773.12, -13.51 (-0.13%)
For the Week:
Dow: +369.81 (+2.04%)
S&P 500: +31.84 (+1.49%)
NASDAQ: +72.83 (+1.47%)
Thursday, July 14, 2016
Dow, S&P Post New Highs Again, But, Who's Doing The Buying?
In a market that more often resembles a three-ring circus than an amalgamation of the best corporate entities vying for favoritism among investors via increased earnings, revenue and expectations, the recent melt-up in US equities has more than just a few analysts scratching their quickly-balding heads.
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.
So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.
For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"
The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.
Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.
Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.
What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.
Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.
Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.
Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.
Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.
The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.
New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.
Enjoy it while it lasts.
-- Fearless Rick
New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)
NASDAQ
5,034.06, +28.33 (0.57%)
S&P 500
2,163.75, +11.32 (0.53%)
NYSE Composite
10,786.63, +52.43 (0.49%)
Sunday, July 10, 2016
SPX Near All-Time Highs On June Jobs Euphoria
On May 20, 2015, the S&P 500 index (SPX) reached an all-time intra-day high of 2,134.72. The following session, May 21, it set a closing record at 2,130.82.
This Friday, the S&P closed at 2,190.90, settling off the day's high of 2,131.71, so, no records were set in the first full trading week of July (when nobody's paying particular attention), but the major indices are now poised to run beyond their previous highs, set more than a year ago.
Thus, the banking and global finance cartel - which is in complete and unbreakable control of all "trading" markets - has waived any consideration that the third-longest equity bull market in the history of US stock markets was coming to an end.
Bears, those sadly depressed members of the pessimism society (this blog included) are never going to be satisfied it seems. Drops on the major indices of 10% or more (corrections) are not tolerated. 20% declines - bear markets by definition - are not open for discussion within the megalithic construct of global central bank monetarism.
Expect new all-time highs on the S&P promptly Monday morning, with the Dow soon to follow (all time highs of 18,351.36 intra-day and 18,312.39 closing, both on May 19, 2015). The NASDAQ has a bit further to travel, having made its all-time closing high of 5,153.97 on June 22, 2015, reaching its zenith two days later with an intra-day value of 5,164.36.
Whether these prices and averages are justified by fundamental measures of valuation is debatable. By many measures stocks are overpriced. The trading prices of some of the more popular stocks - especially those focused in the technology area (Facebook, Google, Amazon, Apple to name a few) - currently trade at nose-bleed valuations.
According to the financial press, what prompted the sudden jerk higher of US stock markets was Friday's non-farm payroll figures from June.
The Bureau of Labor Statistics (BLS) said non-farm payrolls rose to a seasonally adjusted 287K, from 11K in May, that figure revised lower, from 38K.
Analysts had expected U.S. non-farm payrolls to rise 175K last month, so the surprise factor was enormous. Muddying the waters beyond the mystifying May numbers as compared to June - the largest net gain in eight months, is that the BLS numbers are largely massaged, maneuvered, and mangled into whatever pretzel-logical outcome is desired at the moment.
In a word, the BLS numbers are untrustworthy.
David Rosenberg suggests that the month of June did not in fact show a massive gain, but employment actually declined by 119,000 during the month.
Here is another article (from February 2016) that breaks down the faulty, misleading methodology employed by the BLS.
David Stockman opines that the monthly BLS survey is mostly noise and needs to be veiwed over longer periods in order to offer convincing trends and that the May and June tallies, taken together, amount to nothing more than statistical numbness.
Effectively, the BLS survey figures move markets as the algos respond entirely to the headlines, which were out-of-the-park awesome in June. The details were more nuanced, but such does not have influence on stocks.
In any case, since, the Brexit vote, central banks and central planners have returned in force to control the narrative, which, in their view, must continue to be nothing but positive.
For an alternative view, look at the response of gold, silver and especially, government bonds, the 10-year note and 30-year bond in particular, both of which continued to make all-time lows this week.
For the week:
Dow: +197.37 (+1.10%)
S&P 500: +26.95 (+1.28%)
NASDAQ: +94.19 (+1.94%)
Friday's Fantasy:
S&P 500: 2,129.90, +32.00 (1.53%)
Dow: 18,146.74, +250.86 (1.40%)
NASDAQ: 4,956.76, +79.95 (1.64%)
Crude Oil 45.12 -0.04% Gold 1,367.40 +0.39% EUR/USD 1.1051 -0.09% 10-Yr Bond 1.37 -1.51% Corn 361.25 +3.66% Copper 2.12 +0.02% Silver 20.35 +2.58% Natural Gas 2.82 +1.44% Russell 2000 1,177.36 +2.40% VIX 13.20 -10.57% BATS 1000 20,677.17 0.00% GBP/USD 1.2952 +0.30% USD/JPY 100.4600 -0.27%
This Friday, the S&P closed at 2,190.90, settling off the day's high of 2,131.71, so, no records were set in the first full trading week of July (when nobody's paying particular attention), but the major indices are now poised to run beyond their previous highs, set more than a year ago.
Thus, the banking and global finance cartel - which is in complete and unbreakable control of all "trading" markets - has waived any consideration that the third-longest equity bull market in the history of US stock markets was coming to an end.
Bears, those sadly depressed members of the pessimism society (this blog included) are never going to be satisfied it seems. Drops on the major indices of 10% or more (corrections) are not tolerated. 20% declines - bear markets by definition - are not open for discussion within the megalithic construct of global central bank monetarism.
Expect new all-time highs on the S&P promptly Monday morning, with the Dow soon to follow (all time highs of 18,351.36 intra-day and 18,312.39 closing, both on May 19, 2015). The NASDAQ has a bit further to travel, having made its all-time closing high of 5,153.97 on June 22, 2015, reaching its zenith two days later with an intra-day value of 5,164.36.
Whether these prices and averages are justified by fundamental measures of valuation is debatable. By many measures stocks are overpriced. The trading prices of some of the more popular stocks - especially those focused in the technology area (Facebook, Google, Amazon, Apple to name a few) - currently trade at nose-bleed valuations.
According to the financial press, what prompted the sudden jerk higher of US stock markets was Friday's non-farm payroll figures from June.
The Bureau of Labor Statistics (BLS) said non-farm payrolls rose to a seasonally adjusted 287K, from 11K in May, that figure revised lower, from 38K.
Analysts had expected U.S. non-farm payrolls to rise 175K last month, so the surprise factor was enormous. Muddying the waters beyond the mystifying May numbers as compared to June - the largest net gain in eight months, is that the BLS numbers are largely massaged, maneuvered, and mangled into whatever pretzel-logical outcome is desired at the moment.
In a word, the BLS numbers are untrustworthy.
David Rosenberg suggests that the month of June did not in fact show a massive gain, but employment actually declined by 119,000 during the month.
When the Household survey is put on the same comparable footing as the payroll series (the payroll and population-concept adjusted number), employment fell 119,000 in June — again calling into question the veracity of the actual payroll report — and is down 517,000 through this span. The six-month trend has dipped below the zero-line and this has happened but two other times during this seven-year expansion.
Here is another article (from February 2016) that breaks down the faulty, misleading methodology employed by the BLS.
David Stockman opines that the monthly BLS survey is mostly noise and needs to be veiwed over longer periods in order to offer convincing trends and that the May and June tallies, taken together, amount to nothing more than statistical numbness.
Effectively, the BLS survey figures move markets as the algos respond entirely to the headlines, which were out-of-the-park awesome in June. The details were more nuanced, but such does not have influence on stocks.
In any case, since, the Brexit vote, central banks and central planners have returned in force to control the narrative, which, in their view, must continue to be nothing but positive.
For an alternative view, look at the response of gold, silver and especially, government bonds, the 10-year note and 30-year bond in particular, both of which continued to make all-time lows this week.
For the week:
Dow: +197.37 (+1.10%)
S&P 500: +26.95 (+1.28%)
NASDAQ: +94.19 (+1.94%)
Friday's Fantasy:
S&P 500: 2,129.90, +32.00 (1.53%)
Dow: 18,146.74, +250.86 (1.40%)
NASDAQ: 4,956.76, +79.95 (1.64%)
Crude Oil 45.12 -0.04% Gold 1,367.40 +0.39% EUR/USD 1.1051 -0.09% 10-Yr Bond 1.37 -1.51% Corn 361.25 +3.66% Copper 2.12 +0.02% Silver 20.35 +2.58% Natural Gas 2.82 +1.44% Russell 2000 1,177.36 +2.40% VIX 13.20 -10.57% BATS 1000 20,677.17 0.00% GBP/USD 1.2952 +0.30% USD/JPY 100.4600 -0.27%
Monday, June 27, 2016
Stormy Monday: Brexit Triggering Global Market Chaos
If the financial elites (we're looking at you Fed Governors, ECB ministers, central bankers worldwide) needed a rationale for triggering a cataclysmic collapse of global finance, they may have found their huckleberry in the British vote to leave the European Union, the Brexit, as it has become known.
Since Thursday's astonishing vote by the populace of Great Britain to exit what was once known as the European Common Merket and has morphed into a Hobbesian nightmare of Leviathan proportions known as the European Union, European Commission, European Central Bank and an amalgam of overlapping bureaucratic rules, regulations, guidelines, laws and edicts, a suddenly disunited Europe is making life miserable for masters of finance.
Stocks have been selling off at frantic paces since the verdict of the Brits, with uncertainty the keynote of the ongoing dialogue.
While the NIKKEI responded in heroic fashion on Monday, gaining 357 points, stock indices in Europe and the US were dragged down through the week's opening session, with more on the plate.
Whether Brexit is the absolute catalyst for systemic financial collapse is too early to tell, though it has certainly - to this point - served as an adequate warning shot.
Worth knowing is that the general financial condition of the world's developed and emerging economies has not been right since the first great financial shock of 2008, and efforts to repair what was broken then were akin to bandages applies to a severed artery, with the same result. The bleeding continued, and the patient never really recovered.
For eight years the global financial elites have tried to piece together a working economic narrative, to little avail and now they are faced with disintegration of their seminal project, the EU and the funny money known as euros.
Markets today were trembled by rabid selling, pushing the Dow well below its established range between 17,500 and 18,000, with the bottom falling out in dramatic fashion. All-time highs reached just over a year ago are now being viewed as unattainable, setting in motion the potential for first, a 10% correction, followed by the certainty of a full-blown bear market, which has been a long time coming.
Defining those two terms would be a matter of simplicity, if not for the vagaries of the financial lexicon. A correction may be said to be 10% of "recent" highs, and the same could be said of the bear market reading, but, if losses continue to mount, percentages may be the smallest of worries, since real dollars, euros, yen and yuan will be at stake.
With an already turbulent presidential election already underway, caution would be the preferred method of approaching finances over the following six to eight months. While many ordinary people will no doubt practice frugality and thrift in their affairs, there's some considerable doubt as to how governments and central bankers react to what are, no doubt, challenging times ahead.
Bad Bad Brits and Brexit:
S&P 500: 2,000.54, -36.87 (1.81%)
Dow: 17,140.24, -260.51 (1.50%)
NASDAQ: 4,594.44, -113.54 (2.41%)
Crude Oil 46.71 -1.95% Gold 1,329.90 +0.57% EUR/USD 1.1021 -0.19% 10-Yr Bond 1.46 -7.54% Corn 393.50 -0.19% Copper 2.13 +0.71% Silver 17.78 -0.02% Natural Gas 2.76 +2.41% Russell 2000 1,089.65 -3.36% VIX 23.43 -9.05% BATS 1000 20,677.17 0.00% GBP/USD 1.3218 -1.51% USD/JPY 102.0450 +0.25%
Since Thursday's astonishing vote by the populace of Great Britain to exit what was once known as the European Common Merket and has morphed into a Hobbesian nightmare of Leviathan proportions known as the European Union, European Commission, European Central Bank and an amalgam of overlapping bureaucratic rules, regulations, guidelines, laws and edicts, a suddenly disunited Europe is making life miserable for masters of finance.
Stocks have been selling off at frantic paces since the verdict of the Brits, with uncertainty the keynote of the ongoing dialogue.
While the NIKKEI responded in heroic fashion on Monday, gaining 357 points, stock indices in Europe and the US were dragged down through the week's opening session, with more on the plate.
Whether Brexit is the absolute catalyst for systemic financial collapse is too early to tell, though it has certainly - to this point - served as an adequate warning shot.
Worth knowing is that the general financial condition of the world's developed and emerging economies has not been right since the first great financial shock of 2008, and efforts to repair what was broken then were akin to bandages applies to a severed artery, with the same result. The bleeding continued, and the patient never really recovered.
For eight years the global financial elites have tried to piece together a working economic narrative, to little avail and now they are faced with disintegration of their seminal project, the EU and the funny money known as euros.
Markets today were trembled by rabid selling, pushing the Dow well below its established range between 17,500 and 18,000, with the bottom falling out in dramatic fashion. All-time highs reached just over a year ago are now being viewed as unattainable, setting in motion the potential for first, a 10% correction, followed by the certainty of a full-blown bear market, which has been a long time coming.
Defining those two terms would be a matter of simplicity, if not for the vagaries of the financial lexicon. A correction may be said to be 10% of "recent" highs, and the same could be said of the bear market reading, but, if losses continue to mount, percentages may be the smallest of worries, since real dollars, euros, yen and yuan will be at stake.
With an already turbulent presidential election already underway, caution would be the preferred method of approaching finances over the following six to eight months. While many ordinary people will no doubt practice frugality and thrift in their affairs, there's some considerable doubt as to how governments and central bankers react to what are, no doubt, challenging times ahead.
Bad Bad Brits and Brexit:
S&P 500: 2,000.54, -36.87 (1.81%)
Dow: 17,140.24, -260.51 (1.50%)
NASDAQ: 4,594.44, -113.54 (2.41%)
Crude Oil 46.71 -1.95% Gold 1,329.90 +0.57% EUR/USD 1.1021 -0.19% 10-Yr Bond 1.46 -7.54% Corn 393.50 -0.19% Copper 2.13 +0.71% Silver 17.78 -0.02% Natural Gas 2.76 +2.41% Russell 2000 1,089.65 -3.36% VIX 23.43 -9.05% BATS 1000 20,677.17 0.00% GBP/USD 1.3218 -1.51% USD/JPY 102.0450 +0.25%
Wednesday, June 15, 2016
Fed Does Not Hike Rates, As Expected; Markets Dull
Not only has the Fed run out of inflation-and-recession-fighting tools and rhetoric, but the US central bank seems to be running out of mental acuity and moral purpose.
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
Wednesday, June 1, 2016
Suspicious Behavior In Stocks Leads To Belief That Fed Is Buying
After dismal data out of Japan and some troubling manufacturing numbers in the US, stocks opened sharply lower on Wednesday, reversing the short-covering faux rally into Tuesday's close.
But, the trauma was short-lived, ending abruptly, absolutely minutes after the open. Some people surely got caught short at the wrong moment, thinking, wrongly, that the era of central bank noise and confusion was about to meet a fitting end. Stocks continued an inexorable ascent throughout the day, based on nothing other than front-running computer bots and anti-competitive algos run by criminal banks.
Of course, no such thing would happen. The signs of a collapsing global economy have been with us for the past seven or eight years now, but somehow, stocks continue to pace along, and lately, they just fluctuate in a narrow zone.
This trading conundrum - in which outflows from equities has been ongoing for seventeen weeks - has to be the work of the central bank, or banks, acting in concert to keep asset prices from collapsing to where they might belong, about 40-=0% lower than where they currently reside.
Since the Bank of Japan has been spotted owning a hefty percentage of the biggest companies on the Nikkei, it shouldn't surprise anybody that the Federal Reserve is working behind the scenes to keep US equities floating on vapors.
It's a disgusting, completely inappropriate condition. The Fed is engaged in the worst form of market manipulation, in secret, buying selectively to keep prices from collapsing, in a most offensive manner.
While Money Daily considers this kind of activity to be nothing short of criminal behavior at best and immoral destruction of the whole economy at worst, others are entitled to their opinions, such as the corrupt Keyenesians and insiders on Capitol Hill who profit handsomely from Fed interventions.
Their opinions are typically based on nothing other than self-interest, greed and keeping their jobs. They should all be out on the street. Hope springs eternal.
Maybe by November.
Oh, Happy Day!
S&P 500: 2,099.33, +2.37 (0.11%)
Dow: 17,789.67, +2.47 (0.01%)
NASDAQ: 4,952.25, +4.20 (0.08%)
Crude Oil 48.91 -0.39% Gold 1,215.20 -0.19% EUR/USD 1.1188 +0.02% 10-Yr Bond 1.85 +0.65% Corn 412.00 +1.79% Copper 2.07 -1.07% Silver 15.98 -0.12% Natural Gas 2.74 +0.84% Russell 2000 1,163.04 +0.71% VIX 14.20 +0.07% BATS 1000 20,677.17 0.00% GBP/USD 1.4411 -0.01% USD/JPY 109.4650 -0.03%
But, the trauma was short-lived, ending abruptly, absolutely minutes after the open. Some people surely got caught short at the wrong moment, thinking, wrongly, that the era of central bank noise and confusion was about to meet a fitting end. Stocks continued an inexorable ascent throughout the day, based on nothing other than front-running computer bots and anti-competitive algos run by criminal banks.
Of course, no such thing would happen. The signs of a collapsing global economy have been with us for the past seven or eight years now, but somehow, stocks continue to pace along, and lately, they just fluctuate in a narrow zone.
This trading conundrum - in which outflows from equities has been ongoing for seventeen weeks - has to be the work of the central bank, or banks, acting in concert to keep asset prices from collapsing to where they might belong, about 40-=0% lower than where they currently reside.
Since the Bank of Japan has been spotted owning a hefty percentage of the biggest companies on the Nikkei, it shouldn't surprise anybody that the Federal Reserve is working behind the scenes to keep US equities floating on vapors.
It's a disgusting, completely inappropriate condition. The Fed is engaged in the worst form of market manipulation, in secret, buying selectively to keep prices from collapsing, in a most offensive manner.
While Money Daily considers this kind of activity to be nothing short of criminal behavior at best and immoral destruction of the whole economy at worst, others are entitled to their opinions, such as the corrupt Keyenesians and insiders on Capitol Hill who profit handsomely from Fed interventions.
Their opinions are typically based on nothing other than self-interest, greed and keeping their jobs. They should all be out on the street. Hope springs eternal.
Maybe by November.
Oh, Happy Day!
S&P 500: 2,099.33, +2.37 (0.11%)
Dow: 17,789.67, +2.47 (0.01%)
NASDAQ: 4,952.25, +4.20 (0.08%)
Crude Oil 48.91 -0.39% Gold 1,215.20 -0.19% EUR/USD 1.1188 +0.02% 10-Yr Bond 1.85 +0.65% Corn 412.00 +1.79% Copper 2.07 -1.07% Silver 15.98 -0.12% Natural Gas 2.74 +0.84% Russell 2000 1,163.04 +0.71% VIX 14.20 +0.07% BATS 1000 20,677.17 0.00% GBP/USD 1.4411 -0.01% USD/JPY 109.4650 -0.03%
Thursday, May 19, 2016
End The Fed; Hawkish Tone Sends Dow Below Key Level; Gold, Silver Mercilessly Hammered
While it may seem nothing but a triviality, Money Daily has been following the most recent renge on the Dow Jones Industrial Average (DJIA) as it bounced its way between 17,500 and 18,000 since mid-March.
Today, the most widely-watched equity index in the world crossed below the lower end of that range, exclusively due to hawkish jawboning from various Federal Reserve operatives, who have spent the better part of the last seven years engaged in radical interest rate and money-creation policies, putting the entire global finacial system at risk.
To the uninformed masses - those 90-plus percent of the adult population who doesn't care or isn't bright enough to comprehend the ramifications of a global central banking system - life goes on. A debt-ridden, over-taxed population in the developed world plays giddily along as private banking interests push them one way or another. A few have escaped to off-the-grid lifestyles, some have prospered in the fiat money world of counterfeit currencies, but most are forced to take what is given, or rather, keep the small scraps the banks and governments leave on the floor after their orgy of inflation, deflation, false promises, fake data points and market mayhem and manipulation.
Thanks to the Fed and their fellow central bankers in Japan, Europe, and now China, the global population is left without price discovery mechanisms which make $30,000 cars with seven-year payment plans sound "affordable", homes which have skyrocketed in value due to artificially-low mortgage rates, fuel prices that are anything but transparent and/or stable and a general climate that continues to be counter to general principles of economy and thrift.
The Fed (and their central banker brethren) is pernicious, malevolent, deceitful, dishonest, greedy and carnivorous. They seek nothing but complete dominance without competition, a monopoly on the medium of exchange. Governments are more than willing to accept their bribery and thievery in order to retain feigned positions of power, selling out their constituents with nary a care toward the ultimate consequences of their actions.
Mandated to enact policies that promote full employment and stable prices, the Fed openly does neither, or, at best, adheres to their promises only as occasion allows, in fact promoting an inflation rate of two percent per year, which is anything but stable for prices.
So intent is the Fed on controlling every last aspect of financial activity, that they have undermined the best open markets of the world, in bonds, stocks, commodities and anything else they can get their greedy hands upon.
Markets no longer move on supply and demand or fundamental forces, but are solely and completely tethered to proclamations and idle talk of agents of the Federal Reserve, the Bank of Japan (BOJ), the People's Bank of China (PBOC), and the European Central Bank (ECB).
It's all rigged, all the time and readers are urged to do their own research into financial matters. Unless and until the fraud of banks and the agents of the Fed and other central banks are brought entirely to light there will be no financial freedom, only crony capitalism, fascist rhetoric and insane, unbalanced economic polices.
May the Farce Be With You:
S&P 500: 2,040.04, -7.59 (0.37%)
Dow: 17,435.40, -91.22 (0.52%)
NASDAQ: 4,712.53, -26.59 (0.56%)
Crude Oil 48.68 -0.20% Gold 1,255.70 -1.47% EUR/USD 1.1203 -0.12% 10-Yr Bond 1.85 -1.86% Corn 390.00 -2.38% Copper 2.07 -0.63% Silver 16.51 -3.63% Natural Gas 2.04 +1.75% Russell 2000 1,094.78 -0.74% VIX 16.33 +2.38% BATS 1000 20,677.17 0.00% GBP/USD 1.4609 +0.09% USD/JPY 109.9550 -0.20%
Today, the most widely-watched equity index in the world crossed below the lower end of that range, exclusively due to hawkish jawboning from various Federal Reserve operatives, who have spent the better part of the last seven years engaged in radical interest rate and money-creation policies, putting the entire global finacial system at risk.
To the uninformed masses - those 90-plus percent of the adult population who doesn't care or isn't bright enough to comprehend the ramifications of a global central banking system - life goes on. A debt-ridden, over-taxed population in the developed world plays giddily along as private banking interests push them one way or another. A few have escaped to off-the-grid lifestyles, some have prospered in the fiat money world of counterfeit currencies, but most are forced to take what is given, or rather, keep the small scraps the banks and governments leave on the floor after their orgy of inflation, deflation, false promises, fake data points and market mayhem and manipulation.
Thanks to the Fed and their fellow central bankers in Japan, Europe, and now China, the global population is left without price discovery mechanisms which make $30,000 cars with seven-year payment plans sound "affordable", homes which have skyrocketed in value due to artificially-low mortgage rates, fuel prices that are anything but transparent and/or stable and a general climate that continues to be counter to general principles of economy and thrift.
The Fed (and their central banker brethren) is pernicious, malevolent, deceitful, dishonest, greedy and carnivorous. They seek nothing but complete dominance without competition, a monopoly on the medium of exchange. Governments are more than willing to accept their bribery and thievery in order to retain feigned positions of power, selling out their constituents with nary a care toward the ultimate consequences of their actions.
Mandated to enact policies that promote full employment and stable prices, the Fed openly does neither, or, at best, adheres to their promises only as occasion allows, in fact promoting an inflation rate of two percent per year, which is anything but stable for prices.
So intent is the Fed on controlling every last aspect of financial activity, that they have undermined the best open markets of the world, in bonds, stocks, commodities and anything else they can get their greedy hands upon.
Markets no longer move on supply and demand or fundamental forces, but are solely and completely tethered to proclamations and idle talk of agents of the Federal Reserve, the Bank of Japan (BOJ), the People's Bank of China (PBOC), and the European Central Bank (ECB).
It's all rigged, all the time and readers are urged to do their own research into financial matters. Unless and until the fraud of banks and the agents of the Fed and other central banks are brought entirely to light there will be no financial freedom, only crony capitalism, fascist rhetoric and insane, unbalanced economic polices.
May the Farce Be With You:
S&P 500: 2,040.04, -7.59 (0.37%)
Dow: 17,435.40, -91.22 (0.52%)
NASDAQ: 4,712.53, -26.59 (0.56%)
Crude Oil 48.68 -0.20% Gold 1,255.70 -1.47% EUR/USD 1.1203 -0.12% 10-Yr Bond 1.85 -1.86% Corn 390.00 -2.38% Copper 2.07 -0.63% Silver 16.51 -3.63% Natural Gas 2.04 +1.75% Russell 2000 1,094.78 -0.74% VIX 16.33 +2.38% BATS 1000 20,677.17 0.00% GBP/USD 1.4609 +0.09% USD/JPY 109.9550 -0.20%
Wednesday, May 18, 2016
Fed Jawboning Flattens Stocks, Boosts Dollar, Sends Treasury Yields Soaring
Hearing all this Fed-speak, one might pine for the days of old, when central bankers were seen and not heard, when their meetings were the stuff of secrets and rituals and transparency was reserved for a type of adhesive tape.
The current roster of the federal reserve is a lineup of chattering old men and women more suited for a Sunday festival than the stuff of high finance.
Regardless of one's opinion of the federal reserve, one thing is certain: they have Wall Street on edge. With the release of the minutes from April's FOMC fiasco, the dollar surged - in the main against the yen and euro - stocks tanked back to break-even for the day and the 10-year note yield shot up like a rocket, ending the day at 1.88%, a move of nearly seven percent.
Oil and PMs fell, as planned. It's ridiculous.
S&P 500: 2,047.63, +0.42 (0.02%)
Dow: 17,526.62, -3.36 (0.02%)
NASDAQ: 4,739.12, +23.39 (0.50%)
Crude Oil 48.40 -1.20% Gold 1,259.50 -1.36% EUR/USD 1.1217 -0.84% 10-Yr Bond 1.88 +6.88% Corn 399.50 +0.63% Copper 2.06 -1.17% Silver 16.92 -1.88% Natural Gas 2.01 -2.05% Russell 2000 1,102.95 +0.48% VIX 15.95 +2.44% BATS 1000 20,677.17 0.00% GBP/USD 1.4597 +0.94% USD/JPY 110.1950 +0.96%
The current roster of the federal reserve is a lineup of chattering old men and women more suited for a Sunday festival than the stuff of high finance.
Regardless of one's opinion of the federal reserve, one thing is certain: they have Wall Street on edge. With the release of the minutes from April's FOMC fiasco, the dollar surged - in the main against the yen and euro - stocks tanked back to break-even for the day and the 10-year note yield shot up like a rocket, ending the day at 1.88%, a move of nearly seven percent.
Oil and PMs fell, as planned. It's ridiculous.
S&P 500: 2,047.63, +0.42 (0.02%)
Dow: 17,526.62, -3.36 (0.02%)
NASDAQ: 4,739.12, +23.39 (0.50%)
Crude Oil 48.40 -1.20% Gold 1,259.50 -1.36% EUR/USD 1.1217 -0.84% 10-Yr Bond 1.88 +6.88% Corn 399.50 +0.63% Copper 2.06 -1.17% Silver 16.92 -1.88% Natural Gas 2.01 -2.05% Russell 2000 1,102.95 +0.48% VIX 15.95 +2.44% BATS 1000 20,677.17 0.00% GBP/USD 1.4597 +0.94% USD/JPY 110.1950 +0.96%
Friday, May 13, 2016
Friday The 13th Sell-Off Nearly Breaks Through Downside Range On Dow Industrials
Yesterday, Money Daily extolled the virtues of ignoring intra-day movement on the major indices and pointed out that the last time the Dow Jones Industrial Average (DJIA) closed below the magic mark at 17,500, was nearly two months ago, on March 18 (17,481.89).
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
Tuesday, April 19, 2016
Silver Pops Above $17/oz.; Intel Slashes 11,000 Jobs; Markets Steady
...and the beat goes on.
How long will it take before the majority of traders realize they've been fed a pack of lies in non-GAAP earnings reports, loaded with non-recurring, one-time charges, which oddly keep cropping up every other quarter, and profits that are the result of stock buybacks (fewer shares equals higher EPS)?
For most, the answer is "too long." Since Wall Street can only make money if stocks appear to be good investments - and that concept is quickly fleeing the coop - and have the confidence of investors, the con game of lowered expectations and "beats" will keep the dancers dancing well past midnight and into the wee hours of the morning.
When the party does finally end, there are going to be a lot of long faces, hung-over losers and poor explanations for why the market simply didn't keep going up forever and ever and ever. Central bankers the world over will be falling over each other before that happens, though, because where goes Wall Street, so goes central bank - and thus, fiat money - credibility, and that must be maintained at all costs, which just might include printing trillions and trillions more dollars, euros and yen before the money finds its justifiable price, that being the cost of ink on paper, or, essentially, nothing.
So, when pensioners find their nest eggs shattered and barren, and are being told that the paper promises are not going to be honored, it will be too late for the masses.
Only those free of debt, with some reasonable amount of hard assets - land, building, machinery, tools, art, gemstones, silver, and gold - will be whole and beholding to nobody. The rest will have to fend for themselves and their families as best as they can.
It is against this backdrop that the recent rise in the value of silver becomes important. Gold's little brother has risen from an even $14/ounce to close today just under 17 dollars an ounce, making it the best-performing asset of the year, passing by gold in the process.
There are numerous reasons that silver has been set afire in recent days. Less than a week ago, Deustche Bank agreed to settle lawsuits claiming the bank had engaged in price manipulation of silver as well as gold. This admission really put the afterburners to an already hopped-up commodity. Gold has been slower to respond, likely because silver had been manipulated much lower for much longer.
Traditionally, silver had been valued in relation to gold at anywhere from 16 to 20 ounces of silver to one ounce of gold. Earlier this year, the gold:silver ratio screamed above 80, signifying that silver was likely undervalued by a magnitude of four. In other words, the true value of silver must come back to historical norms, either by the price of gold falling dramatically, or the price of silver rising astronomically (i.e., silver, at a 16:1 ratio to gold, would be selling for $78/ounce, with gold at $1250, where it currently resides).
What is a more plausible outcome is that - and this process could take several years, maybe as many as ten - both gold and silver will rise, though silver will rise at a much faster pace, eventually coming in line at 20:1 per ounce of gold. Both precious metals will see enormous advances in coming years as currencies depreciate and eventually die, paramount among them the Japanese Yen, the Euro, and the US Dollar, since the currencies of the most developed nations are also the most at risk, due to many factors, not the least of which being the excessive levels of debt held by the general public and government.
The Fed, the ECB and the BOJ will print to infinity, eventually bankrupting their counties and their currencies. Holders of gold and silver will be rewarded for both their vision and their patience.
The process has begun, but only those willing to hold an asset that offers no interest or rate of return, but also does not carry any counter-party risk, will prosper. Dollars, Yen and Euro will eventually devalue and finally default.
In the words of James Pierpont (J.P.) Morgan, spoken in 1912, a year before he helped launch the Federal Reserve:
Today's closing figures:
S&P 500: 2,100.80, +6.46 (0.31%)
Dow: 18,053.60, +49.44 (0.27%)
NASDAQ: 4,940.33, -19.69 (0.40%)
Crude Oil 42.46 +3.08% Gold 1,251.80 +1.36% EUR/USD 1.1359 +0.41% 10-Yr Bond 1.78 +0.56% Corn 383.50 +0.66% Copper 2.23 +2.84% Silver 16.96 +4.35% Natural Gas 2.09 +7.63% Russell 2000 1,140.23 +0.08% VIX 13.24 -0.82% BATS 1000 20,682.61 0.00% GBP/USD 1.4394 +0.82% USD/JPY 109.1975 +0.33%
How long will it take before the majority of traders realize they've been fed a pack of lies in non-GAAP earnings reports, loaded with non-recurring, one-time charges, which oddly keep cropping up every other quarter, and profits that are the result of stock buybacks (fewer shares equals higher EPS)?
For most, the answer is "too long." Since Wall Street can only make money if stocks appear to be good investments - and that concept is quickly fleeing the coop - and have the confidence of investors, the con game of lowered expectations and "beats" will keep the dancers dancing well past midnight and into the wee hours of the morning.
When the party does finally end, there are going to be a lot of long faces, hung-over losers and poor explanations for why the market simply didn't keep going up forever and ever and ever. Central bankers the world over will be falling over each other before that happens, though, because where goes Wall Street, so goes central bank - and thus, fiat money - credibility, and that must be maintained at all costs, which just might include printing trillions and trillions more dollars, euros and yen before the money finds its justifiable price, that being the cost of ink on paper, or, essentially, nothing.
So, when pensioners find their nest eggs shattered and barren, and are being told that the paper promises are not going to be honored, it will be too late for the masses.
Only those free of debt, with some reasonable amount of hard assets - land, building, machinery, tools, art, gemstones, silver, and gold - will be whole and beholding to nobody. The rest will have to fend for themselves and their families as best as they can.
It is against this backdrop that the recent rise in the value of silver becomes important. Gold's little brother has risen from an even $14/ounce to close today just under 17 dollars an ounce, making it the best-performing asset of the year, passing by gold in the process.
There are numerous reasons that silver has been set afire in recent days. Less than a week ago, Deustche Bank agreed to settle lawsuits claiming the bank had engaged in price manipulation of silver as well as gold. This admission really put the afterburners to an already hopped-up commodity. Gold has been slower to respond, likely because silver had been manipulated much lower for much longer.
Traditionally, silver had been valued in relation to gold at anywhere from 16 to 20 ounces of silver to one ounce of gold. Earlier this year, the gold:silver ratio screamed above 80, signifying that silver was likely undervalued by a magnitude of four. In other words, the true value of silver must come back to historical norms, either by the price of gold falling dramatically, or the price of silver rising astronomically (i.e., silver, at a 16:1 ratio to gold, would be selling for $78/ounce, with gold at $1250, where it currently resides).
What is a more plausible outcome is that - and this process could take several years, maybe as many as ten - both gold and silver will rise, though silver will rise at a much faster pace, eventually coming in line at 20:1 per ounce of gold. Both precious metals will see enormous advances in coming years as currencies depreciate and eventually die, paramount among them the Japanese Yen, the Euro, and the US Dollar, since the currencies of the most developed nations are also the most at risk, due to many factors, not the least of which being the excessive levels of debt held by the general public and government.
The Fed, the ECB and the BOJ will print to infinity, eventually bankrupting their counties and their currencies. Holders of gold and silver will be rewarded for both their vision and their patience.
The process has begun, but only those willing to hold an asset that offers no interest or rate of return, but also does not carry any counter-party risk, will prosper. Dollars, Yen and Euro will eventually devalue and finally default.
In the words of James Pierpont (J.P.) Morgan, spoken in 1912, a year before he helped launch the Federal Reserve:
Gold is Money. Everything Else is Credit.
Today's closing figures:
S&P 500: 2,100.80, +6.46 (0.31%)
Dow: 18,053.60, +49.44 (0.27%)
NASDAQ: 4,940.33, -19.69 (0.40%)
Crude Oil 42.46 +3.08% Gold 1,251.80 +1.36% EUR/USD 1.1359 +0.41% 10-Yr Bond 1.78 +0.56% Corn 383.50 +0.66% Copper 2.23 +2.84% Silver 16.96 +4.35% Natural Gas 2.09 +7.63% Russell 2000 1,140.23 +0.08% VIX 13.24 -0.82% BATS 1000 20,682.61 0.00% GBP/USD 1.4394 +0.82% USD/JPY 109.1975 +0.33%
Friday, April 15, 2016
It's TRUE: Crooked Deutsche Bank Agrees to Settle Silver/Gold Manipulation Lawsuits
Stocks zig-zagged their way through options expiry, drooping in the morning and early afternoon, but gaining a little ground in late trading, eventually closing marginally in the red, but strongly higher for the week.
The major indices had a banner week, with the averages closing higher for the seventh time in the last nine weeks. The Dow Jones Industrial Average has rocketed nearly 2500 points in just about two months of trading. It's an impressive run, though likely not to be sustainable. At the very least, it's all just paper, which can be blown away on a whim.
For the week:
Dow: +320.36 (1.82%)
S&P 500: +33.11 (1.62%)
NASDAQ: +87.53 (1.80%)
On the day:
S&P 500: 2,080.69, -2.09 (0.10%)
Dow: 17,897.25, -29.18 (0.16%)
NASDAQ: 4,938.22, -7.67 (0.16%)
Crude Oil 40.36 -2.75% Gold 1,235.90 +0.77% EUR/USD 1.1284 +0.18% 10-Yr Bond 1.75 -1.63% Corn 380.00 +1.60% Copper 2.15 -0.94% Silver 16.26 +0.57% Natural Gas 1.91 -3.25% Russell 2000 1,130.62 +0.18% VIX 13.84 +0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4198 +0.33% USD/JPY 108.7350 -0.66%
More important news follows...
While this news may be rather stunning to the average investor, those who don't own any silver and/or gold, Deutsche Bank agreed to settle litigation accusing it and other banks of manipulating the price of gold and silver, to the detriment of investors worldwide.
Terms were not disclosed, but this much we now know: banks are crooks, plain and simple. The world's largest banks have been found guilty of manipulating everything from mortgages to libor to interest rates to oil prices.
The sad part about this story is that while Deustche Bank will pay a fine (which will be a fraction of what they made by rigging the markets for themselves and friends), and is supposed to turn evidence on the other banks accused of collusion with them in the rigging, not a single trader or executive will face criminal charges.
Don't believe it? Try reading and going through the myrid links in this article posted on Zero Hedge.
That's why nobody trades in the stock market anymore, except for hedge funds, mutual and pension fund managers and others with inside information. It's all rigged, and it's been that way for a long time - maybe 20 years - but now it is worse than ever.
Money Daily has repeatedly warned that there hasn't been a mechanism for price discovery since the bank bailouts of 2009, and there sure aren't now. How much should you pay for a whole chicken? A used car? A house?
With markets routinely monopolized and manipulated by a criminal cartel, with the blessing of the world's central banks, how can anyone know what is fair value.
This is exactly why Money Daily often has little comment on markets or the commentary is decidedly of a negative tone. Markets are all rigged by players with a lot more money and information than the average investor. It's all a big con game. The only true stores of value are gold, silver and certain real estate, especially farm land. At least, when everything goes belly up, you can grow your own food and feed your family.
Good luck.
The major indices had a banner week, with the averages closing higher for the seventh time in the last nine weeks. The Dow Jones Industrial Average has rocketed nearly 2500 points in just about two months of trading. It's an impressive run, though likely not to be sustainable. At the very least, it's all just paper, which can be blown away on a whim.
For the week:
Dow: +320.36 (1.82%)
S&P 500: +33.11 (1.62%)
NASDAQ: +87.53 (1.80%)
On the day:
S&P 500: 2,080.69, -2.09 (0.10%)
Dow: 17,897.25, -29.18 (0.16%)
NASDAQ: 4,938.22, -7.67 (0.16%)
Crude Oil 40.36 -2.75% Gold 1,235.90 +0.77% EUR/USD 1.1284 +0.18% 10-Yr Bond 1.75 -1.63% Corn 380.00 +1.60% Copper 2.15 -0.94% Silver 16.26 +0.57% Natural Gas 1.91 -3.25% Russell 2000 1,130.62 +0.18% VIX 13.84 +0.87% BATS 1000 20,682.61 0.00% GBP/USD 1.4198 +0.33% USD/JPY 108.7350 -0.66%
More important news follows...
While this news may be rather stunning to the average investor, those who don't own any silver and/or gold, Deutsche Bank agreed to settle litigation accusing it and other banks of manipulating the price of gold and silver, to the detriment of investors worldwide.
Terms were not disclosed, but this much we now know: banks are crooks, plain and simple. The world's largest banks have been found guilty of manipulating everything from mortgages to libor to interest rates to oil prices.
The sad part about this story is that while Deustche Bank will pay a fine (which will be a fraction of what they made by rigging the markets for themselves and friends), and is supposed to turn evidence on the other banks accused of collusion with them in the rigging, not a single trader or executive will face criminal charges.
Don't believe it? Try reading and going through the myrid links in this article posted on Zero Hedge.
That's why nobody trades in the stock market anymore, except for hedge funds, mutual and pension fund managers and others with inside information. It's all rigged, and it's been that way for a long time - maybe 20 years - but now it is worse than ever.
Money Daily has repeatedly warned that there hasn't been a mechanism for price discovery since the bank bailouts of 2009, and there sure aren't now. How much should you pay for a whole chicken? A used car? A house?
With markets routinely monopolized and manipulated by a criminal cartel, with the blessing of the world's central banks, how can anyone know what is fair value.
This is exactly why Money Daily often has little comment on markets or the commentary is decidedly of a negative tone. Markets are all rigged by players with a lot more money and information than the average investor. It's all a big con game. The only true stores of value are gold, silver and certain real estate, especially farm land. At least, when everything goes belly up, you can grow your own food and feed your family.
Good luck.
Monday, April 4, 2016
April's Fools
Having been given the green light by Janet Yellen and her uber-dovish comments concerning the relaxed pace of interest rate increases, stocks closed Friday at their best levels of the year, erasing any nasty remembrances of the January and early February slump.
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
Monday brought the blues, a touch of reality, and maybe a case of buyer's remorse, as the major averages began the first full trading week of the month in a depressed vein.
Leading the charge to the downside was the usual culprit, crude oil, which slipped below $36/barrel on the current contract. The consistency of the oil slump can be attributed to a variety of causes, though the most obvious is slow or absent global economic growth. Major developed nations find themselves in a horrible bind due to limited opportunity for wage growth and slack demand for everything from farm equipment to fancy glasses.
While cheerleaders in the media are reluctant to mention any news which might be construed as even remotely negative, there is no mistaking the demographics of the developed world. Europe, Japan, and increasingly, the United States bear aging populations with no viable means of escape from the financial vortex of ultra-low interest rates except via the ultimate demise, death.
What the central banks and central planners of advanced economies have wrought with their ham-handed zero interest (and lower) environment is a world in which aging people without advancing incomes or prospects for opportunity have no viable means of protecting their savings. For those younger, saving is also crimped by these lower rates, pushing entire populations into risky, often leveraged investment schemes.
Economists have historical reference to ages marked by financial repression such as the current one, and they nearly always end in disaster, war, and a reordering of the global economic condition. Central banks desire inflation anywhere, while the population cries out for avenues for saving, putting the monetary system and the realities of life on a direct collision course.
The central banks must certainly know that there is nowhere out of this condition, but they are reluctant - indeed, they are violently opposed to the idea - to balance growth, productivity, wages and wealth creation. They have become the worst nightmare of the people, bent only toward risk in financial instruments, and against anything that might promote the general well-being. They have become the enemy of savers, anathema to the aging, and a net detraction from productive economies everywhere.
Perhaps it is all part of their plan, but, if it is, such a plan has been well-hidden because nobody with any amount of wealth or savings can see the wisdom of it. Unless stocks continue to rise in value forever - a distinct impossibility - humanity will be at the mercy of a small, useless band of monetarists who have not, as yet, propositioned any plan for the past seven years other than to cut interest rates and hope.
And we all know that hope is not a strategy.
S&P 500: 2,066.13, -6.65 (0.32%)
Dow: 17,737.00, -55.75 (0.31%)
NASDAQ: 4,891.80, -22.75 (0.46%)
Crude Oil 35.81 -2.66% Gold 1,216.90 -0.54% EUR/USD 1.1392 -0.02% 10-Yr Bond 1.78 -0.73% Corn 354.50 +0.14% Copper 2.14 -0.97% Silver 14.94 -0.74% Natural Gas 2.00 +2.45% Russell 2000 1,109.06 -0.77% VIX 14.17 +8.17% BATS 1000 20,682.61 0.00% GBP/USD 1.4264 +0.30% USD/JPY 111.3450 -0.28%
Monday, March 28, 2016
Provable Nixed Markets: VIX or Natural Gas, Take Your Pick
Noting that markets are in a near-trance module of late (thank you, Janet Yellen and central bankers everywhere), it has occurred to financial followers that possibly one could track the big movers of the day in an effort to ferret out any semblance of a pattern in the current conundrum.
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
With that, taken from the list below are the (un)usual suspects, the venerable VIX, which moved up by 3.39% on the session, and natty natural gas, ahead by 2.71%.
Actually, these moves tells nobody nothing (or, perhaps, everybody everything they need to know), since the VIX, a supposed measure of volatility, moved in such a manner as to suggest, well, volatility, when none existed.
As for natural gas, the price alone dictates large moves in percentage terms. With the price generally below two dollars for the past two years, a twenty-cent move is automatically good for 10%. Thus, today's gain of 2.71% was the result of a price move of roughly five cents. So, just because it is expected to be a little cooler than normal in Nashua, NH, next week, it does not automatically imply that the price of natural gas will be necessarily higher, nor does it mean that the price will stay there for any reasonable expectation of time.
Thus, the discovery du jour isn't so much based on any magic or even logical formula, but simple understanding of markets and central bank control through various proxies: markets are in a semi-permanent state of broken, and there's little any concerted effort by any group of individuals, investors, or fund managers can do about it. A volatility index moves when there is no volatility present, and a five-cent move in the price of natural gas won't set the commodity world afire.
In just a few words, these are not real markets, and you only need to have your eyes open to realize that.
Today's Laughable, Lamentable Louse:
S&P 500: 2,037.05, +1.11 (0.05%)
Dow: 17,535.39, +19.66 (0.11%)
NASDAQ: 4,766.79, -6.72 (0.14%)
Crude Oil 39.39 -0.18% Gold 1,220.10 -0.12% EUR/USD 1.1196 +0.28% 10-Yr Bond 1.87 -1.58% Corn 371.25 +0.34% Copper 2.24 +0.63% Silver 15.20 +0.01% Natural Gas 1.93 +2.71% Russell 2000 1,080.23 +0.06% VIX 15.24 +3.39% BATS 1000 20,682.61 0.00% GBP/USD 1.4255 +0.92% USD/JPY 113.3830 +0.08%
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