For months, if not years, Federal Reserve officials have been harping on the absence of inflation during their era of unrelenting quantitative easing (money printing). This phenomenon has baffled the pointed heads of the Fed, since it would be only natural for prices to rise with the advent of scads of fresh money hitting the market.
The problem for the Fed is simple. Their transmission lines have been blunted for the past eight years, with their easy money stopped at the bank level, never actually reaching commercial or consumer participants in the general economy. Thus, stocks, bonds and various currencies have experienced outsize gains - those assets experiencing above average appreciation, i.e., inflation - while the more mundane elements of the vast economic landscape have wallowed in a regime of low inflation, disinflation or outright deflation.
As the Fed prepares to sell off assets from its enormous ($4.4 trillion) balance sheet, the matter of price inflation has once again become a major concern. Fed officials disingenuously mutter on and about wage growth, seeking to convey the impression that they are somehow concerned for the welfare of workers (labor). Wage growth, which has stagnated since the year 1999 if not earlier, is a false argument for inflation. what the Fed wants is price inflation for everyday goods, commercial mid-production products, and base goods.
It's not happening.
In his magnificent tome, "The Wealth of Nations," author Adam Smith takes pains - and many pages - in discussion of nominal prices, concerning himself in his writings with the price of corn. Scholars rightfully insist that Smaith's intention was to show how prices in base goods are more important a measurement of economic health than pricing in currency.
With that knowledge, variations in currencies and base grains - wheat, corn, rice - can serve as an impressive measurement of real inflation, since the cost of producing marketable grain from hectares of farm land is somewhat non-variable, considering that the labor and fuel costs are relatively static.
In other words, since farmers are paying their hired hands roughly the same wage and the cost of operating the machinery to harvest the grains is also somewhat static, the price of finished grain in terms of currencies of choice - in his case, silver, can determine whether the environment is inflationary, deflationary, or neutral.
This morning's release of PPI data showed an increase of 0.4% month-over-month and a rate of 2.6% year-over-year. The increase puts the PPI at a level last seen in 2012. CPI (Consumer Price Index) remains mired in mediocrity, at a rate of 1.9% annually. That is the final inflation number, though it is hardly a reliable one.
Since the US economy is so vast and dynamic, it's difficult to get a grip on the overall flow of anything, though it's fairly certain that the inflation rate is higher than what the government is reporting.
On the other hand, taking into account Adam Smith's famous measurements, grains - the basis for much of what Americans and animals of husbandry eat - have crashed in recent weeks and months, along with silver, which has been rangebound for the past four years and is thus a benign measurement, useful in actual discussions of nominal prices.
On that basis, the Fed is likely to be disappointed in their inflation expectations. Since their data is so badly maligned, it cannot be trusted, while Adam Smith's has stood the tests of time.
It's deflation, as far as the eye can see, no matter what the Federal Reserve officials - who have proven, time and again, to be nothing more than dunces with degrees - try to squeeze out of the economy. The deflation is especially evident considering the levels of price suppression in silver. Were silver to rise to somewhat more realistic levels, the cost of buying a bushel or wheat or corn or rice would fall substantially.
Stocks made new all-time highs on Wednesday, but are pulling back in early trading Thursday morning.
Showing posts with label corn. Show all posts
Showing posts with label corn. Show all posts
Thursday, October 12, 2017
Monday, February 3, 2014
Wall Street Has a Problem, So Everybody Will Suffer; Stocks Smashed on Yellen's 1st Day
Fed Chairwoman, Janet Yellen, is just about to head home from her first day as head of the US Federal Reserve System. Judging by what happened on Wall Street, she's probably not going to cook herself a wholesome meal, but rather will order out, Chinese the most likely choice.
Stocks went absolutely South on the first day of February, largely in response to the Fed's decision to continue their asset purchase tapering, but moreso on US and China economic weakness.
China's PMI for January edged down to 50.5, the lowest level in six months, not exactly the kind of news Ms. Yellen was seeking. Making matters worse for the new Fed head, US ISM fell from 56.5 to 51.3, sending stocks, already down on the session, into a tailspin after their release at 10:00 am ET.
The lethal combination of the Fed cutting back on bond purchases, in the face of weakening data from the world's two largest economies, set the stage for a massive selloff on Wall Street and a flight to the safety of US treasury bonds, which closed at their lowest yield level - on the benchmark 10-year note - in three months.
The carnage on Wall Street was not isolated to just today, however. Stocks have been performing poorly all year, and the level of fear is perceptibly rising, with the Dow, NASDAQ and S&P 500 all closing down more than 2%, after the Nikkei fell 295 points and officially into a correction, down 10% off the recent highs.
The losses on Wall Street were monumental. For the Dow, it was the worst start to a month since 1982; for the NASDAQ, the losses were the worst since the inception of the index (1972).
Auto sales were down for January, with weather blamed for sluggish sales. Bond funds saw 20-30 time normal volume of inflows. The VIX has gone from the mid-12s to over 21 in a month, a 70%-plus rise in risk perception. Not only were stocks down, but volume was large, and has been throughout the slide which began in January.
The reaction in bond markets - sending the 10-year down to a yield of 2.58% - was perfectly rational. As risk assets (stocks) deteriorate, safety is sought, and there's nothing safer than US treasuries, or, maybe, German bunds, also lower during the past month and today.
Looking forward, Ms. Yellen should have expected this, or worse. After all, history tells us that all new Fed chairs inherit crises. as did Volker, Greenspan and Bernanke before her. Surely, the shared wisdom of decades of Federal Reserve actions will guide Ms. Yellen to a logical solution, stopping the slide in stocks while keeping the US economy growing.
Or will it?
Yellen is trapped. QE tapering is already the de facto standard policy. To reverse it would be to admit defeat, and possibly undermine any confidence left in the institution of the Federal Reserve, which, admittedly, isn't much. The true solution is for the Fed to stand back, watch the markets deteriorate, witness the destruction of the US and global economy over the near term and hope that people, individuals and businesses, will have enough of their wits remaining to muddle through a few years of truly hard times.
The Fed has no choice. Interest rates are already at zero and QE has had limited effect. It's time for the Fed to turn its back on the economy and the markets and let chips fall where they may. Any other action will only result in more asset dislocations, of which there are already too many.
For those of us who are not heavily invested in stocks (that leaves out anybody depending upon a pension, either now or in the future), SHORT AT WILL. This downward thrust will eventually manifest itself into a correction (the Dow is less than 500 points from it) and, by May or June or July, at the latest, a fully-blown bear market.
Bull markets do not last forever, and this current bull, which began in March, 2009, has reached its end. If proof is needed, check the highs on the indices from December and see how long it takes to get back to those levels. A reasonable guess, at this juncture, would be seven to ten years, maybe as long as 20.
The globalization experiment, as it always does, is failing. Economies must begin to fend for themselves and become more localized. Faith in Wall Street, which took a severe blow in 2008-09, will lose all credibility in coming months. Already, there are hordes of individuals who do not trust the wizards of Wall Street, as it was in the 1930s, during the Great Depression.
Wall Street will not respond well. Stocks will fall. Bond yields and mortgages will be even lower than in recent years. While those who have bought into the system - government employees, pensioners of many stripes, plain idiots and "investors" - will suffer, the prudent, the goldbugs, silverbugs and savers will eventually be rewarded for their patience and their frugality.
Put one's faith not in the data and derivatives of Wall Street, but in the strength of individuals, work ethic and survivability. That's a trade which has stood the test of time.
Note to Dan K (who may or may not be interested), and Adam Smith theorists, corn was up 0.40% today; silver gained 1.51%. Deflation.
DOW 15,372.80, -326.05 (-2.08%)
NASDAQ 3,996.96, -106.92 (-2.61%)
S&P 1,741.89, -40.70 (-2.28%)
10-Yr Note 101.48, +1.21 (+1.21%) Yield: 2.58%
NASDAQ Volume 2.41 Bil
NYSE Volume 4.72 Bil
Combined NYSE & NASDAQ Advance - Decline: 839-4976 (extreme)
Combined NYSE & NASDAQ New highs - New lows: 83-197 (trending)
WTI crude oil: 96.43, -1.06
Gold: 1,259.90, +20.10
Silver: 19.41, +0.289
Corn: 435.75, +1.75
Stocks went absolutely South on the first day of February, largely in response to the Fed's decision to continue their asset purchase tapering, but moreso on US and China economic weakness.
China's PMI for January edged down to 50.5, the lowest level in six months, not exactly the kind of news Ms. Yellen was seeking. Making matters worse for the new Fed head, US ISM fell from 56.5 to 51.3, sending stocks, already down on the session, into a tailspin after their release at 10:00 am ET.
The lethal combination of the Fed cutting back on bond purchases, in the face of weakening data from the world's two largest economies, set the stage for a massive selloff on Wall Street and a flight to the safety of US treasury bonds, which closed at their lowest yield level - on the benchmark 10-year note - in three months.
The carnage on Wall Street was not isolated to just today, however. Stocks have been performing poorly all year, and the level of fear is perceptibly rising, with the Dow, NASDAQ and S&P 500 all closing down more than 2%, after the Nikkei fell 295 points and officially into a correction, down 10% off the recent highs.
The losses on Wall Street were monumental. For the Dow, it was the worst start to a month since 1982; for the NASDAQ, the losses were the worst since the inception of the index (1972).
Auto sales were down for January, with weather blamed for sluggish sales. Bond funds saw 20-30 time normal volume of inflows. The VIX has gone from the mid-12s to over 21 in a month, a 70%-plus rise in risk perception. Not only were stocks down, but volume was large, and has been throughout the slide which began in January.
The reaction in bond markets - sending the 10-year down to a yield of 2.58% - was perfectly rational. As risk assets (stocks) deteriorate, safety is sought, and there's nothing safer than US treasuries, or, maybe, German bunds, also lower during the past month and today.
Looking forward, Ms. Yellen should have expected this, or worse. After all, history tells us that all new Fed chairs inherit crises. as did Volker, Greenspan and Bernanke before her. Surely, the shared wisdom of decades of Federal Reserve actions will guide Ms. Yellen to a logical solution, stopping the slide in stocks while keeping the US economy growing.
Or will it?
Yellen is trapped. QE tapering is already the de facto standard policy. To reverse it would be to admit defeat, and possibly undermine any confidence left in the institution of the Federal Reserve, which, admittedly, isn't much. The true solution is for the Fed to stand back, watch the markets deteriorate, witness the destruction of the US and global economy over the near term and hope that people, individuals and businesses, will have enough of their wits remaining to muddle through a few years of truly hard times.
The Fed has no choice. Interest rates are already at zero and QE has had limited effect. It's time for the Fed to turn its back on the economy and the markets and let chips fall where they may. Any other action will only result in more asset dislocations, of which there are already too many.
For those of us who are not heavily invested in stocks (that leaves out anybody depending upon a pension, either now or in the future), SHORT AT WILL. This downward thrust will eventually manifest itself into a correction (the Dow is less than 500 points from it) and, by May or June or July, at the latest, a fully-blown bear market.
Bull markets do not last forever, and this current bull, which began in March, 2009, has reached its end. If proof is needed, check the highs on the indices from December and see how long it takes to get back to those levels. A reasonable guess, at this juncture, would be seven to ten years, maybe as long as 20.
The globalization experiment, as it always does, is failing. Economies must begin to fend for themselves and become more localized. Faith in Wall Street, which took a severe blow in 2008-09, will lose all credibility in coming months. Already, there are hordes of individuals who do not trust the wizards of Wall Street, as it was in the 1930s, during the Great Depression.
Wall Street will not respond well. Stocks will fall. Bond yields and mortgages will be even lower than in recent years. While those who have bought into the system - government employees, pensioners of many stripes, plain idiots and "investors" - will suffer, the prudent, the goldbugs, silverbugs and savers will eventually be rewarded for their patience and their frugality.
Put one's faith not in the data and derivatives of Wall Street, but in the strength of individuals, work ethic and survivability. That's a trade which has stood the test of time.
Note to Dan K (who may or may not be interested), and Adam Smith theorists, corn was up 0.40% today; silver gained 1.51%. Deflation.
DOW 15,372.80, -326.05 (-2.08%)
NASDAQ 3,996.96, -106.92 (-2.61%)
S&P 1,741.89, -40.70 (-2.28%)
10-Yr Note 101.48, +1.21 (+1.21%) Yield: 2.58%
NASDAQ Volume 2.41 Bil
NYSE Volume 4.72 Bil
Combined NYSE & NASDAQ Advance - Decline: 839-4976 (extreme)
Combined NYSE & NASDAQ New highs - New lows: 83-197 (trending)
WTI crude oil: 96.43, -1.06
Gold: 1,259.90, +20.10
Silver: 19.41, +0.289
Corn: 435.75, +1.75
Thursday, October 24, 2013
What We Said Tuesday Was Right; Corn Near 1-Year Lows
On Tuesday, Money Daily opined that there would be 100-point daily gains on the Dow for no apparent reason on a regular basis for the foreseeable future.
Today, no news, no rationale, BINGO, a 95-point gain. We'll take it.
Just keep buying, take gains as they come and don't get caught in the wake when the tidal wave of defaults comes, which eventually must occur, as the dollar declines.
Turn your paper profits into hard assets - things you can use or that have lasting function and/or value: land, gold, silver, machinery, fuel, transportation, guns, ammo, food, not necessarily in that order.
Dow 15,509.21, +95.88 (0.62%)
Nasdaq 3,928.96, +21.89 (0.56%)
S&P 500 1,752.07, +5.69 (0.33%)
10-Yr Bond 2.52%, +0.04
NYSE Volume 3,564,373,500
Nasdaq Volume 1,928,785,500
Combined NYSE & NASDAQ Advance - Decline: 3327-2278
Combined NYSE & NASDAQ New highs - New lows: 440-25 (THIS is NOT normal)
WTI crude oil: 97.11, +0.25
Gold: 1,350.30, +16.30
Silver: 22.82, +0.205
Corn: 440.25, -2.50
Today, no news, no rationale, BINGO, a 95-point gain. We'll take it.
Just keep buying, take gains as they come and don't get caught in the wake when the tidal wave of defaults comes, which eventually must occur, as the dollar declines.
Turn your paper profits into hard assets - things you can use or that have lasting function and/or value: land, gold, silver, machinery, fuel, transportation, guns, ammo, food, not necessarily in that order.
Dow 15,509.21, +95.88 (0.62%)
Nasdaq 3,928.96, +21.89 (0.56%)
S&P 500 1,752.07, +5.69 (0.33%)
10-Yr Bond 2.52%, +0.04
NYSE Volume 3,564,373,500
Nasdaq Volume 1,928,785,500
Combined NYSE & NASDAQ Advance - Decline: 3327-2278
Combined NYSE & NASDAQ New highs - New lows: 440-25 (THIS is NOT normal)
WTI crude oil: 97.11, +0.25
Gold: 1,350.30, +16.30
Silver: 22.82, +0.205
Corn: 440.25, -2.50
Monday, April 15, 2013
Stocks Globally Down, US Stocks Worst Session of Year; Bomb Blasts In Boston; Tax Day, Y'all
Well, I was going to take the day off in celebration of doing my income taxes for the 40th time, but, sure enough, events seem to be overtaking my expected holiday.
First, EVERYTHING WENT DOWN TODAY. From Asian markets, european markets, US and South American markets, gold, oil, silver, corn, wheat... everything.
The fact that the world is entering the second stage of the depression will be obscured by the explosions near the finish line of the Boston marathon which occurred about 3:15 pm EDT.
The nightly news will be all over the explosions and may give 30 seconds to the facts that gold fell by the most amount EVER in one day (probably the same with silver), and US markets had their worst sessions of 2013.
Already, CNBC has pre-empted their normal coverage will wall-to-wall coverage of the Boston blasts.
And, so it goes, we get 9/11 and September, 2008, all rolled into one.
You are welcome to draw your own conclusions. I'm taking the rest of the day off. When more normalcy returns (tomorrow), I'll post a complete column on what all this might mean.
Dow 14,599.20, -265.86 (1.79%)
Nasdaq 3,216.49, -78.46 (2.38%)
S&P 500 1,552.36, -36.49 (2.30%)
10-Yr Bond 1.70% -0.02
NYSE Volume 5,244,061,000
Nasdaq Volume 1,776,598,375
Combined NYSE & NASDAQ Advance - Decline: 868-5689
Combined NYSE & NASDAQ New highs - New lows: 142-137
WTI crude oil: 88.31, -2.98
Gold: 1,357.50, -143.90
Silver: 22.92, -3.41
First, EVERYTHING WENT DOWN TODAY. From Asian markets, european markets, US and South American markets, gold, oil, silver, corn, wheat... everything.
The fact that the world is entering the second stage of the depression will be obscured by the explosions near the finish line of the Boston marathon which occurred about 3:15 pm EDT.
The nightly news will be all over the explosions and may give 30 seconds to the facts that gold fell by the most amount EVER in one day (probably the same with silver), and US markets had their worst sessions of 2013.
Already, CNBC has pre-empted their normal coverage will wall-to-wall coverage of the Boston blasts.
And, so it goes, we get 9/11 and September, 2008, all rolled into one.
You are welcome to draw your own conclusions. I'm taking the rest of the day off. When more normalcy returns (tomorrow), I'll post a complete column on what all this might mean.
Dow 14,599.20, -265.86 (1.79%)
Nasdaq 3,216.49, -78.46 (2.38%)
S&P 500 1,552.36, -36.49 (2.30%)
10-Yr Bond 1.70% -0.02
NYSE Volume 5,244,061,000
Nasdaq Volume 1,776,598,375
Combined NYSE & NASDAQ Advance - Decline: 868-5689
Combined NYSE & NASDAQ New highs - New lows: 142-137
WTI crude oil: 88.31, -2.98
Gold: 1,357.50, -143.90
Silver: 22.92, -3.41
Wednesday, April 3, 2013
Something's Up... and it's Not the Stock Market
Intuition is vastly underrated by the scientific or technological community.
Understanding that the twinge of doubt or "gut feeling" is more than just an emotional reaction but in reality a hot process of accumulated experiences - some deeply-rooted and ancestral, others from immediate life experience - raises the process of intuitive thinking to a better standing, one that can assimilate data in microseconds and respond with appropriate action.
It's something along the lines of survival instinct in animals, who will move quickly at the rustling of leaves or changes in the flow of a stream. Humans, plugged into cell phones, iPods and a dizzying array of self-created distractions often don't have access to their own intuitiveness in the way other creatures do, but, sometimes, the clues are just too obvious to miss.
Such was the case with today's market action.
First, the ADP employment report for March, released prior to the opening bell, offered the second of three straight data point this week that was of a negative nature. The creation of 158,000 new jobs in the month was well short of the anticipated 197,000, and a precursor to Friday's "all-important" Non-farm payroll data from the BLS.
The other two data points on the negative side were the drop in the ISM index on Monday and the ISM Services index drop at 10:00 am EDT, that showed a slowdown to 54.4 from 56.0 in February.
Those were the catalysts to some pretty serious selling in equities, but also in gold, silver, oil, copper, corn, financial stocks, and a boost in bonds that sent yields lower, a trend that seems to be quite well-entrenched of late.
By midday, it was fairly obvious that everything was falling at the same time, which is not normal. On top of the usual market issues, the North Korean nut case keeps ramping up the rhetoric - the US responding with ongoing escalation - and the vision of depositor funds being vanished from bank accounts in Cyprus still fresh, the notion that things were fast unraveling was hard to miss.
Analysts of various stripes have been warning about a downturn in the markets for weeks, if not months, and the 100+ point decline on the Dow may serve notice that the top is in and everything from here to October (if we're lucky) is going to be downhill. The more obvious evidence comes in the form of the crumbling US economy, boosted with easy money, welfare checks, food stamps, disability payments and other government transfer payments that still cannot produce a GDP growing at faster than a two percent clip.
All the evidence is out there, in front of everyone's eyes, but it seemed that only today, the buzz-heads and stock jocks in equity la-la-land finally took the bait and took a big chunk out of the normalcy bias that pervades trading desks and the floors of the exchanges.
There was actual fear in the air, rather than the usual blather that the "Fed has our back," that has been conventional wisdom for the past four-plus years.
In effect, it's the Fed that has caused, in large part, the continuum of crisis that continues unabated, their easy money policies creating distortions of immense proportions, so that almost everything is mis-priced, mis-allocated and misinterpreted, the result being one massive, global mistake of monetary mismanagement that threatens the entire financial and social fabric of the planet.
It didn't take a genius to figure all of this out, just a feeling, that when everything began falling, the tumbling would not stop, the last time this happened (our minds reeling and whirring like the great analytical tools they are) was September of 2008, when Lehman Brothers was about to go under and the world changed - not for the better.
Mark this date, because it may be one for the history books, noted as the beginning of the end, when the tsunami of financial events, forestalled since the extraordinary measures of the Fed and other central banks in 2008-09, finally came rushing onshore, all at the same time, with a force and a fury that's been building since those well-embraced days of Hank Paulson putting a $700 billion gun to the head of the government and threatening to pull the trigger.
We may have weathered the storm of the past four years, but the backlash may be even worse, and it's coming faster than most people can anticipate or prepare for.
It's a funny thing about predicting disasters. You're humored or ignored or laughed at all the way up to the actual event. And then, people ask you what to do, when you've been telling them just that, all along.
Stocks may be up again tomorrow, or for the next week or month, even, but there's trouble coming, you can just feel it.
Dow 14,550.35, 111.66 (0.76%)
NASDAQ 3,218.60, -36.26 (1.11%)
S&P 500 1,553.69, -16.56 (1.05%)
NYSE Composite 8,983.40, -109.50 (1.20%)
NASDAQ Volume 1,813,335,250
NYSE Volume 4,418,003,000
Combined NYSE & NASDAQ Advance - Decline: 1499-4977 (huge)
Combined NYSE & NASDAQ New highs - New lows: 182-92 (tighter)
WTI crude oil: 94.45, -2.74
Gold: 1,553.50, -22.40
Silver: 26.80, -0.451
Understanding that the twinge of doubt or "gut feeling" is more than just an emotional reaction but in reality a hot process of accumulated experiences - some deeply-rooted and ancestral, others from immediate life experience - raises the process of intuitive thinking to a better standing, one that can assimilate data in microseconds and respond with appropriate action.
It's something along the lines of survival instinct in animals, who will move quickly at the rustling of leaves or changes in the flow of a stream. Humans, plugged into cell phones, iPods and a dizzying array of self-created distractions often don't have access to their own intuitiveness in the way other creatures do, but, sometimes, the clues are just too obvious to miss.
Such was the case with today's market action.
First, the ADP employment report for March, released prior to the opening bell, offered the second of three straight data point this week that was of a negative nature. The creation of 158,000 new jobs in the month was well short of the anticipated 197,000, and a precursor to Friday's "all-important" Non-farm payroll data from the BLS.
The other two data points on the negative side were the drop in the ISM index on Monday and the ISM Services index drop at 10:00 am EDT, that showed a slowdown to 54.4 from 56.0 in February.
Those were the catalysts to some pretty serious selling in equities, but also in gold, silver, oil, copper, corn, financial stocks, and a boost in bonds that sent yields lower, a trend that seems to be quite well-entrenched of late.
By midday, it was fairly obvious that everything was falling at the same time, which is not normal. On top of the usual market issues, the North Korean nut case keeps ramping up the rhetoric - the US responding with ongoing escalation - and the vision of depositor funds being vanished from bank accounts in Cyprus still fresh, the notion that things were fast unraveling was hard to miss.
Analysts of various stripes have been warning about a downturn in the markets for weeks, if not months, and the 100+ point decline on the Dow may serve notice that the top is in and everything from here to October (if we're lucky) is going to be downhill. The more obvious evidence comes in the form of the crumbling US economy, boosted with easy money, welfare checks, food stamps, disability payments and other government transfer payments that still cannot produce a GDP growing at faster than a two percent clip.
All the evidence is out there, in front of everyone's eyes, but it seemed that only today, the buzz-heads and stock jocks in equity la-la-land finally took the bait and took a big chunk out of the normalcy bias that pervades trading desks and the floors of the exchanges.
There was actual fear in the air, rather than the usual blather that the "Fed has our back," that has been conventional wisdom for the past four-plus years.
In effect, it's the Fed that has caused, in large part, the continuum of crisis that continues unabated, their easy money policies creating distortions of immense proportions, so that almost everything is mis-priced, mis-allocated and misinterpreted, the result being one massive, global mistake of monetary mismanagement that threatens the entire financial and social fabric of the planet.
It didn't take a genius to figure all of this out, just a feeling, that when everything began falling, the tumbling would not stop, the last time this happened (our minds reeling and whirring like the great analytical tools they are) was September of 2008, when Lehman Brothers was about to go under and the world changed - not for the better.
Mark this date, because it may be one for the history books, noted as the beginning of the end, when the tsunami of financial events, forestalled since the extraordinary measures of the Fed and other central banks in 2008-09, finally came rushing onshore, all at the same time, with a force and a fury that's been building since those well-embraced days of Hank Paulson putting a $700 billion gun to the head of the government and threatening to pull the trigger.
We may have weathered the storm of the past four years, but the backlash may be even worse, and it's coming faster than most people can anticipate or prepare for.
It's a funny thing about predicting disasters. You're humored or ignored or laughed at all the way up to the actual event. And then, people ask you what to do, when you've been telling them just that, all along.
Stocks may be up again tomorrow, or for the next week or month, even, but there's trouble coming, you can just feel it.
Dow 14,550.35, 111.66 (0.76%)
NASDAQ 3,218.60, -36.26 (1.11%)
S&P 500 1,553.69, -16.56 (1.05%)
NYSE Composite 8,983.40, -109.50 (1.20%)
NASDAQ Volume 1,813,335,250
NYSE Volume 4,418,003,000
Combined NYSE & NASDAQ Advance - Decline: 1499-4977 (huge)
Combined NYSE & NASDAQ New highs - New lows: 182-92 (tighter)
WTI crude oil: 94.45, -2.74
Gold: 1,553.50, -22.40
Silver: 26.80, -0.451
Tuesday, October 2, 2012
Moody Market Seeks Direction; Farm Notes: Keeping Good Faith
Wandering aimlessly through the session, US indices could not decide to rise or fall on Tuesday, ending the session in split fashion.
Gaining in the morning and finally relenting by midday, stocks hit their lows of the session between 2:00 and 3:00 pm EDT, but gathered momentum into the close, paring losses and, in most cases, turning slightly positive.
The Dow was the only index to suffer a loss, a sharp reversal from Monday, upon which the Industrials held the best percentage gain among the major indices.
Volume was fairly anemic, though that's nothing unusual, and while many are calling the recent moves a "stealth rally" the effects of monetary policy, particularly the Fed's recently-announced purchase of some $80 billion per month in MBS for an unspecified period (AKA QEternity) have been felt, possibly having been already priced into stocks, some of which continue to trade at nose-bleed levels, the past few weeks of have been anything other than a secret and almost certainly not a rally.
Since QEternity was announced as policy on September 13, the major indices have been substantially flat.
Of course, this being October and a presidential election year, all of this could change if the market suddenly finds a catalyst for a move in either direction. On the other hand, the market ostensibly controlled by a small number of "strong hands," listlessness and directionless trading could be continued through the election and beyond. As the brokerage commercials are quick to point out, stocks cary risk.
Farming Note: In the rural outliers where corn and chickens are more important than stocks and bonds, a person's word is generally regarded as oath, at least until it is found to be untrue.
It's not a good idea to make promises and plans with potential partners or acquaintances only to dummy up some feeble excuse whereby to break an agreement. Word spreads quickly in farm country about one's character and eventually, those whose word is found not to be trustworthy, soon find themselves cast away, a pariah of the community.
Besides being the golden rule to "do unto others as you would have them do unto you," not keeping good faith ruins friendships, destroys one's self-confidence and generally puts one at odds with Mother Nature herself, a condition reserved only for the truly wicked and those who would scheme against one's fellow man or woman in pursuit of one's own fortune.
Rain may fall when unwanted, drought may starve crops at other times, but only the fruitlessness of one's own hand can cause one's own demise. The harmed party or parties may seek lawful restitution if one's word is a written contract, though more often the result is that the harmed party finds a better deal with a competitor, and the perpetrator of deceit is brought down by guilt and shame.
Dow 13,482.36, -32.75 (0.24%)
NASDAQ 3,120.04, +6.51 (0.21%)
S&P 500 1,445.75, +1.26 (0.09%)
NYSE Compos... 8,295.11, +10.74 (0.13%)
NASDAQ Volume 1,617,743,250
NYSE Volume 3,275,690,000
Combined NYSE & NASDAQ Advance - Decline: 2859-2592
Combined NYSE & NASDAQ New highs - New lows: 247-44
WTI crude oil: 91.89, -0.59
Gold: 1,775.60, -7.70
Silver: 34.67, -0.283
Gaining in the morning and finally relenting by midday, stocks hit their lows of the session between 2:00 and 3:00 pm EDT, but gathered momentum into the close, paring losses and, in most cases, turning slightly positive.
The Dow was the only index to suffer a loss, a sharp reversal from Monday, upon which the Industrials held the best percentage gain among the major indices.
Volume was fairly anemic, though that's nothing unusual, and while many are calling the recent moves a "stealth rally" the effects of monetary policy, particularly the Fed's recently-announced purchase of some $80 billion per month in MBS for an unspecified period (AKA QEternity) have been felt, possibly having been already priced into stocks, some of which continue to trade at nose-bleed levels, the past few weeks of have been anything other than a secret and almost certainly not a rally.
Since QEternity was announced as policy on September 13, the major indices have been substantially flat.
Of course, this being October and a presidential election year, all of this could change if the market suddenly finds a catalyst for a move in either direction. On the other hand, the market ostensibly controlled by a small number of "strong hands," listlessness and directionless trading could be continued through the election and beyond. As the brokerage commercials are quick to point out, stocks cary risk.
Farming Note: In the rural outliers where corn and chickens are more important than stocks and bonds, a person's word is generally regarded as oath, at least until it is found to be untrue.
It's not a good idea to make promises and plans with potential partners or acquaintances only to dummy up some feeble excuse whereby to break an agreement. Word spreads quickly in farm country about one's character and eventually, those whose word is found not to be trustworthy, soon find themselves cast away, a pariah of the community.
Besides being the golden rule to "do unto others as you would have them do unto you," not keeping good faith ruins friendships, destroys one's self-confidence and generally puts one at odds with Mother Nature herself, a condition reserved only for the truly wicked and those who would scheme against one's fellow man or woman in pursuit of one's own fortune.
Rain may fall when unwanted, drought may starve crops at other times, but only the fruitlessness of one's own hand can cause one's own demise. The harmed party or parties may seek lawful restitution if one's word is a written contract, though more often the result is that the harmed party finds a better deal with a competitor, and the perpetrator of deceit is brought down by guilt and shame.
Dow 13,482.36, -32.75 (0.24%)
NASDAQ 3,120.04, +6.51 (0.21%)
S&P 500 1,445.75, +1.26 (0.09%)
NYSE Compos... 8,295.11, +10.74 (0.13%)
NASDAQ Volume 1,617,743,250
NYSE Volume 3,275,690,000
Combined NYSE & NASDAQ Advance - Decline: 2859-2592
Combined NYSE & NASDAQ New highs - New lows: 247-44
WTI crude oil: 91.89, -0.59
Gold: 1,775.60, -7.70
Silver: 34.67, -0.283
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