There's been an ongoing debate over whether there is a bond bubble and whether - and when - it will finally burst.
With the Fed carrying the water for the US Treasury to the tune of 40-45% of all new debt issuance there's abmple evidence that Chairman Bernanke and his henchmen and women have had the bubble-blowing pipes surgically implanted into their collective mouths. They've managed to keep all interest rates at historically-low, bargain basement prices for the past four years, though the net results of their efforts have been widely different depending upon one's perspective.
For the nation's largest banks, Fed largesse has meant easy money with which to rebuild their badly-damaged balance sheets after the real estate debacle which ended in the 2008 crash. This easy money has also inspired rampant speculation by those very same banks and has trickled down to hedge funds, the marginal buyer in this runaway stock market.
Whether the bond bubble will eventually burst is a matter of conjecture and even more speculation, though one can be relatively assured that if such a bubble exists and does burst, rates will escalate higher in a disorderly fashion which will make any previous stock market crash look like a summer picnic. In sum, higher interest rates would wreck the global economy. Everyone from the marginal student lender to the great sovereign nations of the world would be unable to service debt at higher - and rising - interest rates. Cue the oompah band from the days of the Weimar Republic.
Where there exists a bona fide, can't miss, no-doubt-about-it bubble is in stocks. Friday will mark the four-year anniversary of the bottom of the 2008-09 slide into the abyss. In those four short years, the major indices have embarked upon one of the longest uninterrupted stock rallies in global history. The Fed's insistence to throw $85 billion per month at the market through the purchase of Treasury and mortgage-backed securities is like traders drinking from an endless champagne fountain, drunk in the knowledge that any slight pullback will be shortly erased by the ungodly amounts of capital flowing into the markets.
Because the Fed has crushed interest rates (and with them, savers), stocks are the only financial instruments by which one can expect a return in excess of inflation, which is, after all, the key to maintaining and developing a wealth portfolio.
One method by which one can identify a bubble is by watching the dips and subsequent rebounds. In the stock market, this phenomenon is readily apparent. Just looking at today's intraday loss of 61 points and the middday reversal and eventual positive close is evidence enough that - turning an old adage on its side - what goes down will go up.
Last week's 200-plus-point drop on Monday was snuffed out and overwhelmed in the next two days of trading. The pattern is unmistakable and repeatable throughout the four years of excessive Federal Reserve easing and zero interest rate policy. To say that such extraordinary measures are unsustainable would be the understatement of the millennium. Never before in recorded history have interest rates been held so artificially low for such an extended period of time.
The problem with the Fed's policies are that they are reckless and untried in practice. Based entirely upon a groupthink methodology of Keynsian economic theory, the Fed has taken a free-market demand economy and turned it into a manipulated, command-driven socialism experiment, and the results are not and will not be understood until there is an attempt to undo whatever good or damage has been done and return to a semblance of "normalcy," a term becoming more quaint and misunderstood each passing day.
Other than stocks and bonds, the Fed has created - with ample assistance from the inept federal government apparatus - a bubble in student loans, which last year exceeded the total amount of credit crad debt outstanding, approaching a trillion dollars.
One can argue that an education is a worthwhile investment, though, comparing to credit cards, at least most people would have something tangible to show for their monthly statement of debt-slavery. For the graduates and soon-to-be grads, they have a peice of paper attesting they have some rudimentary knowledge in some broad field of endeavor. In an economy long on promise and short on actual paying jobs, those sheepskins are, and maybe become even more, worthless.
The US Federal Reserve is not alone in blowing bubbles, though one can rest assured they were cheering the Chinese all the way toward creating what now must be considered the most massive real estate bubble in the history of the world, dwarfing the sub-prime fiasco by a matter of degrees.
As mentioned by many over the year and documented by CBS' 60 Minutes on the Sunday, March 3rd broadcast, the Chinese have created at least a dozen "ghost cities" complete with high-rises, shopping malls, streets and thoroughfares, infrastructure and amenities, just no people. The simple fact is that the Chinese people were sold a bill of goods by their own versions of snake oil salesmen, buying up properties in developments on the outskirts of most major cities, even though the apartments, housing and commercial rental units are far beyond the reach of the average Chinese working-class individual or family. The 12-minute clip is embedded below.
Whether the timing of the 60 Minutes report was coincidental or just dumb luck (being of the conspiracy mind, we think it's the former), the Chinese central government has imposed new rules designed to slow down the real estate frenzy or the piercing of the bubble, which will, without a doubt, eventually burst. The question is simply a matter of how long and how well Chinese officials can lie and obfuscate the reality that they have created a bubble that has - during the buildup - resonated worldwide, and will do the same as it deflates.
The new measures, which involve higher down payments and higher interest rates on second home buyers and a 20% capital gains tax on the sale of any housing unit that is not a primary dwelling. The Shanghai Composite lost 3.7% on the day, with a number of property development firms down the maximum allowable one-day drop of 10%.
With those results in tow, US stocks began the day lower, but, thanks to our own financial fantasy-land bubble machine, ended higher.
Once again, it seems the three most basic tenets of investment practice have been ignored: buy low, sell high, and do your own due diligence. People never seem to learn.
Oh, well. It's only money.
Showing posts with label debt crisis. Show all posts
Showing posts with label debt crisis. Show all posts
Monday, March 4, 2013
Thursday, December 8, 2011
European Mess Smashes Stocks; How Treasury Secretary Hank Paulson Screwed America
Yesterday in this space, an ancient Wall Street adage was invoked: "Never short a dull market."
We fairly dismissed the idea that, since the US market was basically on hold until the Europeans meet, greet and decide the economic fate of the continent, US stocks would wallow in hopeless delusion, because the Europeans, somewhat like our very own beloved congress, seem incapable of walking and chewing gum at the same time.
Most of them could not get arrested at a bong party, either, but the various inabilities of the ruling elite are not a primary concern. What they're doing to your money, your economic present and future, are.
And they're making a god-awful mess of it.
Just before US markets opened, the ECB announced a rate cut of 25 basis points (0.25%) to one percent, which was annoying to the majority of traders, who, as always, wanted more. A 50 bip reduction would have satiated their appetite for freer money for the while, but the ECB also announced that they would be extending loans of up to 36 months (that's three years for the mathematically-inept) to banks on the continent.
That was met with some enthusiasm, but within minutes, newly-appointed ECB president Mario Draghi dashed hopes at the press conference, claiming that the rate cut vote was not unanimous, signaling a lack of conviction on the part of ECB participants.
Stocks plummeted at the open in the US and only partially recovered late in the day as news leaks from the EU summit meeting beginning tomorrow indicated that a fiscal pact would be pursued by EU member nations, but even that news was short-lived as the major indices closed near the lows of the day.
Europe has become the focal point of global equity and commodity trading as it grapples with the potential for debt contagion among sovereign states and bank failures across the European Union. While difficulties in Europe may not directly affect the economy of the United States and other countries, it will have a pass-through effect, as pain anywhere in the global financial system is felt - to varying degrees - everywhere else.
Hope is now high that the crisis summit - a macabre circus in its own right - will produce some lasting, positive resolution, but the more one looks at the condition of Europe, the less one believes that there will be a positive conclusion short of destroying the Euro as a currency, an outcome that may have more benefits than downsides.
Until tomorrow, at least, stocks took a beating, as once again, the bulk of traders were hoping for positive results from another gang that can't shoot straight.
While on the topic of governments and their follies and foibles, an article by John Crudele in the NY Post should be at the top of the discussion of just how corrupt and obnoxious Wall Street has been and continues to be.
Crudele has been saying for two years that Paulson and other elements of the government were corrupt. In today's story, he finally gets confirmation from Bloomberg Markets that then-Secretary of the Treasury Hank Paulson was passing along insider tips to his buddies at Goldman Sachs (where he had served as CEO prior to being named to head Treasury by President Bush) and others.
Crudele says:
That's all one needs to know about how tightly intertwined Wall Street and top officials of the federal government are intertwined, but it brings up an essential question, or questions: Where are NBC, CBS, CNBC, ABC, FOX on this story, and why hasn't Attorney General Eric Holder announced an investigation?
The answers are simple. Bit players like Martha Stewart and Rob Blogojeich go to jail. Fat-ass scum-bags like Hank Paulson, the architect of TARP and god-knows how many other deceitful financial scams sail off into retirement sunset.
No wonder there is an ugly undercurrent of dissatisfaction and distrust in America. The people at the top have been screwing the public for years, yet not a single one is even investigated. Instead, we are subjected to daily wild market swings and the spectacle of former congressman, former New Jersey governor Jon Corzine explaining to a congressional panel how he didn't know what was going on while his firm, MF Global, raided the coffers of client money to the tune of $1.2 billion.
Corzine won't see the inside of a prison; that you can count on. Neither will Hank Paulson. But some ghetto kid who sells a bag of weed because it's the only way he can make a buck, will receive the full extent of what now humorously is called "justice" in America.
Face it, people, with the thieves and connivers we have in government, we're all royally screwed and the wake-up call is probably a few decades too late.
Thanks to John Crudele and the NY Post for his ground-breaking and tireless reporting efforts. It's amazing he hasn't been fired yet.
And seriously, isn't Ron Paul the only Republican presidential candidate that is electable? The others are either pandering flip-floppers (Gingrich, Romney) or wing-nuts (Santorum, Cain, Bachman, Perry). That leaves only Mr. Paul nd Jon Huntsman as viable candidates. But the mainstream media, which relies upon access to the corrupt political machines running the country, will have no part of either of them.
The best advice is to ignore all of them and fend - as best one can - for oneself and one's family, but, eventually, unless the liars, cheaters and thieves of Wall Street and Washington are rooted out and made to pay for their crimes, America is doomed.
Dow 11,997.70, -198.67 (1.63%)
NASDAQ 2,596.38, -52.83 (1.99%)
S&P 500 1,234.35, -26.66 (2.11%)
NYSE Composite 7,369.52, -190.19 (2.52%)
NASDAQ Volume 1,843,290,125
NYSE Volume 4,222,942,000
Combined NYSE & NASDAQ Advance - Decline: 774-4842
Combined NYSE & NASDAQ New highs - New lows: 100-89
WTI crude oil: 98.34, -2.15
Gold: 1,713.40, -31.40
Silver: 31.54, -1.09
We fairly dismissed the idea that, since the US market was basically on hold until the Europeans meet, greet and decide the economic fate of the continent, US stocks would wallow in hopeless delusion, because the Europeans, somewhat like our very own beloved congress, seem incapable of walking and chewing gum at the same time.
Most of them could not get arrested at a bong party, either, but the various inabilities of the ruling elite are not a primary concern. What they're doing to your money, your economic present and future, are.
And they're making a god-awful mess of it.
Just before US markets opened, the ECB announced a rate cut of 25 basis points (0.25%) to one percent, which was annoying to the majority of traders, who, as always, wanted more. A 50 bip reduction would have satiated their appetite for freer money for the while, but the ECB also announced that they would be extending loans of up to 36 months (that's three years for the mathematically-inept) to banks on the continent.
That was met with some enthusiasm, but within minutes, newly-appointed ECB president Mario Draghi dashed hopes at the press conference, claiming that the rate cut vote was not unanimous, signaling a lack of conviction on the part of ECB participants.
Stocks plummeted at the open in the US and only partially recovered late in the day as news leaks from the EU summit meeting beginning tomorrow indicated that a fiscal pact would be pursued by EU member nations, but even that news was short-lived as the major indices closed near the lows of the day.
Europe has become the focal point of global equity and commodity trading as it grapples with the potential for debt contagion among sovereign states and bank failures across the European Union. While difficulties in Europe may not directly affect the economy of the United States and other countries, it will have a pass-through effect, as pain anywhere in the global financial system is felt - to varying degrees - everywhere else.
Hope is now high that the crisis summit - a macabre circus in its own right - will produce some lasting, positive resolution, but the more one looks at the condition of Europe, the less one believes that there will be a positive conclusion short of destroying the Euro as a currency, an outcome that may have more benefits than downsides.
Until tomorrow, at least, stocks took a beating, as once again, the bulk of traders were hoping for positive results from another gang that can't shoot straight.
While on the topic of governments and their follies and foibles, an article by John Crudele in the NY Post should be at the top of the discussion of just how corrupt and obnoxious Wall Street has been and continues to be.
Crudele has been saying for two years that Paulson and other elements of the government were corrupt. In today's story, he finally gets confirmation from Bloomberg Markets that then-Secretary of the Treasury Hank Paulson was passing along insider tips to his buddies at Goldman Sachs (where he had served as CEO prior to being named to head Treasury by President Bush) and others.
Crudele says:
Under former Treasury Secretary Hank Paulson, confidential government information was regularly leaked to select people on Wall Street.
That's all one needs to know about how tightly intertwined Wall Street and top officials of the federal government are intertwined, but it brings up an essential question, or questions: Where are NBC, CBS, CNBC, ABC, FOX on this story, and why hasn't Attorney General Eric Holder announced an investigation?
The answers are simple. Bit players like Martha Stewart and Rob Blogojeich go to jail. Fat-ass scum-bags like Hank Paulson, the architect of TARP and god-knows how many other deceitful financial scams sail off into retirement sunset.
No wonder there is an ugly undercurrent of dissatisfaction and distrust in America. The people at the top have been screwing the public for years, yet not a single one is even investigated. Instead, we are subjected to daily wild market swings and the spectacle of former congressman, former New Jersey governor Jon Corzine explaining to a congressional panel how he didn't know what was going on while his firm, MF Global, raided the coffers of client money to the tune of $1.2 billion.
Corzine won't see the inside of a prison; that you can count on. Neither will Hank Paulson. But some ghetto kid who sells a bag of weed because it's the only way he can make a buck, will receive the full extent of what now humorously is called "justice" in America.
Face it, people, with the thieves and connivers we have in government, we're all royally screwed and the wake-up call is probably a few decades too late.
Thanks to John Crudele and the NY Post for his ground-breaking and tireless reporting efforts. It's amazing he hasn't been fired yet.
And seriously, isn't Ron Paul the only Republican presidential candidate that is electable? The others are either pandering flip-floppers (Gingrich, Romney) or wing-nuts (Santorum, Cain, Bachman, Perry). That leaves only Mr. Paul nd Jon Huntsman as viable candidates. But the mainstream media, which relies upon access to the corrupt political machines running the country, will have no part of either of them.
The best advice is to ignore all of them and fend - as best one can - for oneself and one's family, but, eventually, unless the liars, cheaters and thieves of Wall Street and Washington are rooted out and made to pay for their crimes, America is doomed.
Dow 11,997.70, -198.67 (1.63%)
NASDAQ 2,596.38, -52.83 (1.99%)
S&P 500 1,234.35, -26.66 (2.11%)
NYSE Composite 7,369.52, -190.19 (2.52%)
NASDAQ Volume 1,843,290,125
NYSE Volume 4,222,942,000
Combined NYSE & NASDAQ Advance - Decline: 774-4842
Combined NYSE & NASDAQ New highs - New lows: 100-89
WTI crude oil: 98.34, -2.15
Gold: 1,713.40, -31.40
Silver: 31.54, -1.09
Friday, November 18, 2011
Rough Week for Stocks Ends Mixed; Markets Gripped by fear and Uncertainty
Despite some favorable economic news during the course of the week, market participants mostly shunned equities as Europe's ongoing crisis and the lack of a deal by the congressional super-committee kept money mostly on the sidelines or taking profits (and losses).
Since the US stock market has become more akin to a day-trading casino than an investment culture, traders now routinely react swiftly to breaking news and events, preferring to stay out of the way or grab quick profits as the tableau of international economic falderal unfolds. The week was marked by more speculation than actual news, as Italian and Spanish 10-year notes criss-crossed the 7% yield threshold and Germany continues to balk at being the savior of the Southern nations, even as Chancellor Angela Merkel admitted that her country was ready to cede some degree of sovereignty in order to salvage what's left of the European monetary union.
Germany holds the key to whether the decade-old European Union will survive, being the largest and strongest economy in the region. While Merkel has made pronouncements pleasing to her neighbors to the West and South, she is losing a degree of favor at home, as many Germans don't exactly share her views and dislike the role of Germany as the bailout nation for weaker economies.
Funding for Greece, Italy, Portugal and Spain has become an issue so delicate and abstract that one solution offered was for the ECB to loan money to the IMF, which would then fund the ailing nations, though that kind of Ponzi scheme would only work to relieve the ECB of their presumptive role of being the "lender of last resort" such as the US Federal Reserve was during the 2008 crisis.
It's a touchy situation in Europe, with new governments in Italy and Greece, both tottering on the brink of default, though Greece's predicament - with no new funding coming soon - is degrees more perilous.
Here in the USA, congressional members have not exactly been forthright in their effort to reach a compromise on the roughly $1.2 trillion in budget cuts which was the mandated approach after the August debt ceiling debacle.
With the US public debt officially exceeding $15 trillion on Thursday and the prospects for another $1 trillion-plus deficit in the coming fiscal year, one would think that congress and their "super-committee" would have found some resolution before their November 23rd deadline, but, as usual, congressional members are deadlocked, mostly along party lines, with Republicans steadfastly refusing to approve anything which even smells like a tax hike and Democrats seemingly all too happy to allow the blame to accrue to their across-the-aisle counterparts.
With the deadline looming just five days ahead, members of the committee are pondering letting the deadline pass, which would trigger automatic spending-cuts, otherwise known as sequestration, though that approach is also riddled with question marks as some members have openly suggested that even those automatic cuts could be ripped asunder, primarily because of opposition to cuts to the Department of Defense.
The comedy of errors which began last Spring with the threatened shutdown of the federal government over budget issues threatens the US credit rating, already taken down a notch in August by Standard and Poor's. Failure to reach agreement might not engender another rating cut, though scuttling the previously agreed-to automatic cuts just might cause S&P to downgrade the US again.
Against this backdrop of a do-nothing congress without political will or wherewithal, and a fractured Europe an landscape, one can hardly blame traders for seeking the safety of cash or Treasuries. Volume on the stock exchanges this week has been dismal, exacerbated by a missing $600 million in investor funds courtesy of the recently-bankrupt MF Global. The fund, run by former Goldman Sachs CEO and New Jersey Governor Jon Corzine, made heavy bets on European debt and found themselves in too deep. The current thinking is that MF Global used client funds to shore up losing positions before going belly-up, a practice that is wholly criminal.
However, since nobody ever goes to trial or jail for financial follies in the US, regulators are being very tight-lipped about the matter, even though reputations have already been badly tarnished and over half a billion dollars is either unavailable or lost.
For the week, the Dow Jones Industrials took it on the chin to the tune of a 357-point decline. The S&P 500 fell 50 points during the week, the NASDAQ down 106 points and the NYSE Composite off by 294 points, hardly a ringing endorsement during a week that ended with options expiration, normally the forebear of a rally.
Maybe, with all the hurt, pain, fear and uncertainty, the big money went short.
Dow 11,796.16, +25.43 (0.22%)
NASDAQ 2,572.50, -15.49 (0.60%)
S&P 500 1,215.65, -0.48 (0.04%)
NYSE Composite 7,282.47, +8.32 (0.11%)
NASDAQ Volume 1,754,685,000
NYSE Volume 3,679,453,750
Combined NYSE & NASDAQ Advance - Decline: 3011-2563
Combined NYSE & NASDAQ New highs - New lows: 40-128
WTI crude oil: 97.41, -1.41
Gold: 1,725.10, +4.90
Silver: 32.42, +0.92
Since the US stock market has become more akin to a day-trading casino than an investment culture, traders now routinely react swiftly to breaking news and events, preferring to stay out of the way or grab quick profits as the tableau of international economic falderal unfolds. The week was marked by more speculation than actual news, as Italian and Spanish 10-year notes criss-crossed the 7% yield threshold and Germany continues to balk at being the savior of the Southern nations, even as Chancellor Angela Merkel admitted that her country was ready to cede some degree of sovereignty in order to salvage what's left of the European monetary union.
Germany holds the key to whether the decade-old European Union will survive, being the largest and strongest economy in the region. While Merkel has made pronouncements pleasing to her neighbors to the West and South, she is losing a degree of favor at home, as many Germans don't exactly share her views and dislike the role of Germany as the bailout nation for weaker economies.
Funding for Greece, Italy, Portugal and Spain has become an issue so delicate and abstract that one solution offered was for the ECB to loan money to the IMF, which would then fund the ailing nations, though that kind of Ponzi scheme would only work to relieve the ECB of their presumptive role of being the "lender of last resort" such as the US Federal Reserve was during the 2008 crisis.
It's a touchy situation in Europe, with new governments in Italy and Greece, both tottering on the brink of default, though Greece's predicament - with no new funding coming soon - is degrees more perilous.
Here in the USA, congressional members have not exactly been forthright in their effort to reach a compromise on the roughly $1.2 trillion in budget cuts which was the mandated approach after the August debt ceiling debacle.
With the US public debt officially exceeding $15 trillion on Thursday and the prospects for another $1 trillion-plus deficit in the coming fiscal year, one would think that congress and their "super-committee" would have found some resolution before their November 23rd deadline, but, as usual, congressional members are deadlocked, mostly along party lines, with Republicans steadfastly refusing to approve anything which even smells like a tax hike and Democrats seemingly all too happy to allow the blame to accrue to their across-the-aisle counterparts.
With the deadline looming just five days ahead, members of the committee are pondering letting the deadline pass, which would trigger automatic spending-cuts, otherwise known as sequestration, though that approach is also riddled with question marks as some members have openly suggested that even those automatic cuts could be ripped asunder, primarily because of opposition to cuts to the Department of Defense.
The comedy of errors which began last Spring with the threatened shutdown of the federal government over budget issues threatens the US credit rating, already taken down a notch in August by Standard and Poor's. Failure to reach agreement might not engender another rating cut, though scuttling the previously agreed-to automatic cuts just might cause S&P to downgrade the US again.
Against this backdrop of a do-nothing congress without political will or wherewithal, and a fractured Europe an landscape, one can hardly blame traders for seeking the safety of cash or Treasuries. Volume on the stock exchanges this week has been dismal, exacerbated by a missing $600 million in investor funds courtesy of the recently-bankrupt MF Global. The fund, run by former Goldman Sachs CEO and New Jersey Governor Jon Corzine, made heavy bets on European debt and found themselves in too deep. The current thinking is that MF Global used client funds to shore up losing positions before going belly-up, a practice that is wholly criminal.
However, since nobody ever goes to trial or jail for financial follies in the US, regulators are being very tight-lipped about the matter, even though reputations have already been badly tarnished and over half a billion dollars is either unavailable or lost.
For the week, the Dow Jones Industrials took it on the chin to the tune of a 357-point decline. The S&P 500 fell 50 points during the week, the NASDAQ down 106 points and the NYSE Composite off by 294 points, hardly a ringing endorsement during a week that ended with options expiration, normally the forebear of a rally.
Maybe, with all the hurt, pain, fear and uncertainty, the big money went short.
Dow 11,796.16, +25.43 (0.22%)
NASDAQ 2,572.50, -15.49 (0.60%)
S&P 500 1,215.65, -0.48 (0.04%)
NYSE Composite 7,282.47, +8.32 (0.11%)
NASDAQ Volume 1,754,685,000
NYSE Volume 3,679,453,750
Combined NYSE & NASDAQ Advance - Decline: 3011-2563
Combined NYSE & NASDAQ New highs - New lows: 40-128
WTI crude oil: 97.41, -1.41
Gold: 1,725.10, +4.90
Silver: 32.42, +0.92
Monday, October 24, 2011
Euro Rising Amid Escalating Debt Crisis; Gold Worth $11,000/Ounce?
There are now differing views over the ongoing European debt crisis, which made Monday a banner day for the pair trade of short US dollar/long US stocks.
The view widely held by Wall Street influencers is the one promoted by the well-compromised "news" organization, Reuters, a proxy for the Wall Street/Washington oligarchy currently under attack by the Occupy Wall Street and other, spawned protest movements. Reuters reports that there is growing confidence that the EU leaders will forge a broad agreement with which to deal with the Euro-zone's debt issues by Wednesday of this week. Such wishful thinking pushed the Euro to a six-week high against the dollar, sparking the rally in US equities on the cheaper - for now - US dollar.
Alternately, NPR, in the embedded radio clip below, headlined its story Agreement On Debt Crisis Eludes EU Leaders, citing differences in approach by the various leaders amid calls for austere cutbacks in Italy to stem its own set of problems.
Realistically, nobody has a very good handle on where this is all headed, though widespread agreement seems a long shot. Greece has needed two rounds of bailout money already, and the country has been forced to suffer through doubt, derision, protests, strikes and riots in recent days as the government agreed to severe austerity measures, cutbacks in services and layoffs to help the government avoid running out of money.
Some kind of European plan is supposed to be released to the public by Wednesday, so there's probably no reason for stocks or the Euro/Dollar trade to deviate much until then. Details of the plan have been hashed about, though nothing is for certain except that it will include bailout money for some of Europe's largest banks (called: recapitalization) and some funding and dispersal mechanisms for the EFSF, the newly-created sovereign debt fund that is supposed to provide much-needed liquidity to the Euro system. Of course, the Euro money machine is beginning to look a lot like another global Ponzi scheme, with indebted countries providing funding through various channels to even-worse indebted nations like Greece, Ireland, Italy, Spain and Portugal.
Anyone with a view of history longer than his or her current lifespan might have a better idea of where the Greek crisis is headed and it is most certainly not a happy place. Usually, when governments spend or steal too much of their citizens' money, overtaxing and under-delivering on promises and services, it means the end of the reigning regime, either trough violent overthrow or peaceful negotiation, though the former, albeit it's bloody features, has been more successful through the pantheon of history in securing the absolute rights of individuals while removing parasitic forces of government from the inflicted nation.
In Greece, it appears that the rowdy protesters have slowly but steadily been gaining ground and, with the emergence of Occupy Wall Street and other such groups, populist movements seem to be spreading faster than government efforts to defame or derail the groups. One interesting development was Michael Moore's appearance on CNBC this morning.
While the interview was not a first for Moore on CNBC, the filmmaker and champion of the "little guy" was allowed on air for over 11 minutes, and made some strong points on the inequitable economic situation facing all but America's wealthiest people. The piece is well worth the viewing time, as Moore made his case to Carl Quintanilla, a reporter and anchor who might just have something of a conscience.
One other story of note on the day is James Turk's elegant arithmetic in making his case why gold should be $11,000 an ounce. (PS: at a 16:1 gold:silver ratio - the traditional ratio - that would make the current silver price of around $31 per ounce, seem even more ridiculous. Something along the lines of $687/ounce would be appropriate.
Dow 11,913.62, +104.83 (0.89%)
NASDAQ 2,699.44, +61.98 (2.35%)
S&P 500 1,254.19, +15.94 (1.29%)
NYSE Composite 7,547.63, +116.53 (1.57%)
NASDAQ Volume 1,988,391,000
NYSE Volume 4,291,371,500
Combined NYSE & NASDAQ Advance - Decline: 4660-1018
Combined NYSE & NASDAQ New highs - New lows: 125-24
WTI crude oil: 91.27, +3.87
Gold: 1,652.30, +16.20
Silver: 31.64, +0.45
The view widely held by Wall Street influencers is the one promoted by the well-compromised "news" organization, Reuters, a proxy for the Wall Street/Washington oligarchy currently under attack by the Occupy Wall Street and other, spawned protest movements. Reuters reports that there is growing confidence that the EU leaders will forge a broad agreement with which to deal with the Euro-zone's debt issues by Wednesday of this week. Such wishful thinking pushed the Euro to a six-week high against the dollar, sparking the rally in US equities on the cheaper - for now - US dollar.
Alternately, NPR, in the embedded radio clip below, headlined its story Agreement On Debt Crisis Eludes EU Leaders, citing differences in approach by the various leaders amid calls for austere cutbacks in Italy to stem its own set of problems.
Realistically, nobody has a very good handle on where this is all headed, though widespread agreement seems a long shot. Greece has needed two rounds of bailout money already, and the country has been forced to suffer through doubt, derision, protests, strikes and riots in recent days as the government agreed to severe austerity measures, cutbacks in services and layoffs to help the government avoid running out of money.
Some kind of European plan is supposed to be released to the public by Wednesday, so there's probably no reason for stocks or the Euro/Dollar trade to deviate much until then. Details of the plan have been hashed about, though nothing is for certain except that it will include bailout money for some of Europe's largest banks (called: recapitalization) and some funding and dispersal mechanisms for the EFSF, the newly-created sovereign debt fund that is supposed to provide much-needed liquidity to the Euro system. Of course, the Euro money machine is beginning to look a lot like another global Ponzi scheme, with indebted countries providing funding through various channels to even-worse indebted nations like Greece, Ireland, Italy, Spain and Portugal.
Anyone with a view of history longer than his or her current lifespan might have a better idea of where the Greek crisis is headed and it is most certainly not a happy place. Usually, when governments spend or steal too much of their citizens' money, overtaxing and under-delivering on promises and services, it means the end of the reigning regime, either trough violent overthrow or peaceful negotiation, though the former, albeit it's bloody features, has been more successful through the pantheon of history in securing the absolute rights of individuals while removing parasitic forces of government from the inflicted nation.
In Greece, it appears that the rowdy protesters have slowly but steadily been gaining ground and, with the emergence of Occupy Wall Street and other such groups, populist movements seem to be spreading faster than government efforts to defame or derail the groups. One interesting development was Michael Moore's appearance on CNBC this morning.
While the interview was not a first for Moore on CNBC, the filmmaker and champion of the "little guy" was allowed on air for over 11 minutes, and made some strong points on the inequitable economic situation facing all but America's wealthiest people. The piece is well worth the viewing time, as Moore made his case to Carl Quintanilla, a reporter and anchor who might just have something of a conscience.
One other story of note on the day is James Turk's elegant arithmetic in making his case why gold should be $11,000 an ounce. (PS: at a 16:1 gold:silver ratio - the traditional ratio - that would make the current silver price of around $31 per ounce, seem even more ridiculous. Something along the lines of $687/ounce would be appropriate.
Dow 11,913.62, +104.83 (0.89%)
NASDAQ 2,699.44, +61.98 (2.35%)
S&P 500 1,254.19, +15.94 (1.29%)
NYSE Composite 7,547.63, +116.53 (1.57%)
NASDAQ Volume 1,988,391,000
NYSE Volume 4,291,371,500
Combined NYSE & NASDAQ Advance - Decline: 4660-1018
Combined NYSE & NASDAQ New highs - New lows: 125-24
WTI crude oil: 91.27, +3.87
Gold: 1,652.30, +16.20
Silver: 31.64, +0.45
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