It is difficult to express just how warped US markets have become, though, from the movements of the past two trading days, a case can be made that the markets are being guided by forces that are distinctively not based on free market ideology nor statistics that can be trusted within any degree of accuracy.
Taking a look first on the massive downdraft in commodities - mostly silver and crude oil - from Thursday's trading, one should look no further than the CME (Chicago Mercantile Exchange), the overarching body that controls trade in futures, options and various other derivatives.
The CME raised margin requirements - the cost to buy a futures contract - on silver four times in the past two weeks. That resulted in many speculators - generally honest traders working with leverage via margin - to reduce their exposure, thereby taking the price of silver from close to $50/ounce on Friday, April 29, to under $35/ounce by Thursday, May 5.
This really doesn't require much thought. If it costs more to buy something - in this case a silver futures contract - you either buy less of it or don't buy at all, waiting until the price is more reasonable. In the case of silver futures contract, a highly inelastic entity (You can't buy a fraction on one; you must buy a full contract.), one is either in or out. When margin requirements (cost) rise rapidly, many legitimate buyers head for the hills. This is exactly what happened all week, culminating in the final thrust downward on Thursday, May 5, as there were also fewer short contract holders which would have provided some support, having to cover as prices fell. Alas, the shorts were also out of the market due to exorbitant margin costs.
This makes a great deal of sense from a banker's perspective. Money flowing into either physical silver or gold is money out of circulation, and, more dangerously, into a competing currency. Precious metals compete with all fiat (paper) currencies, insofar as they are considered stores of wealth and mediums of exchange. Thus, when one buys Silver Eagles, silver bars, etc., bankers get worried because the buyer exchanged paper dollars (or Euros or Yen or Reals) for physical metal. And if the price of physical metal and the amount in circulation gets too high, the need for paper dollars is diminished.
Silver, being the "coin of gentlemen," as opposed to gold, "the coin of the realm (or, kings), is a very dangerous commodity to the banker line of thought. If more and more ordinary people - the "little guys" upon whom the banker depends - conduct transactions in silver - the utility of paper money declines, velocity decreases and all of a sudden there's a liquidity crisis.
This is exactly what the global (mostly in the USA) banking cartel feared as silver approached all-time highs, thus the need for margin hikes to kill the competing currency before it became a real threat.
The same is true for gold, to a lesser degree, as central banks hold gold as a final backstop to their paper currencies, though it is leased out, levered 100-1, and therefore, being a useful conduit for the bankers, not as volatile as silver.
As for oil, what caused Thursday's sell-off is a little less clear, but again, the CME, which owns the NYMEX, where West Texas Intermediate oil futures (the most popular and widely held) are traded, extended trading range limits from $10 to $20, exacerbating an already decisive decline.
In simple terms, the CME allowed oil to fall though the floor simply by changing the rules in the middle of the day. There's less concern in the price of oil declining, because lower oil prices are generally good for everybody outside of oil companies and Middle East sovereigns, so less attention was paid to the CMEs quick decision, but it still underscores the levels at which rules will be either broken or amended to accommodate the needs of the powers behind the money (read: the too big to fail banks, the Fed and Treasury Department).
Now to Friday's fiasco in the Bureau of labor Standards (BLS) non-farm payroll data for April (the establishment survey). While the consensus opinion had been trending toward lowered expectations, the BLS surprised everybody with the announcement of 244,000 new jobs created during the month, 268,000 in the private sector, offset by a loss of 24,000 public sector jobs - mostly municipal and state employees being furloughed.
What's intriguing about the non-farm payroll data is how the numbers are created, and the use of the word "created" is no accident, because the BLS employs such such extreme and convoluted data manipulation that pure statistics become rather murky. It's easy to say that our monthly "jobs data" is more a political process than an actual statistical survey with a margin of error in the low single digits. It's guided by a smallish sample and then amplified by what's known as the "birth/death model," a number created to reflect the number of businesses opening (birth) and closing down (death).
Does the BLS actually sample bankruptcy and new corporation filings in selected communities and states? No. Does the BLS ever adjust the number for seasonality. No. For accuracy, yes, but not in the month-to-month survey numbers.
So, from where did the 244,000 net new jobs in April come? 175,000 came from the birth/death model. And while some are contending that roughly 62,000 came from the widely-published McDonald's hiring, the Wall Street Journal begs to differ, stating that McDonald's hire date was April 19, a week after the BLS survey period.
Taking just the raw data, subtracting out the birth/death figures, the US economy consisting of existing businesses created 69,000 net new jobs - not so hot. If we can believe that a couple hundred thousand newly-minted entrepreneurs joined the business fray and 30 to 40,000 businesses went belly up in the same time frame, we could believe this figure. However, like the missing photo of a dead Osama bin Laden, there's no proof of these "births" and "deaths," only trust in the BLS, which, by the way, stretched credulity again by proclaiming the official unemployment rate to have risen, up to nine per cent (9%).
That rise correlated to the other side of the BLS coin, the household survey, which showed the number of employed persons to have fallen by 190,000 from the March reporting period to April.
Is it a gain of 244,000 jobs or a loss of 190,000? Who knows? The point is that many decisions are made based upon the BLS data, which, as shown, is more guesswork and massaging of data than trustworthy data, but one wonders if these decisions are based on reality, a perception of reality, or if the reality is being superimposed upon the American public to suit the current narrative of "recovery."
Whatever the case, it seems a shoddy way to run a country's economy, with dodgy data and questionable maneuvers by those running the exchanges.
It doesn't snow much in the USA in May, but that surely doesn't preclude a massive snow job by Wall Street and the federal government and their extensions.
Showing posts with label employment. Show all posts
Showing posts with label employment. Show all posts
Friday, May 6, 2011
Tuesday, November 2, 2010
The End (of the ruling elite) is Here for the Taking... but is anybody listening?
Today is election day, but, for most of us, it is meaningless. The new bodies elected with do about the same as the ones being replaced: nothing, or make matters worse. To buttress my argument, I direct you to reading a post by Jim Quinn, detailing precisely how the government, with a grand assist by the private Federal Reserve, has misspent our fortune and has destined us to a future of depression and depravity. His tome is somewhat inappropriately titled, Suicide is Painless, because most people simply do not see that they and their neighbors are being slowly starved and/or bled to death, so maybe "assisted suicide is painless" would be preferable.
Now, how do we (wait, you did read the article linked above, right?) go about the destruction of the ruling elite?
Dispensing with the final scene of Fight Club, which would be thrilling and decisive, aleit never possible in the real world, we must find other means to our end.
We can start today by not voting, or voting for anybody but the candidates on the ballots (actually, the machines will change our votes to whatever they like, so just avoiding the polling places may be the best tactic).
Next, we must starve the beast. Grow your own fruits and veggies and instruct others to do the same. Cut out the Monsantos and McDonald's.
Cut utility bills by using less. Install a small solar panel or two, maybe a wind turbine, get the wasters (I have a neighbor who insists on keeping lights on in every room and two more outdoors almost all night long) to stop their own madness by showing them the reality of lower utility bills. If they don't listen, ridicule them, make them feel shame for their waste.
Kill the big banks. Take all money out of the 15 largest banks and put it in local banks or credit unions.
Keep buying gold and silver.
Fight and avoid taxation at every opportunity.
If opportunity presents itself, harm the interests of corporations. Be creative.
Foster an environment in which everybody is encouraged to be more self-reliant, less wasteful and point out the true enemies: banks, corporations, government at all levels.
It's a small start, but we must begin to take back the nation.
As for the markets, same old story. More gains on low volume.
Dow 11,188.72, +64.10 (0.58%)
NASDAQ 2,533.52, +28.68 (1.14%)
S&P 500 1,193.57, +9.19 (0.78%)
NYSE Composite 7,582.14, +72.93 (0.97%)
Advancers ran roughshod over declining issues, 4795-1663. There were 615 new highs and just 72 new lows. Volume: no comment.
NASDAQ Volume 1,923,377,125
NYSE Volume 4,254,097,500
My data is showing no change for oil, at $82.95, though I know it traded higher than that. Gold popped by $6.60, to $1,356.90; silver was also higher, up 28 cents, to $24.84.
There is a slew of data coming through on Wednesday, but tonight everybody will be focused on the election results. Somehow, Wall Street and their ilk believe that change is good or that somehow, electing a large number of nutjob, Tea Party Republicans is going to change policy in Washington. At best, it will produce a stalemate, which is exactly what is not needed. Change is needed. Changes in regulations, taxes, rules, but mostly in how we are governed and how the federal government communicates with the public. But that won't happen; we know it won't.
Wall Street, the real control of politicians, is full of itself and some other stuff that's usually found on cow pastures.
The data stream for tomorrow begins at 7:30 AM with the Challenger Job Cuts for October. At 8:15 AM, the release of ADP Employment Change for October, followed by the 10:00 AM release of ISM Services and Factory Orders. After the 10:30 AM release of Crude Inventories, the market will hold its collective breath, awaiting the FOMC Rate Decision at 2:15 PM, which is not really a rate decision, as federal funds rates are permanently stuck at ZERO, but the world expects to hear details on just how quickly the Fed is going to finish off the US economy through inflation, otherwise known as QE2, or, printing gazillions of dollars with nothing backing them.
Best guess moving forward is the Republicans gain control of the House, nothing changes, but the Fed produces runaway inflation in food, fuel and utilities, further crushing the middle class. Stocks will go to the moon, but the economy will be dead with unemployment approaching 25%.
There's a way out, but it requires a thinking, functioning populace that isn't dependent on the government for anything. Considering the 47 million people already on food stamps and even more on some form of government assistance (along the lines of 50% of the population), hope is fading fast.
Every man for himself? Could be.
Now, how do we (wait, you did read the article linked above, right?) go about the destruction of the ruling elite?
Dispensing with the final scene of Fight Club, which would be thrilling and decisive, aleit never possible in the real world, we must find other means to our end.
We can start today by not voting, or voting for anybody but the candidates on the ballots (actually, the machines will change our votes to whatever they like, so just avoiding the polling places may be the best tactic).
Next, we must starve the beast. Grow your own fruits and veggies and instruct others to do the same. Cut out the Monsantos and McDonald's.
Cut utility bills by using less. Install a small solar panel or two, maybe a wind turbine, get the wasters (I have a neighbor who insists on keeping lights on in every room and two more outdoors almost all night long) to stop their own madness by showing them the reality of lower utility bills. If they don't listen, ridicule them, make them feel shame for their waste.
Kill the big banks. Take all money out of the 15 largest banks and put it in local banks or credit unions.
Keep buying gold and silver.
Fight and avoid taxation at every opportunity.
If opportunity presents itself, harm the interests of corporations. Be creative.
Foster an environment in which everybody is encouraged to be more self-reliant, less wasteful and point out the true enemies: banks, corporations, government at all levels.
It's a small start, but we must begin to take back the nation.
As for the markets, same old story. More gains on low volume.
Dow 11,188.72, +64.10 (0.58%)
NASDAQ 2,533.52, +28.68 (1.14%)
S&P 500 1,193.57, +9.19 (0.78%)
NYSE Composite 7,582.14, +72.93 (0.97%)
Advancers ran roughshod over declining issues, 4795-1663. There were 615 new highs and just 72 new lows. Volume: no comment.
NASDAQ Volume 1,923,377,125
NYSE Volume 4,254,097,500
My data is showing no change for oil, at $82.95, though I know it traded higher than that. Gold popped by $6.60, to $1,356.90; silver was also higher, up 28 cents, to $24.84.
There is a slew of data coming through on Wednesday, but tonight everybody will be focused on the election results. Somehow, Wall Street and their ilk believe that change is good or that somehow, electing a large number of nutjob, Tea Party Republicans is going to change policy in Washington. At best, it will produce a stalemate, which is exactly what is not needed. Change is needed. Changes in regulations, taxes, rules, but mostly in how we are governed and how the federal government communicates with the public. But that won't happen; we know it won't.
Wall Street, the real control of politicians, is full of itself and some other stuff that's usually found on cow pastures.
The data stream for tomorrow begins at 7:30 AM with the Challenger Job Cuts for October. At 8:15 AM, the release of ADP Employment Change for October, followed by the 10:00 AM release of ISM Services and Factory Orders. After the 10:30 AM release of Crude Inventories, the market will hold its collective breath, awaiting the FOMC Rate Decision at 2:15 PM, which is not really a rate decision, as federal funds rates are permanently stuck at ZERO, but the world expects to hear details on just how quickly the Fed is going to finish off the US economy through inflation, otherwise known as QE2, or, printing gazillions of dollars with nothing backing them.
Best guess moving forward is the Republicans gain control of the House, nothing changes, but the Fed produces runaway inflation in food, fuel and utilities, further crushing the middle class. Stocks will go to the moon, but the economy will be dead with unemployment approaching 25%.
There's a way out, but it requires a thinking, functioning populace that isn't dependent on the government for anything. Considering the 47 million people already on food stamps and even more on some form of government assistance (along the lines of 50% of the population), hope is fading fast.
Every man for himself? Could be.
Tuesday, June 22, 2010
All Global Markets Feeling the Pinch; Jobs, Housing Apply Pressure
Maybe I was a bit too harsh in recent postings, calling US stock exchanges things like, "the laughing stock of the world," and "overtly manipulated."
This was the conclusion I came to after seeing this headline: Europe shares fall, ending 9-day rally; BP slides, as I had no idea that the European bourses had embarked upon such a ridiculous rally. Knowing they had been advancing in recent days, along with the Euro itself, seemed commonplace, until the headline shook me out of the doldrums and back to reality.
It makes a great deal of sense, realistically, that the Euro-zone nations would ply the same heavy-handed collusion that makes US markets zig, zag, sway to and fro on a moments notice, with or without news or even rumors, until after the fact. All of the European economies and those in North America are under the same gun: they must print money or die, as their currencies become more and more worthless pieces of paper. Accordingly, officials at the various central banks must look dutiful, despite knowing their vain efforts will eventually come to naught.
A nine-day rally across the continent is thus no surprise, merely an extension of the supra-market powers held by the major banks and financial institutions, blessed by the central banking cartel. Their only option is to inflate assets, create money and pray that they may liquidate their own assets and run to a developing nation before the populace comes for them with pitchforks in hand and torches ablaze.
This makes even more sense in light of Monday's faux rally, based entirely on hopes that China's revaluation of the Yuan might stimulate some economic activity for their beleaguered economies. Apparently, most of the insider financiers forgot that China is primarily an importer of raw materials and an exporter of finished goods, and that condition doesn't necessarily stack up to much of anything positive for the Euro-Anglo-American alliance, which has gone from Empire to empty over the past 60 years.
China continues on a powerful growth pathway, along with India, Brazil, Russia and many other previously-underdeveloped countries which now benefit from globalization without the excessive burden of decades worth of unfunded liabilities in health care and pensions. One can also throw Japan into the failing-developed world mix, since they began an accelerated path of destruction nearly twenty years ago and haven't been able to shake off persistent deflation in their internal economy.
Once it was clear that European markets were heading South, it didn't take long for the US to follow the lead on Tuesday. With the S&P and Dow crossing over the flat line throughout the morning and early afternoon, the NASDAQ finally succumbed and headed permanently into the red zone after 2:00 pm as stocks closed at or near session lows for the second straight day. Losses in all the major US indices accelerated through the closing hour of trade. The Dow and S&P closed below their respective 200-day moving averages, while the NASDAQ finished precariously hovering over its own 200-day MA.
Adding to the nightmarish scenario was more data suggesting another round of price declines in the US housing market, though much different in quality from the subprime bust of 2008-2009. The new paradigm is closely related to jobs, which still are not being created in the private sector and likely won't. No jobs means no mortgage payment and further defaults and foreclosures for the major banks.
The vicious deflationary cycle is gaining momentum on the back of deplorable employment and housing environments. Today's release of existing home sales for May by the NAR evidenced a 2.2% decline month-over-month. The weak housing market is being exacerbated by continued weakness in the jobs market and resetting of millions of adjustable rate mortgages sold from 2005-2006, most of which carry a balloon second loan set to expire - and need to be refinanced - this year and next.
With employment conditions as poor as they are, many homeowners in this condition will not be able to secure bridge financing and will fall into default and foreclosure, adding more of a glut to an already-over-saturated residential market. The result will be another breakdown in price by anywhere from 10-25%, depending on the market.
Dow 10,293.52, -148.89 (1.43%)
NASDAQ 2,261.80, -27.29 (1.19%)
S&P 500 1,095.31, -17.89 (1.61%)
NYSE Composite 6,858.95, -119.91 (1.72%)
Declining issues continued to dominate advancers, just as they had on Monday, 5054-1483, but the bearish camp had additional ammunition for their argument Tuesday as new lows nearly surpassed new highs, losing out narrowly, 105-93. Volume was decidedly thin, though velocity may not be an issue during what seems to be setting up as a long, hot summer of decline.
NYSE Volume 5,205,686,000
NASDAQ Volume 1,801,127,500
Commodities did little better than equities on the day. Oil lost 61 cents, to $77.21, while gold added a marginal gain of 20 cents to finish at $1,239.90. Silver added 9 cents in price, to $18.90.
Stocks continue to be highly speculative, volatile and risky in this environment and no place for retirement savings, which is, unfortunately, where most of Americans are invested, either through their own 401K plans or state-funded pensions. Another severe downturn in stocks could easily spark a panic similar to the one in 2008, though this time the consequences may be even more severe.
The doomsday scenario may take as long as another five to seven years in which to be played out, so many investors and hard-working middle class Americans may still have time to fortify their financial defenses.
Reiterating the advice of the past year and a half: Cash and equivalents, arable land and tools of trade are suitable long-term investments for financial survival.
A double dip in virtually all important measures of economic activity seems almost a certainty at this point. Stocks could tumble as much as 30% by year's end, if not more.
This was the conclusion I came to after seeing this headline: Europe shares fall, ending 9-day rally; BP slides, as I had no idea that the European bourses had embarked upon such a ridiculous rally. Knowing they had been advancing in recent days, along with the Euro itself, seemed commonplace, until the headline shook me out of the doldrums and back to reality.
It makes a great deal of sense, realistically, that the Euro-zone nations would ply the same heavy-handed collusion that makes US markets zig, zag, sway to and fro on a moments notice, with or without news or even rumors, until after the fact. All of the European economies and those in North America are under the same gun: they must print money or die, as their currencies become more and more worthless pieces of paper. Accordingly, officials at the various central banks must look dutiful, despite knowing their vain efforts will eventually come to naught.
A nine-day rally across the continent is thus no surprise, merely an extension of the supra-market powers held by the major banks and financial institutions, blessed by the central banking cartel. Their only option is to inflate assets, create money and pray that they may liquidate their own assets and run to a developing nation before the populace comes for them with pitchforks in hand and torches ablaze.
This makes even more sense in light of Monday's faux rally, based entirely on hopes that China's revaluation of the Yuan might stimulate some economic activity for their beleaguered economies. Apparently, most of the insider financiers forgot that China is primarily an importer of raw materials and an exporter of finished goods, and that condition doesn't necessarily stack up to much of anything positive for the Euro-Anglo-American alliance, which has gone from Empire to empty over the past 60 years.
China continues on a powerful growth pathway, along with India, Brazil, Russia and many other previously-underdeveloped countries which now benefit from globalization without the excessive burden of decades worth of unfunded liabilities in health care and pensions. One can also throw Japan into the failing-developed world mix, since they began an accelerated path of destruction nearly twenty years ago and haven't been able to shake off persistent deflation in their internal economy.
Once it was clear that European markets were heading South, it didn't take long for the US to follow the lead on Tuesday. With the S&P and Dow crossing over the flat line throughout the morning and early afternoon, the NASDAQ finally succumbed and headed permanently into the red zone after 2:00 pm as stocks closed at or near session lows for the second straight day. Losses in all the major US indices accelerated through the closing hour of trade. The Dow and S&P closed below their respective 200-day moving averages, while the NASDAQ finished precariously hovering over its own 200-day MA.
Adding to the nightmarish scenario was more data suggesting another round of price declines in the US housing market, though much different in quality from the subprime bust of 2008-2009. The new paradigm is closely related to jobs, which still are not being created in the private sector and likely won't. No jobs means no mortgage payment and further defaults and foreclosures for the major banks.
The vicious deflationary cycle is gaining momentum on the back of deplorable employment and housing environments. Today's release of existing home sales for May by the NAR evidenced a 2.2% decline month-over-month. The weak housing market is being exacerbated by continued weakness in the jobs market and resetting of millions of adjustable rate mortgages sold from 2005-2006, most of which carry a balloon second loan set to expire - and need to be refinanced - this year and next.
With employment conditions as poor as they are, many homeowners in this condition will not be able to secure bridge financing and will fall into default and foreclosure, adding more of a glut to an already-over-saturated residential market. The result will be another breakdown in price by anywhere from 10-25%, depending on the market.
Dow 10,293.52, -148.89 (1.43%)
NASDAQ 2,261.80, -27.29 (1.19%)
S&P 500 1,095.31, -17.89 (1.61%)
NYSE Composite 6,858.95, -119.91 (1.72%)
Declining issues continued to dominate advancers, just as they had on Monday, 5054-1483, but the bearish camp had additional ammunition for their argument Tuesday as new lows nearly surpassed new highs, losing out narrowly, 105-93. Volume was decidedly thin, though velocity may not be an issue during what seems to be setting up as a long, hot summer of decline.
NYSE Volume 5,205,686,000
NASDAQ Volume 1,801,127,500
Commodities did little better than equities on the day. Oil lost 61 cents, to $77.21, while gold added a marginal gain of 20 cents to finish at $1,239.90. Silver added 9 cents in price, to $18.90.
Stocks continue to be highly speculative, volatile and risky in this environment and no place for retirement savings, which is, unfortunately, where most of Americans are invested, either through their own 401K plans or state-funded pensions. Another severe downturn in stocks could easily spark a panic similar to the one in 2008, though this time the consequences may be even more severe.
The doomsday scenario may take as long as another five to seven years in which to be played out, so many investors and hard-working middle class Americans may still have time to fortify their financial defenses.
Reiterating the advice of the past year and a half: Cash and equivalents, arable land and tools of trade are suitable long-term investments for financial survival.
A double dip in virtually all important measures of economic activity seems almost a certainty at this point. Stocks could tumble as much as 30% by year's end, if not more.
Wednesday, May 5, 2010
Geithner, Bernanke, and PPT Swing into Action
Let's see if we can get this story right for a change.
When the markets opened at 9:30 am in New York, the flood of news could not have been more distressing. Three bank employees lost their lives in Greece, where government employees and other activists openly clashed with police (see video below). European markets were suffering intense losses, ranging between 1.28% (Great Britain) and 3.16% (Greece).
Here in the US, the precursor to the government's monthly non-farm payroll report (due out Friday morning), the monthly ADP private sector employment report [PDF] showed little progress for the month of April, with a mere 32,000 new jobs being created, hardly the kind of news investors are seeking. Hiring simply has not materialized, no matter how many times President Obama says, "we're making progress," or the news media hoists up another flag for economic recovery.
Stock futures trended deeply lower prior to the opening bell, with bond yields falling fast and the US dollar strengthening against the Euro, in particular. Once the trading was underway, stocks were slammed, with the Dow down 107 points in the opening minutes of trade and the NASDAQ falling 42 points, piercing its 50-day moving average.
Apparently, this kind of rational market reaction to bad news was too much for our intrepid clandestine market riggers - the Plunge Protection Team (PPT) - which swung into action less than 15 minutes after the open. Suddenly, markets around the globe began to turn. All of the major indices headed higher, with the Dow actually registering positive numbers by midday.
Eventually, all of the major indices closed at or below their respective 50-day MAs, but that was after the PPT made certain that small investors were skewered and the major banks and financial firms didn't suffer too badly. The government, the media and the Wall Street elite have a vested interest in glad-handing everybody and spreading as much cheer as possible, no matter how bad the economy is. Not only is there a great deal of money at risk, but for the politicians and financiers, their jobs might be lost if the truth be set loose upon the American public.
The downturn is in full force, whether the undercover lever-pullers like it or not. They've been throwing wads of money - in the billions and trillions of dollars - at the economy, with no discernible results. No new jobs are being created and, despite the glowing reports from Wall Street firms, the American middle class is going down the tubes in a very big hurry.
Residential real estate has experienced a momentary pause in its decline, but foreclosures are only being slowed because the banks have too many properties already in their greedy, little hands. They are taking massive losses on a daily basis, but accounting rules manage to hide most of the sins.
As with the slow grind down from October 2007 to September 2008, this stock market decline will not be sudden, thanks to the internal workings of the government agents. It will be slow, because, according to the powers that be, that's better for the American public. Everything must revolve around the election cycle, another crooked enterprise.
Dow 10,868.12, -58.65 (0.54%)
NASDAQ 2,402.29, -21.96 (0.91%)
S&P 500 1,165.87, -7.73 (0.66%)
NYSE Composite 7,258.02, -79.23 (1.08%)
Declining issues beat down advancers, 5100-1510, better than 3:1. New highs bettered new lows by the slimmest margin in over a year, 151-133. When that indicator rolls over, you will know that the rout is on. With the levels so close, now would be a good time to liquidate large portions of your portfolio, because there may little left if you think you can ride the market down or actually believe that "things are getting better."
Volume was at or near its highest level of the year, due, no doubt, to the incredible amount of shares which had to be bought and sold to bring the market back from its early depths.
NYSE Volume 7,701,488,000.00
NASDAQ Volume 2,980,217,000.00
Commodities also turned higher after an early sell-off, though nothing could save the crude oil futures from slipping another $2.77, to $79.97. Just a few days ago, crude was selling for $86/barrel. It's the one hopeful element from deflation at work - food and fuel should become much more affordable.
Gold got a bit of a boost, for reasons unknown, gaining $6.00, to $1,174.60. Silver was beaten down again, dropping 31 cents, to $17.51.
Markets may take a breather on Thursday, though there is the chance that many traders will opt to get out of the way of Friday's non-farm payroll report. Also, there are major elections in Europe over the weekend, so holding for Monday might not be the most-favored play.
Make no doubt about it. Europe is already in tatters. Great Britain is on the brink along with Portugal, Italy, Ireland, Spain, and, of course, Greece, the poster child for socialism's demise. US policy-makers continue down the European path in many regards, especially in terms of public entitlements, unfunded liabilities and rampant, unpayable debt.
Sooner or later, these issues must be addressed. Spending our way out of the mess we're has been already amply proven to be a failed element of Keynesian economics.
Almost forgot: there's a small problem off the southern US coast. Something about an oil leak...
When the markets opened at 9:30 am in New York, the flood of news could not have been more distressing. Three bank employees lost their lives in Greece, where government employees and other activists openly clashed with police (see video below). European markets were suffering intense losses, ranging between 1.28% (Great Britain) and 3.16% (Greece).
Here in the US, the precursor to the government's monthly non-farm payroll report (due out Friday morning), the monthly ADP private sector employment report [PDF] showed little progress for the month of April, with a mere 32,000 new jobs being created, hardly the kind of news investors are seeking. Hiring simply has not materialized, no matter how many times President Obama says, "we're making progress," or the news media hoists up another flag for economic recovery.
Stock futures trended deeply lower prior to the opening bell, with bond yields falling fast and the US dollar strengthening against the Euro, in particular. Once the trading was underway, stocks were slammed, with the Dow down 107 points in the opening minutes of trade and the NASDAQ falling 42 points, piercing its 50-day moving average.
Apparently, this kind of rational market reaction to bad news was too much for our intrepid clandestine market riggers - the Plunge Protection Team (PPT) - which swung into action less than 15 minutes after the open. Suddenly, markets around the globe began to turn. All of the major indices headed higher, with the Dow actually registering positive numbers by midday.
Eventually, all of the major indices closed at or below their respective 50-day MAs, but that was after the PPT made certain that small investors were skewered and the major banks and financial firms didn't suffer too badly. The government, the media and the Wall Street elite have a vested interest in glad-handing everybody and spreading as much cheer as possible, no matter how bad the economy is. Not only is there a great deal of money at risk, but for the politicians and financiers, their jobs might be lost if the truth be set loose upon the American public.
The downturn is in full force, whether the undercover lever-pullers like it or not. They've been throwing wads of money - in the billions and trillions of dollars - at the economy, with no discernible results. No new jobs are being created and, despite the glowing reports from Wall Street firms, the American middle class is going down the tubes in a very big hurry.
Residential real estate has experienced a momentary pause in its decline, but foreclosures are only being slowed because the banks have too many properties already in their greedy, little hands. They are taking massive losses on a daily basis, but accounting rules manage to hide most of the sins.
As with the slow grind down from October 2007 to September 2008, this stock market decline will not be sudden, thanks to the internal workings of the government agents. It will be slow, because, according to the powers that be, that's better for the American public. Everything must revolve around the election cycle, another crooked enterprise.
Dow 10,868.12, -58.65 (0.54%)
NASDAQ 2,402.29, -21.96 (0.91%)
S&P 500 1,165.87, -7.73 (0.66%)
NYSE Composite 7,258.02, -79.23 (1.08%)
Declining issues beat down advancers, 5100-1510, better than 3:1. New highs bettered new lows by the slimmest margin in over a year, 151-133. When that indicator rolls over, you will know that the rout is on. With the levels so close, now would be a good time to liquidate large portions of your portfolio, because there may little left if you think you can ride the market down or actually believe that "things are getting better."
Volume was at or near its highest level of the year, due, no doubt, to the incredible amount of shares which had to be bought and sold to bring the market back from its early depths.
NYSE Volume 7,701,488,000.00
NASDAQ Volume 2,980,217,000.00
Commodities also turned higher after an early sell-off, though nothing could save the crude oil futures from slipping another $2.77, to $79.97. Just a few days ago, crude was selling for $86/barrel. It's the one hopeful element from deflation at work - food and fuel should become much more affordable.
Gold got a bit of a boost, for reasons unknown, gaining $6.00, to $1,174.60. Silver was beaten down again, dropping 31 cents, to $17.51.
Markets may take a breather on Thursday, though there is the chance that many traders will opt to get out of the way of Friday's non-farm payroll report. Also, there are major elections in Europe over the weekend, so holding for Monday might not be the most-favored play.
Make no doubt about it. Europe is already in tatters. Great Britain is on the brink along with Portugal, Italy, Ireland, Spain, and, of course, Greece, the poster child for socialism's demise. US policy-makers continue down the European path in many regards, especially in terms of public entitlements, unfunded liabilities and rampant, unpayable debt.
Sooner or later, these issues must be addressed. Spending our way out of the mess we're has been already amply proven to be a failed element of Keynesian economics.
Almost forgot: there's a small problem off the southern US coast. Something about an oil leak...
Wednesday, March 31, 2010
Employment Data Bangs Stocks
People in the Bronx were probably wondering what that sound was right about 8:15 am, emanating from the financial district across the East River. It was the collective groans of investors heard upon the release of this morning's ADP Private Employment Report [PDF] for March.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
The private data compiled by the experts at ADP should be held in much higher regard than the government's overworked and over-adjusted non farms payroll data, though it is not. Too many people have come to the erroneous conclusion that the government data is reliable, when nothing could be further from the truth. ADP, which, unlike the government, has no agenda to promote, offers a clear view of who's hiring, who isn't and in which sectors jobs are either gaining or losing.
This morning's report showed a decline of 23,000 jobs from February to March, and also revised February's loss from 20,000 to 24,000. So, the company has reported a total of 47,000 job losses in the private sector over the past two months.
And we're supposed to be in a recovery. The pundits and promoters on CNBC and in the financial press will tell you that employment is a lagging indicator, but believing in this kind of lag is getting a little bit old, so to speak. The economy "officially" turned the corner out of recession in the third quarter of 2009 (Remember "cash for clunkers?"), so, according to the usually suspect "experts", the US began growing again in July of 2009 and has continued to accelerate, or so we're led to believe.
Third Quarter 2009 GDP, according to the final estimate provided by the BLS, was up 2.2%, and the 4th quarter was up by even more, something on the order of 5.6%, again, according to official government estimates, which begs the question of how an "estimate" can ever be deemed "official."
In any case, it's now been 9 full months since the economy began to "recover,' but nowhere are there new jobs to be found, accentuated by today's ADP report. Many investors are still not going to be convinced that the economy isn't growing until the government data is released on Friday, which happens to be the Christian holiday of Good Friday, thus, the markets will be closed as is the tradition.
Now, when the government comes out with its data, expected to show an increase of anywhere from 75,000 to 300,000 jobs, the real story will be underneath the headline number and it will say that most of the new jobs were temporary Census jobs which will end in August. So, the big question for tomorrow is whether investors will come to their senses and realize that the March jobs number is, in reality, going to be pretty much a stinker, and get out of he way of the coming sell-a-thon, or will they stand fast, close ranks and defend their stakes in corporate America?
The answer will be provided within the next 24 hours, but I'm betting, based on today's down-up-down pattern, that stocks won't be affected too badly, only because our insider friends at Goldman Sachs, JP Morgan, Merrill Lynch and Citigroup will be there to backstop any precipitous decline, to say nothing of the clandestine work of the PPP.
It should be fun to watch, but, the truth of the matter is that jobs aren't gaining, and 9 months is an awful long LAG, somewhat unbelievable.
Dow 10,856.63, -50.79 (0.47%)
NASDAQ 2,397.96, -12.73 (0.53%)
S&P 500 1,169.43, -3.84 (0.33%)
NYSE Composite 7,447.80, -12.92 (0.17%)
Declining issues laid all over advancers, 3885-2575. New highs: 337; new lows: 52. Nothing unusual there, but volume was a bit higher than normal, an ominous sign for the Bulls.
NYSE Volume 5,221,368,500
NASDAQ Volume 2,398,859,000
Commodity traders may be in an even deeper state of denial than equity traders. Oil for May delivery rose another $1.39 today, to $83.76. Gold gained $8.80, to $1,113.30 and silver was up 20 cents, to $17.51.
This is where it gets tricky. The dollar index was down pretty sharply on the jobs report, which pushed commodity prices higher, though it's a fool's trade, because there's simply slack demand, no inflation and therefore, all asset classes should be discounted, not appreciated. The US dollar will rise and fall in the currency markets for a boatload of different reasons, most of them speculative, but the deflationary spiral continues unabated.
For a better perspective, US treasury bonds offer some clues, as they were driven higher today, pushing down yields, a natural occurrence following a weak economic report. The bond market is screaming double-dip, while the commodity and equity markets - which require much less discipline - are still lining up on the side of economic recovery. They both can't be right, and the smart money would side with the bond sellers, who must demand more in a weakened situation.
The US is in better shape than Europe, though not by much. Probably the best places outside the US to put money to work would be Brazil or India, whose economies at somewhat detached from the US-Europe-China triad.
Friday, March 5, 2010
Snow Job
After hearing all week long how the major Northeast snowstorms in February were going to impact the non-farm payroll number, the group that compiles the data, the Bureau of Labor Statistics, flatly denied that the snowstorms materially affected their data in any meaningful way. They even issued a small note at the end of their report clarifying the situation.
What this shows is how little so-called "experts" understand the mechanics of survey data, especially one so widely distributed and followed. Some of these now-disgraced pundits were calling for job losses in the range of 150-200,000. Once again, what passes for economic knowledge and analysis in the age of instant everything is little more than 3rd grade nonsense.
When the BLS did release their report at the appointed time of 8:30 am, they showed the US losing 36,000 jobs for the month of February. Immediately, broker's phones were ringing off their hooks with orders to buy, buy, buy, and that's how the day went, as the media-driven stock markets posted one of the best gains of the year, boosting all major indices well into positive territory for the year.
Even more amusing than the 36,000 job loss being hailed as a positive development was the wild revisionism throughout the media complex. Even sites such as Yahoo Finance and briefing.com changed their outlooks during the week, lowering expectations in advance of snow-related data. Expectations went from losses of 35,000 jobs on Monday all the way to -120,000 on Thursday and Friday. Supposedly, they may have appeared smarter had they just kept their predictions alone.
As the day wore on, the 36,000 decline in employment was being laughably hailed as another sign of recovery. The inverse is probably correct in this case, however. The numbers are going nowhere or actually in reverse. With January revised downward from 20,000 to 26,000 jobs eliminated, today's figure was just more of the same, only worse. But, as Wall Street and their media playfellows insist, any economic data is cause for a party, and party they did.
Dow 10,566.20, +122.06 (1.17%)
NASDAQ 2,326.35, +34.04 (1.48%)
S&P 500 1,138.69, +15.72 (1.40%)
NYSE Composite 7,291.06, +117.99 (1.64%)
Advancers beat back decliners by a healthy margin in a broad-based advance, 5315-1253. New highs punished new lows, 804-56, a margin of magnitude not seen since late summer. Volume, however, continues to lag. Participation in the market remains subdued, a troubling sign for the permanent bulls.
NYSE Volume 4,769,908,000
NASDAQ Volume 2,309,856,750
Commodities were split, though oil continued its amazing ascent, gaining $1.57 per barrel, to $81.78, its highest level in two months. Gold added $4.40, to $1,137.50. Silver was likewise ahead by 21 cents, to $17.39.
All indices were up for the week, putting the scorecard for weekly gains and losses at 4 up and 5 down.
How the markets manage to add to their recent gains is a very good question. Mostly, smoke and mirrors, rather than reasoned analysis will lend much of the punditry to express bullish sentiments on stocks and the economy in general. Apparently, all of the issues that were causing problems, like home foreclosures, unemployment, debt destruction, unfunded liabilities and growing government deficits are now being handled by the powers that be, the very same people who caused them in the first place.
Faith, usually reserved for deities, has now been transferred to the likes of Ben Bernanke, Barney Frank and Lloyd Blankfein. At least in Blankfein's case, he admits to doing "God's work," in his own words. The others are simply liars and/or hypocrites.
The faithful are being led somewhere, though the final destination is as yet unknown. I'll make a small wager that any move to the upside could be the beginning of the mother of all sucker rallies. Stocks appear to be if not at least fairly valued, over-valued. Recovery has been priced into every equity being traded, the perfect recipe for a bear attack. It may come at any time, or months from now, but the prospects for a full, robust recovery are still clouded by bailouts, Fed intervention, and a media with marching orders to sound the "all clear" alert.
What this shows is how little so-called "experts" understand the mechanics of survey data, especially one so widely distributed and followed. Some of these now-disgraced pundits were calling for job losses in the range of 150-200,000. Once again, what passes for economic knowledge and analysis in the age of instant everything is little more than 3rd grade nonsense.
When the BLS did release their report at the appointed time of 8:30 am, they showed the US losing 36,000 jobs for the month of February. Immediately, broker's phones were ringing off their hooks with orders to buy, buy, buy, and that's how the day went, as the media-driven stock markets posted one of the best gains of the year, boosting all major indices well into positive territory for the year.
Even more amusing than the 36,000 job loss being hailed as a positive development was the wild revisionism throughout the media complex. Even sites such as Yahoo Finance and briefing.com changed their outlooks during the week, lowering expectations in advance of snow-related data. Expectations went from losses of 35,000 jobs on Monday all the way to -120,000 on Thursday and Friday. Supposedly, they may have appeared smarter had they just kept their predictions alone.
As the day wore on, the 36,000 decline in employment was being laughably hailed as another sign of recovery. The inverse is probably correct in this case, however. The numbers are going nowhere or actually in reverse. With January revised downward from 20,000 to 26,000 jobs eliminated, today's figure was just more of the same, only worse. But, as Wall Street and their media playfellows insist, any economic data is cause for a party, and party they did.
Dow 10,566.20, +122.06 (1.17%)
NASDAQ 2,326.35, +34.04 (1.48%)
S&P 500 1,138.69, +15.72 (1.40%)
NYSE Composite 7,291.06, +117.99 (1.64%)
Advancers beat back decliners by a healthy margin in a broad-based advance, 5315-1253. New highs punished new lows, 804-56, a margin of magnitude not seen since late summer. Volume, however, continues to lag. Participation in the market remains subdued, a troubling sign for the permanent bulls.
NYSE Volume 4,769,908,000
NASDAQ Volume 2,309,856,750
Commodities were split, though oil continued its amazing ascent, gaining $1.57 per barrel, to $81.78, its highest level in two months. Gold added $4.40, to $1,137.50. Silver was likewise ahead by 21 cents, to $17.39.
All indices were up for the week, putting the scorecard for weekly gains and losses at 4 up and 5 down.
How the markets manage to add to their recent gains is a very good question. Mostly, smoke and mirrors, rather than reasoned analysis will lend much of the punditry to express bullish sentiments on stocks and the economy in general. Apparently, all of the issues that were causing problems, like home foreclosures, unemployment, debt destruction, unfunded liabilities and growing government deficits are now being handled by the powers that be, the very same people who caused them in the first place.
Faith, usually reserved for deities, has now been transferred to the likes of Ben Bernanke, Barney Frank and Lloyd Blankfein. At least in Blankfein's case, he admits to doing "God's work," in his own words. The others are simply liars and/or hypocrites.
The faithful are being led somewhere, though the final destination is as yet unknown. I'll make a small wager that any move to the upside could be the beginning of the mother of all sucker rallies. Stocks appear to be if not at least fairly valued, over-valued. Recovery has been priced into every equity being traded, the perfect recipe for a bear attack. It may come at any time, or months from now, but the prospects for a full, robust recovery are still clouded by bailouts, Fed intervention, and a media with marching orders to sound the "all clear" alert.
Monday, February 1, 2010
My Open Letter to Senator Charles Schumer
I've been trying (in vain) to find the bill which helped me in 1983-84 hire a young woman as an advertising sales executive for what was then my fledgling newspaper, Downtown Magazine.
I was able to determine that it must have been part of the 1983 Emergency Employment Act, but little else, so, upon hearing that Senator Schumer and others were going to propose another "tax credit" type bill in coming days, I decided to query New York's senior Senator. The text of my message appears below:
------------------------------
Dear Senator Schumer,
Please have somebody on your staff research the 1983 Emergency Employment Act. I ask that you do this because I believe I was an employer who received great benefit from the implementation of one of the programs.
I had started up a newspaper in Rochester, NY in 1982 and it was just beginning to turn a small profit in '83. I don't recall the specific agency, but, if my memory serves correct, the deal was that if I hired an unemployed person - and I did - the government (it may have been NY State or the US) agreed to pay half of the wages for a period of time - I believe it was six months.
This was a great program and allowed me to hire a young woman to sell advertising for my newspaper. She and I both benefitted. She got a job and I got half of my money back over the first six months of her employment.
It was a pretty nice, simple arrangement. All I had to do was pay her on time, submit proof of payment (and all taxes and withholding was paid by me) once a month, and the agency cut me a check for half of her gross pay.
Now, I believe that this kind of program would get people back to work in a hurry, especially if targeted at small businesses with less than 10 employees, or some other similar threshold. It worked for me, and, incidentally, the woman worked for me for a few more years after that initial six months, so the job was not "make work," but real, productive employment.
It is my firm conviction that the federal government has not done enough for small business during this financial downturn, and that a jobs bill that actually puts money into the hands of employers, rather than shadowy tax breaks or credits, offers the true path to recovery.
My belief is that small businesses, which create 75-90% of all jobs in this country, can do what Wall Street, the Fed, Treasury and congress have been unable to do, but, we need some help and some time in which to do so.
I trust that you and your staff will give this matter serious consideration. I am going to publish this entire communication on my blog,
http://moneydaily.blogspot.com
so, I expect a positive response. Please, stop the pandering and posturing and propose a jobs bill that works from the bottom up.
Thank you,
Rick Gagliano
Publisher, Downtown Magazine (dtmagazine.com)
Money Daily
I was able to determine that it must have been part of the 1983 Emergency Employment Act, but little else, so, upon hearing that Senator Schumer and others were going to propose another "tax credit" type bill in coming days, I decided to query New York's senior Senator. The text of my message appears below:
------------------------------
Dear Senator Schumer,
Please have somebody on your staff research the 1983 Emergency Employment Act. I ask that you do this because I believe I was an employer who received great benefit from the implementation of one of the programs.
I had started up a newspaper in Rochester, NY in 1982 and it was just beginning to turn a small profit in '83. I don't recall the specific agency, but, if my memory serves correct, the deal was that if I hired an unemployed person - and I did - the government (it may have been NY State or the US) agreed to pay half of the wages for a period of time - I believe it was six months.
This was a great program and allowed me to hire a young woman to sell advertising for my newspaper. She and I both benefitted. She got a job and I got half of my money back over the first six months of her employment.
It was a pretty nice, simple arrangement. All I had to do was pay her on time, submit proof of payment (and all taxes and withholding was paid by me) once a month, and the agency cut me a check for half of her gross pay.
Now, I believe that this kind of program would get people back to work in a hurry, especially if targeted at small businesses with less than 10 employees, or some other similar threshold. It worked for me, and, incidentally, the woman worked for me for a few more years after that initial six months, so the job was not "make work," but real, productive employment.
It is my firm conviction that the federal government has not done enough for small business during this financial downturn, and that a jobs bill that actually puts money into the hands of employers, rather than shadowy tax breaks or credits, offers the true path to recovery.
My belief is that small businesses, which create 75-90% of all jobs in this country, can do what Wall Street, the Fed, Treasury and congress have been unable to do, but, we need some help and some time in which to do so.
I trust that you and your staff will give this matter serious consideration. I am going to publish this entire communication on my blog,
http://moneydaily.blogspot.com
so, I expect a positive response. Please, stop the pandering and posturing and propose a jobs bill that works from the bottom up.
Thank you,
Rick Gagliano
Publisher, Downtown Magazine (dtmagazine.com)
Money Daily
Friday, June 5, 2009
Jobs Data Improving, But Stocks Fail to Gain
At the release of May's non-farm payroll data from the Labor Department, stock futures rose dramatically, as the government said 345,000 job losses occurred in May. Most analysts were looking for a loss of about 520,000, so the improvement was substantial and the futures trade spilled over into the open, with stocks sharply higher in the opening minutes.
Just about 10 minutes into the session, though, something odd happened. Stocks lost their momentum and before 10:00 am, all of the indices were trading in the red. For the remainder of the session, the various indices either stayed marginally positive (the Dow), hugged the flat line (NASDAQ and S&P) or remained in the red (NYSE Comp.).
By 2:00 pm, the bloom was off the rose, and the expected rally on "real" good economic news, instead of the media-spun variety, never materialized. Stocks generally slumped when they should have been soaring.
The mainstream and financial media will attempt to put some kind of cover story on how the numbers were "already discounted" or some other rubbish, but let's allow for some degree of inside baseball (manipulation) as the true explanation. If one examines the timeline between the March 9 bottom and today, it's fairly evident what has occurred. The banks, through their brokerage arms, which received government money through TARP and other lending facilities - B of A, Citi, Goldman, JP Morgan, et. al. - pumped the markets back to life, and, not satisfied with a reasonable rebound of 15-20%, extended gains to the 35-39% range, all of this based on media innuendo, fudged accounting and hopes pinned on stress test results.
Now, when there is actual positive news on unemployment, the banksters find themselves in a topped out position. Further gains would seem frothy, despite the good news, so they are nakedly doing what every chiseling, cheating, Ponzi player would: they are dumping stocks at inflated prices back to the rabble. The whole process has been very untidy and wholly opaque. Fewer words of truth have ever been spoken around Wall Street than during the past three months. Big money is bailing, taking profits and heading to the sidelines and the Hamptons while the rest of the market hammers out the details over the summer.
Investors had best pay close attention next week and especially the trading week of June 15-19, when June options expire. There are likely large put positions already staked out by the large money players. The markets remain remarkably overbought and poised for a move in one direction or the other. With 2nd quarter earnings season still more than a month off, the chances are good that some external event will precipitate a trundle to the downside.
Dow 8,763.13, +12.89 (0.15%)
NASDAQ 1,849.42, -0.60 (0.03%)
S&P 500 940.09, -2.37 (0.25%)
NYSE Composite 6,082.64, -28.12 (0.46%)
In deference to the flat headline numbers, declining issues far outpaced advancers, 3408-2908. New lows vs. new highs remains at a crossroads, with the new highs a narrow winner, 91-87. Volume was pathetic, so, once again, it's influence as an indicator is marginal.
NYSE Volume 1,261,973,000
NASDAQ Volume 2,333,721,000
Commodities spent the majority of the day in the red. Oil backed off 37 cents, to $68.44, though gold saw a much larger decline, down $19.70, to $962.60, backing far away from the magic $1000 level. Silver tracked along the same path, losing 51 cents, to $15.39 the ounce. Its difficult to get a handle on commodity trading with so much speculation going on, but there are small indications that the general deflationary environment is keeping a lid on prices, for now. How that plays out a year or two down the road is also very uncertain.
Stocks still showed another positive week, despite the sleepy results of Friday. Next week may very well show more liquidation in equity positions and consolidation, otherwise known as profit-taking. It bears watching,
Just about 10 minutes into the session, though, something odd happened. Stocks lost their momentum and before 10:00 am, all of the indices were trading in the red. For the remainder of the session, the various indices either stayed marginally positive (the Dow), hugged the flat line (NASDAQ and S&P) or remained in the red (NYSE Comp.).
By 2:00 pm, the bloom was off the rose, and the expected rally on "real" good economic news, instead of the media-spun variety, never materialized. Stocks generally slumped when they should have been soaring.
The mainstream and financial media will attempt to put some kind of cover story on how the numbers were "already discounted" or some other rubbish, but let's allow for some degree of inside baseball (manipulation) as the true explanation. If one examines the timeline between the March 9 bottom and today, it's fairly evident what has occurred. The banks, through their brokerage arms, which received government money through TARP and other lending facilities - B of A, Citi, Goldman, JP Morgan, et. al. - pumped the markets back to life, and, not satisfied with a reasonable rebound of 15-20%, extended gains to the 35-39% range, all of this based on media innuendo, fudged accounting and hopes pinned on stress test results.
Now, when there is actual positive news on unemployment, the banksters find themselves in a topped out position. Further gains would seem frothy, despite the good news, so they are nakedly doing what every chiseling, cheating, Ponzi player would: they are dumping stocks at inflated prices back to the rabble. The whole process has been very untidy and wholly opaque. Fewer words of truth have ever been spoken around Wall Street than during the past three months. Big money is bailing, taking profits and heading to the sidelines and the Hamptons while the rest of the market hammers out the details over the summer.
Investors had best pay close attention next week and especially the trading week of June 15-19, when June options expire. There are likely large put positions already staked out by the large money players. The markets remain remarkably overbought and poised for a move in one direction or the other. With 2nd quarter earnings season still more than a month off, the chances are good that some external event will precipitate a trundle to the downside.
Dow 8,763.13, +12.89 (0.15%)
NASDAQ 1,849.42, -0.60 (0.03%)
S&P 500 940.09, -2.37 (0.25%)
NYSE Composite 6,082.64, -28.12 (0.46%)
In deference to the flat headline numbers, declining issues far outpaced advancers, 3408-2908. New lows vs. new highs remains at a crossroads, with the new highs a narrow winner, 91-87. Volume was pathetic, so, once again, it's influence as an indicator is marginal.
NYSE Volume 1,261,973,000
NASDAQ Volume 2,333,721,000
Commodities spent the majority of the day in the red. Oil backed off 37 cents, to $68.44, though gold saw a much larger decline, down $19.70, to $962.60, backing far away from the magic $1000 level. Silver tracked along the same path, losing 51 cents, to $15.39 the ounce. Its difficult to get a handle on commodity trading with so much speculation going on, but there are small indications that the general deflationary environment is keeping a lid on prices, for now. How that plays out a year or two down the road is also very uncertain.
Stocks still showed another positive week, despite the sleepy results of Friday. Next week may very well show more liquidation in equity positions and consolidation, otherwise known as profit-taking. It bears watching,
Friday, March 6, 2009
Late Rally Saves Dow, S&P; NASDAQ Lower
Bed news for investors continued today, as the BLS released the Non-farms labor report for February, showing the nation lost another 651,000 jobs over the period. The Bureau also revised December and January figures even lower and boosted the official jobless rate to 8.1%, a further blow to confidence.
After gaining initially, the major indices soon feel into the red again, and stayed down most of the session, which was one of the more lackluster of recent vintage. At the end of the day, stocks rallied on a combination of short-covering, staking out of positions and a general oversold condition. It was not enough, however, to prevent the indices from falling for the 8th week out of nine so far in 2009.
Dow 6,626.94, +32.50 (0.49%)
NASDAQ 1,293.85, -5.74 (0.44%)
S&P 500 683.38, +0.83 (0.12%)
NYSE Composite 4,284.49, +16.89 (0.40%)
The Dow ended the session with 16 components up and 14 down, in line with the moderately higher closing figures.
Declining issues outweighed advancers, 3786-2782, so the buying which produced the gains was quite selective. New lows tallied 1684, to a mere 8 new highs. The disparity in the lows-highs this week has been the widest since the collapse back in the September-November wipeout of 2008. Volume was the among the highest of the week, indicating that there are still those who believe the worst is not over, and, alternately, a large share of bargain hunting.
NYSE Volume 1,771,049,000
NASDAQ Volume 2,489,014,000
Commodities were generally up, with oil gaining $1.91, to $45.52. Gold gained $14.90, recovering some of the ground lost over the past week's profit taking, to $942.70. Silver remained strong, adding 21 cents, to $13.33.
The late-day rally in stocks sets up an intriguing scenario for next week. In the absence of earnings reports from companies, the market will continue to focus on economic numbers and outside events.
Surely, employment will still be in focus. Any large-scale layoffs might spook already exhausted sellers, though if the news is more benign (and just about everyone believes the bad news has to take a break at some point), it could spark a fairly sharp rally. The global economy hasn't completely fallen off the cliff, so there are pockets of hope and some very attractive prices in stocks.
If anything, the market is more than overdue for a multi-week bounce to the upside. Of course, by April, the banks may be reporting the results of their government-sponsored "stress tests" and that should put the kibosh on any gains.
Sentiment remains stoic and bearish, but traders being the aggressive beasts they are, 1000 points to the upside in short order is not out of the question at this juncture.
After gaining initially, the major indices soon feel into the red again, and stayed down most of the session, which was one of the more lackluster of recent vintage. At the end of the day, stocks rallied on a combination of short-covering, staking out of positions and a general oversold condition. It was not enough, however, to prevent the indices from falling for the 8th week out of nine so far in 2009.
Dow 6,626.94, +32.50 (0.49%)
NASDAQ 1,293.85, -5.74 (0.44%)
S&P 500 683.38, +0.83 (0.12%)
NYSE Composite 4,284.49, +16.89 (0.40%)
The Dow ended the session with 16 components up and 14 down, in line with the moderately higher closing figures.
Declining issues outweighed advancers, 3786-2782, so the buying which produced the gains was quite selective. New lows tallied 1684, to a mere 8 new highs. The disparity in the lows-highs this week has been the widest since the collapse back in the September-November wipeout of 2008. Volume was the among the highest of the week, indicating that there are still those who believe the worst is not over, and, alternately, a large share of bargain hunting.
NYSE Volume 1,771,049,000
NASDAQ Volume 2,489,014,000
Commodities were generally up, with oil gaining $1.91, to $45.52. Gold gained $14.90, recovering some of the ground lost over the past week's profit taking, to $942.70. Silver remained strong, adding 21 cents, to $13.33.
The late-day rally in stocks sets up an intriguing scenario for next week. In the absence of earnings reports from companies, the market will continue to focus on economic numbers and outside events.
Surely, employment will still be in focus. Any large-scale layoffs might spook already exhausted sellers, though if the news is more benign (and just about everyone believes the bad news has to take a break at some point), it could spark a fairly sharp rally. The global economy hasn't completely fallen off the cliff, so there are pockets of hope and some very attractive prices in stocks.
If anything, the market is more than overdue for a multi-week bounce to the upside. Of course, by April, the banks may be reporting the results of their government-sponsored "stress tests" and that should put the kibosh on any gains.
Sentiment remains stoic and bearish, but traders being the aggressive beasts they are, 1000 points to the upside in short order is not out of the question at this juncture.
Wednesday, March 4, 2009
Bargain Hunters and Bottom Fishers
After a rocky start, US stock indices finally put in a day of solid gains, thanks in large part from the seemingly never-ending supply of optimists seeking bargains after stocks plunge to new lows.
By no means is the recession or the drumbeat of downbeat economic news subsiding. In fact, this latest round of selling - pushing to Dow, S&P and NYSE Comp. to 12-year lows - was possibly the most brutal and merciless yet. Even today, the news was decidedly bad. The ADP Employment Report for February showed that another 697,000 private sector jobs were lost in the month of February. In the good-producing sector, it was the 26th consecutive month of US job losses; manufacturing fell for the 36th straight month, according to the firm.
Inside ADP's numbers was an alarming revelation: that most of the losses were from medium and small firms employing less than 500 individuals. The takeaway was that job-chopping by major firms has peaked, but now the recession is spreading down to smaller firms, even to the very mom-and-pop type small businesses that are the backbone of the economy.
For Wall Street, those figures, coupled with an oversold condition in the market, provided enough of a green light to let the bargain hunters loose, boosting stocks in an overdue, broad rally. At 2:00 pm, the Fed released the Beige Book, an anecdotal accounting which showed economic conditions deteriorating across all 12 regions.
That didn't dampen the mood much, until late in the session, when the Dow shed nearly 100 points in the last 20 minutes of trading.
As the Dow goes, it came just short of the new psychological barrier at 7000, paused and then fell away. That late-day downturn is surely cause for concern going forward, though if the 7000 level is breached, there's not much in the way of resistance until the 8000 level, so the opportunity for a short-term rally exists over the next four to six weeks.
Of course, there are still hurdles to overcome, and the chance that another bank may blow up or some other circumstance contribute to the overall malaise is paramount.
Dow 6,875.84, +149.82 (2.23%)
NASDAQ 1,353.74, +32.73 (2.48%)
S&P 500 712.87, +16.54 (2.38%)
NYSE Composite 4,464.89, +130.19 (3.00%)
Twenty-five of thirty Dow components sported gains, but the five which suffered losses revealed quite a bit about the overall tone of trading. Bank of America (BAC), Citigroup (C), American Express (AXP), General Electric (GE) and JP Morgan Chase (JPM) all have one thing in common. They are either banks or substantially tied to finance in their business operations. JPM took the biggest hit of all, down 8.14%, closing at 19.30, -1.71. The major banks still have unresolved issues and most of them relate back to derivatives and credit default swaps in the black hole of AIG.
Market internals were largely in line with the closing numbers. Advancers clobbered losers for the first time in over a week, 4955-1639. New lows moderated back to 676, though only three (3) stocks reached new highs. Volume remained at the elevated levels of the past week.
NYSE Volume 1,796,873,000
NASDAQ Volume 2,349,450,000
Oil ramped up on news of a surprise drawdown in US supply. Crude futures for April delivery gained $3.73, to $45.38. Gold continued losing, down another $6.90, to $906.70. Gold has lost nearly $100 in just over a week's time. Silver fared better (somebody is obviously taking my advice), gaining 20 cents to $12.92, still bargain territory (under $13 per ounce).
Optimism was abundantly everywhere. All commodity prices were up sharply with the notable exception of gold. This is likely an aberration, as is the stock market move, though there is a technical set-up for a short term bounce.
Stay tuned.
By no means is the recession or the drumbeat of downbeat economic news subsiding. In fact, this latest round of selling - pushing to Dow, S&P and NYSE Comp. to 12-year lows - was possibly the most brutal and merciless yet. Even today, the news was decidedly bad. The ADP Employment Report for February showed that another 697,000 private sector jobs were lost in the month of February. In the good-producing sector, it was the 26th consecutive month of US job losses; manufacturing fell for the 36th straight month, according to the firm.
Inside ADP's numbers was an alarming revelation: that most of the losses were from medium and small firms employing less than 500 individuals. The takeaway was that job-chopping by major firms has peaked, but now the recession is spreading down to smaller firms, even to the very mom-and-pop type small businesses that are the backbone of the economy.
For Wall Street, those figures, coupled with an oversold condition in the market, provided enough of a green light to let the bargain hunters loose, boosting stocks in an overdue, broad rally. At 2:00 pm, the Fed released the Beige Book, an anecdotal accounting which showed economic conditions deteriorating across all 12 regions.
That didn't dampen the mood much, until late in the session, when the Dow shed nearly 100 points in the last 20 minutes of trading.
As the Dow goes, it came just short of the new psychological barrier at 7000, paused and then fell away. That late-day downturn is surely cause for concern going forward, though if the 7000 level is breached, there's not much in the way of resistance until the 8000 level, so the opportunity for a short-term rally exists over the next four to six weeks.
Of course, there are still hurdles to overcome, and the chance that another bank may blow up or some other circumstance contribute to the overall malaise is paramount.
Dow 6,875.84, +149.82 (2.23%)
NASDAQ 1,353.74, +32.73 (2.48%)
S&P 500 712.87, +16.54 (2.38%)
NYSE Composite 4,464.89, +130.19 (3.00%)
Twenty-five of thirty Dow components sported gains, but the five which suffered losses revealed quite a bit about the overall tone of trading. Bank of America (BAC), Citigroup (C), American Express (AXP), General Electric (GE) and JP Morgan Chase (JPM) all have one thing in common. They are either banks or substantially tied to finance in their business operations. JPM took the biggest hit of all, down 8.14%, closing at 19.30, -1.71. The major banks still have unresolved issues and most of them relate back to derivatives and credit default swaps in the black hole of AIG.
Market internals were largely in line with the closing numbers. Advancers clobbered losers for the first time in over a week, 4955-1639. New lows moderated back to 676, though only three (3) stocks reached new highs. Volume remained at the elevated levels of the past week.
NYSE Volume 1,796,873,000
NASDAQ Volume 2,349,450,000
Oil ramped up on news of a surprise drawdown in US supply. Crude futures for April delivery gained $3.73, to $45.38. Gold continued losing, down another $6.90, to $906.70. Gold has lost nearly $100 in just over a week's time. Silver fared better (somebody is obviously taking my advice), gaining 20 cents to $12.92, still bargain territory (under $13 per ounce).
Optimism was abundantly everywhere. All commodity prices were up sharply with the notable exception of gold. This is likely an aberration, as is the stock market move, though there is a technical set-up for a short term bounce.
Stay tuned.
Friday, January 30, 2009
January Barometer Predicts Down Year
For all of the optimism associated with a 3-or-4-day winning streak (depending on the index) and a big upside day on Wednesday, it may come as somewhat of a surprise to some that the major US equity indices all ended the week with losses.
The widely-watched Dow Jones Industrial Average tacked on more losses to Thursday's massive beat-down in Friday's one-sided trade, sending the index into negative ground, down 77 points for the week. The NASDAQ fared better, down less than a point since last Friday. The S&P 500 gave back 6 points, while the NYSE Composite finished higher by a slim 0.28 points.
Were the markets stabilizing? Hardly. Investors not only had to navigate through a slew of 4th quarter and full year 2008 earnings reports, but the stew of demoralizing economic reports continued in deluge fashion. There were some hopeful signs - like the government's initial estimate of 4th quarter '08 GDP posting a decline of 3.8% (better than estimates) - but not enough to keep serious money on the sidelines or increasingly heading toward bonds and precious metals.
Dow 8,000.86, -148.15 (1.82%)
NASDAQ 1,476.42, -31.42 (2.08%)
S&P 500 825.88, -19.26 (2.28%)
NYSE Composite 5,195.83, -105.07 (1.98%)
Also, the averages are not showing any signs of making upside progress. Since the fallout of November 20, they have recovered slightly, but mostly went sideways.
This being the final trading day of January, it should come as no comfort that the January Barometer is clearly indicating a down year for stocks in 2009, with all major indices closing the month anywhere from 7 to 9% lower than they had begun. Based on the adage "as goes January, so goes the year," the January Barometer has as solid a track record as any simple indicator, with accuracy in the range of upwards of 80%, depending on which sources are cited.
The day's internals were as unappealing as the headline numbers. Declining issues outflanked advancers, 4558-1903. There were more new lows than new highs, 253-12. This is the most troubling of all indicators, due entirely to its persistence. There have been only a handful of days where this condition did not persist - i.e., more new lows than highs in the daily data - since I have been tracking it since October 31, 2007. This is a 15-month, one-sided trend that has always declared general direction.
Of course, this was the natural conclusion of a 54 or 58-week bull market from 2003-2007 - one of the longest in history - built mostly on bad investments, incompetent fiscal policy, absence of regulations and general thievery. That's why the correction has been so severe. The foundation of the previous bull was built on sand.
Volume was as strong on Friday as it was on Tuesday's 200-point Dow rally, which also is not encouraging for stocks. Not to worry, the same kind of serious correction is occurring around the globe.
NYSE Volume 1,500,684,000
NASDAQ Volume 2,108,279,000
Commodities were the place to be. Crude oil was up 24 cents, to $41.68, though natural gas futures fell to $4.39, an obviator of oversupply. Gold zipped ahead $21.90, to $928.40, a multi-week high. Silver advanced 42 cents, to $12.57, making silver no longer a bargain and possibly short-term oversold, though it may be risky to rest on that assumption.
Employment and housing continue to be the main trouble spots in the economy, and those areas are likely to continue to deteriorate until there's some real relief for the middle class in government policy, namely, immediate tax relief via relaxed withholding, though our pals in Washington don't seem to like that idea. Since asking for a government wage and spending freeze would likely be too much, I won't bother to ask for actual spending cuts. The so-called "leaders" of our age are proving to be among the most incompetent bunch in history (unless you buy the conspiracy side of the argument for "big government"), unable to manage affairs of state effectively.
The world will wait while Washington winces, whines and wails. That's unfortunate because people must move on towards an improved existence. It is the history of civilization and should not be short-circuited by failures of financial creations.
To replace the broken models of the past, new ideas must be developed .
The widely-watched Dow Jones Industrial Average tacked on more losses to Thursday's massive beat-down in Friday's one-sided trade, sending the index into negative ground, down 77 points for the week. The NASDAQ fared better, down less than a point since last Friday. The S&P 500 gave back 6 points, while the NYSE Composite finished higher by a slim 0.28 points.
Were the markets stabilizing? Hardly. Investors not only had to navigate through a slew of 4th quarter and full year 2008 earnings reports, but the stew of demoralizing economic reports continued in deluge fashion. There were some hopeful signs - like the government's initial estimate of 4th quarter '08 GDP posting a decline of 3.8% (better than estimates) - but not enough to keep serious money on the sidelines or increasingly heading toward bonds and precious metals.
Dow 8,000.86, -148.15 (1.82%)
NASDAQ 1,476.42, -31.42 (2.08%)
S&P 500 825.88, -19.26 (2.28%)
NYSE Composite 5,195.83, -105.07 (1.98%)
Also, the averages are not showing any signs of making upside progress. Since the fallout of November 20, they have recovered slightly, but mostly went sideways.
This being the final trading day of January, it should come as no comfort that the January Barometer is clearly indicating a down year for stocks in 2009, with all major indices closing the month anywhere from 7 to 9% lower than they had begun. Based on the adage "as goes January, so goes the year," the January Barometer has as solid a track record as any simple indicator, with accuracy in the range of upwards of 80%, depending on which sources are cited.
The day's internals were as unappealing as the headline numbers. Declining issues outflanked advancers, 4558-1903. There were more new lows than new highs, 253-12. This is the most troubling of all indicators, due entirely to its persistence. There have been only a handful of days where this condition did not persist - i.e., more new lows than highs in the daily data - since I have been tracking it since October 31, 2007. This is a 15-month, one-sided trend that has always declared general direction.
Of course, this was the natural conclusion of a 54 or 58-week bull market from 2003-2007 - one of the longest in history - built mostly on bad investments, incompetent fiscal policy, absence of regulations and general thievery. That's why the correction has been so severe. The foundation of the previous bull was built on sand.
Volume was as strong on Friday as it was on Tuesday's 200-point Dow rally, which also is not encouraging for stocks. Not to worry, the same kind of serious correction is occurring around the globe.
NYSE Volume 1,500,684,000
NASDAQ Volume 2,108,279,000
Commodities were the place to be. Crude oil was up 24 cents, to $41.68, though natural gas futures fell to $4.39, an obviator of oversupply. Gold zipped ahead $21.90, to $928.40, a multi-week high. Silver advanced 42 cents, to $12.57, making silver no longer a bargain and possibly short-term oversold, though it may be risky to rest on that assumption.
Employment and housing continue to be the main trouble spots in the economy, and those areas are likely to continue to deteriorate until there's some real relief for the middle class in government policy, namely, immediate tax relief via relaxed withholding, though our pals in Washington don't seem to like that idea. Since asking for a government wage and spending freeze would likely be too much, I won't bother to ask for actual spending cuts. The so-called "leaders" of our age are proving to be among the most incompetent bunch in history (unless you buy the conspiracy side of the argument for "big government"), unable to manage affairs of state effectively.
The world will wait while Washington winces, whines and wails. That's unfortunate because people must move on towards an improved existence. It is the history of civilization and should not be short-circuited by failures of financial creations.
To replace the broken models of the past, new ideas must be developed .
Thursday, January 22, 2009
Geithner Passes Committee; Housing, Unemployment Reach Records
Tim Geithner was approved by the Senate Finance Committee (guess we all can cheat on our taxes without worry now!) earlier today, as the process of confirmation as Treasury Secretary now passes to the full Senate. The AP wire lit up with the story at 12:37 pm EST, just about the same time the Dow crossed back above 8000 and started a mini-rally (by 2:15 pm, the Dow snuck past 8200).
Coincidence? I think not. Wall Street's fate is now tied to Geithner and how he and Ben Bernanke, over at the Fed, interact and respond to the ongoing obliteration of the nation's largest financial firms.
The euphoria over having one of their own (Geithner's resume is full of Wall Street, World Bank and NY Fed connections) with his hands nearly on the US Treasury quickly faded as those in the know remembered that the US government is carrying a debt load of close to $11 Trillion, so maybe Geithner won't be able to help in the long run. Shortly after 3:00 pm, the Dow was down 150 points again, and matters didn't improve much heading into the closing bell.
Dow 8,122.80, -105.30 (1.28%)
NASDAQ 1,465.49, -41.58 (2.76%)
S&P 500 827.50, -12.74 (1.52%)
NYSE Composite 5,171.74, -102.25 (1.94%)
On top of this is a growing concern over how stable the Federal Reserve is. Bearing in mind that the Fed is a private bank, albeit with deep tethers to the government, the Fed has been buying up more than its fair share of rotten assets and throwing around money like Bernie Madoff on an investor hunt.
With more and more economists and commentators openly saying that the large banking institutions are insolvent (something I and others have known and written about since 2007), reality is taking a heavy toll on investor sentiment. (I'll have much more about the Fed, the banks, the bailouts and our future in a blockbuster report tomorrow)
While the marketeers were making the most of their man being appointed to Treasury, an earnings miss and announced layoffs by Microsoft and more dismal data from the housing and employment sectors overhung the entire session, acting as the metaphorical ton of bricks weighing down all sectors.
New unemployment claims hit a level not reached since 1982, with 589,000 new applications for the week ended January 16.
New home construction and permits fell to record low levels in December, the Commerce Dept. reported.
Taken together, the news could not have been much worse, though investors are getting used to the endless stream of bad news coming out of government and private analyses. The poor earnings reports for the 4th quarter are a relatively recent add to the mix, but earnings season is getting into full swing. Google reports after the bell today. (Update: Google beat analyst expectations ($4.98), posting Non-GAAP EPS for the fourth quarter of 2008 of $5.10.)
Declining issues outweighed advancers by a wide margin, 4867-1560. New lows: 230. New highs: 12. Volume was consistent with the past few days, generally on the high side.
NYSE Volume 1,554,123,000
NASDAQ Volume 2,347,116,000
Oil finished with a 12 cent gain, closing at $43.67, though US inventories were reported 14% above last year's levels. Oil traded lower for much of the session before recovering into the close. Natural gas fell 9 cents, to $4.65. Gold gained $8.70, to $858.80; silver finished the day 4 cents to the good, at $11.37 the ounce.
A catalyst to propel the bulls has yet to emerge, though at this juncture, small bits, like Google's good report, may be enough to keep what little is left of investor confidence. Today's close on the Dow, however, was the second this week below 8149, the interim low (Dec. 1) following the November 20 collapse and bottom (7552).
The markets have traded sideways for two months running, so a betting man might be inclined to look for a change in dynamics. I make the prospects of closing below the Nov. 20 lows within a month at 70%, and a gain to 8750 in the same time frame almost nil.
Coincidence? I think not. Wall Street's fate is now tied to Geithner and how he and Ben Bernanke, over at the Fed, interact and respond to the ongoing obliteration of the nation's largest financial firms.
The euphoria over having one of their own (Geithner's resume is full of Wall Street, World Bank and NY Fed connections) with his hands nearly on the US Treasury quickly faded as those in the know remembered that the US government is carrying a debt load of close to $11 Trillion, so maybe Geithner won't be able to help in the long run. Shortly after 3:00 pm, the Dow was down 150 points again, and matters didn't improve much heading into the closing bell.
Dow 8,122.80, -105.30 (1.28%)
NASDAQ 1,465.49, -41.58 (2.76%)
S&P 500 827.50, -12.74 (1.52%)
NYSE Composite 5,171.74, -102.25 (1.94%)
On top of this is a growing concern over how stable the Federal Reserve is. Bearing in mind that the Fed is a private bank, albeit with deep tethers to the government, the Fed has been buying up more than its fair share of rotten assets and throwing around money like Bernie Madoff on an investor hunt.
With more and more economists and commentators openly saying that the large banking institutions are insolvent (something I and others have known and written about since 2007), reality is taking a heavy toll on investor sentiment. (I'll have much more about the Fed, the banks, the bailouts and our future in a blockbuster report tomorrow)
While the marketeers were making the most of their man being appointed to Treasury, an earnings miss and announced layoffs by Microsoft and more dismal data from the housing and employment sectors overhung the entire session, acting as the metaphorical ton of bricks weighing down all sectors.
New unemployment claims hit a level not reached since 1982, with 589,000 new applications for the week ended January 16.
New home construction and permits fell to record low levels in December, the Commerce Dept. reported.
Taken together, the news could not have been much worse, though investors are getting used to the endless stream of bad news coming out of government and private analyses. The poor earnings reports for the 4th quarter are a relatively recent add to the mix, but earnings season is getting into full swing. Google reports after the bell today. (Update: Google beat analyst expectations ($4.98), posting Non-GAAP EPS for the fourth quarter of 2008 of $5.10.)
Declining issues outweighed advancers by a wide margin, 4867-1560. New lows: 230. New highs: 12. Volume was consistent with the past few days, generally on the high side.
NYSE Volume 1,554,123,000
NASDAQ Volume 2,347,116,000
Oil finished with a 12 cent gain, closing at $43.67, though US inventories were reported 14% above last year's levels. Oil traded lower for much of the session before recovering into the close. Natural gas fell 9 cents, to $4.65. Gold gained $8.70, to $858.80; silver finished the day 4 cents to the good, at $11.37 the ounce.
A catalyst to propel the bulls has yet to emerge, though at this juncture, small bits, like Google's good report, may be enough to keep what little is left of investor confidence. Today's close on the Dow, however, was the second this week below 8149, the interim low (Dec. 1) following the November 20 collapse and bottom (7552).
The markets have traded sideways for two months running, so a betting man might be inclined to look for a change in dynamics. I make the prospects of closing below the Nov. 20 lows within a month at 70%, and a gain to 8750 in the same time frame almost nil.
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