Stocks continued their happy saunter through the cold of January, with the Dow Jones Industrials posting another nearly-100-point gain, thanks in large part to IBM (up 7.98 to 188.50 (+4.42%) on solid 4th quarter earnings reported after the bell Thursday), which accounted for half of the Dow's gain all by itself.
The other indices lagged far behind the Blue Chips, courtesy of Google's (GOOG) worst earnings miss in six years, reporting a profit of $2.7 billion on revenue of $10.6 billion, well below Wall Street non-GAAP estimates of $9.50 per share versus an estimate of $10.46. Whoops! Shares of the internet behemoth were down 53.58 points, a loss of better-than eight percent.
Two other tech titans - Microsoft (MSFT) and Intel (INTC) - reported excellent quarters, helping to keep the montl-long rally going. The Dow, S&P and NYSE Composite were up each of the four trading days this week; the NASDAQ fell just short, losing 1.63, despite a valiant, last-half-hour rally.
Despite the outstanding gains from the last half of December through today, there are signs of trouble, and the fact that today marked options expiry, may lead to declines next week as more companies report. With just about 20% of the S&P 500 having reported, only 55% have beaten expectations, a ten year low. The average for the past ten years has been that 62% of companies beat street estimates. Considering that the big banks have all reported already - and all of them matched or beat - this does not bode well for the bulk of reporting companies which are set to report over the next two weeks.
Meanwhile, the Dow is back at levels last seen in mid-July, today's close just missing (four points) making a six-month high. It will be interesting to see if the Dow can crack through next week and continue onward toward exceeding the 2011 high of 12810.54 made on April 29. Yes, it's getting a bit frothy. The word for next week is likely to be "overbought," as in "we're market pumping day-traders who don't give a hoot about fundamentals, just making a profit."
So far, the advance-decline and new highs-new lows indicators are showing no sign of an impending correction, but, with the Dow up nearly 1000 points in just the past four weeks, a short correction would be something a healthy market would fully appreciate.
One other item that may be a canary in the coal mine is the nice rise in gold over the past few weeks, including a healthy advance today, and, finally, silver caught a bid over the past few sessions, finally breaking and holding over the artificial resistance at $30/ounce.
On CNBC today, the network featured a series of reports on housing, calling it, somewhat inappropriately, "The Big Fix." Hottest among the topics was the government plan to sell off Fannie Mae and Freddie Mac's inventory of foreclosed homes (REO) to investor groups which will turn these single-family homes scattered across the country into rental units.
As is usual with government's half-baked plans, there are a rash of questions and arguments against, primarily centered around the whole fairness issue of kicking families out and then reselling - at what should be huge discounts - to well-heeled investors more concerned with turning profits than restoring blighted neighborhoods. The plan is still in the formative stages, but there are indications that the government will allow the investors to rent to whomsoever they please, which would include welfare and other social program recipients, meaning that homeowners ought to be on guard for the ghetto-ization and balkanization of their McMansion neighborhoods, such as is the case in other socialized nations, notably France, where the ghettos are in the suburbs, far from the uber-rich in the well-maintained cites.
One other problem is that the banks - if they actually do the right thing and write down these loans - will be facing far larger write-downs on bulk sales than anticipated. Since the US economy has been predicated for the past six years on keeping the banks free from losses, the government plan looks like a classic election-year crash and burn before it even gets going.
Dow 12,720.48, +96.50 (0.76%)
NASDAQ 2,786.70, -1.63 (0.06%)
S&P 500 1,315.38, +0.88 (0.07%)
NYSE Compos 7,829.34, +9.97 (0.13%)
NASDAQ Volume 1,979,837,250
NYSE Volume 3,911,913,250
Combined NYSE & NASDAQ Advance - Decline: 3289-2274
Combined NYSE & NASDAQ New highs - New lows: 182-26
WTI crude oil: 98.46, -1.93
Gold: 1,664.00, +9.50
Silver: 31.68, +1.17
Showing posts with label foreclosures. Show all posts
Showing posts with label foreclosures. Show all posts
Friday, January 20, 2012
Monday, January 9, 2012
Euro a Bit Higher; Stocks Barely Respond as Sinking Feeling Persists
After the first week of trading turned out to be one big cork pop on January 3rd - when the Dow soared 180 points, mostly at the open - and a slow melt lower, the first Monday of the new year was more evidence of just how sick, tired and moribund global markets have become. It's as though everybody is just waiting for the other shoe to drop, that some seismic implosion - most likely in Europe - is about to send stocks into a prolonged tailspin that ends in repudiation of sovereign debt and another huge blow to the fiat-based banking system.
Evidence exists that all is not well in Euroland, while pundits here in America point to the only positive metric they can see, higher corporate profits, though even there, signs are beginning to emerge that the record profits from 2011 are as fleeting as the passage of a few moments in time.
Estimates for 4th quarter corporate earnings have been slashed, and the number of pre-announcements from companies is at a three-year high, harkening back to the dismal days of early 2009, when there was nothing anybody or any company could do to halt the continuing downturn.
Even today's rather slow-moving market was full of tepid trading, highlighted by fractional moves in the averages, suggesting that nothing short of a complete overhaul of Europe's finances - and maybe even our own - can provide the kind of stimulus needed to restore investor confidence, which has waned severely since the middle of last year.
Even the bold joint pronouncement today by France's Nicolas Sarkozy and Germany's Angela Merkel failed to inspire any confidence. The two leaders set a timetable of March 1 for Euro-zone leaders to detail a plan of stricter budgetary restraint among member nations. Of course, critics and skeptics claim to have heard that song before. In the original agreement, a nation's current deficit was not supposed to exceed 3%. Any claims that sovereign states will clean up their balance sheets and act responsibly is met with jeers and, soon, tears.
America met a seminal moment in its own history today, as the nation's debt equalled its GDP, putting the world's powerhouse economy on a level approaching that of Italy, Greece or Portugal.
For its part, the White House appears ready to jettison all the bad residential loans held at Fannie Mae and Freddie Mac by turning them over to investors in bulk, with an eye toward turning over two million foreclosed and now-delinquent homes into rental properties, overseen by a hand-picked, large, well-capitalized property management firms.
The plan was first introduced by the Federal Reserve last week, though our friend Jim Willie, aka, the Golden Jackass, has been predicting such a move for the past two years, with deleterious effects abundant. The problems, from even a casual point of view, range from traditional homeowners being shut out of owning affordable housing and being forced to rent at increasingly-expensive rates, to the potential of default on property taxes should one of these "well-financed" firms going bust. It's almost the sub-prime crisis in reverse and is a radical departure from the American dream of home-ownership.
The property managers will likely receive sweet-heart deals from the government, slashing the prices to be paid on the homes instead of offering principal write-downs to strapped homeowners or new, qualified applicants because banks have been steadfastly denying mortgages and credit to even the most risk averse individuals and families.
We are quickly heading into a bleak, black hole of socialism, wherein the next shoe to drop won't be a ballet slipper but rather the boot of the storm trooper landing squarely on the necks of millions of tax-and-debt slaves, while the rich get bailouts and the poor get handouts.
Fairness is a word that seems to have permanently departed the American scene. Economic ugliness and despair approaches at breakneck speed all in the name of keeping up appearances.
After the closing bell, Alcoa (AA) kicked off earnings season with a disappointing, yet fitting, loss of three cents per share.
Dow 12,392.69, +32.77 (0.27%)
NASDAQ 2,676.56, +2.34 (0.09%)
S&P 500 1,280.70, +2.89 (0.23%)
NYSE Composite 7,583.76, +26.08 (0.35%)
NASDAQ Volume 1,777,449,250
NYSE Volume 3,248,196,250
Combined NYSE & NASDAQ Advance - Decline: 3385-2189
Combined NYSE & NASDAQ New highs - New lows: 170-62
WTI crude oil: 101.31, -0.25
Gold: 1,608.10, -8.70
Silver: 28.78, +0.10
Evidence exists that all is not well in Euroland, while pundits here in America point to the only positive metric they can see, higher corporate profits, though even there, signs are beginning to emerge that the record profits from 2011 are as fleeting as the passage of a few moments in time.
Estimates for 4th quarter corporate earnings have been slashed, and the number of pre-announcements from companies is at a three-year high, harkening back to the dismal days of early 2009, when there was nothing anybody or any company could do to halt the continuing downturn.
Even today's rather slow-moving market was full of tepid trading, highlighted by fractional moves in the averages, suggesting that nothing short of a complete overhaul of Europe's finances - and maybe even our own - can provide the kind of stimulus needed to restore investor confidence, which has waned severely since the middle of last year.
Even the bold joint pronouncement today by France's Nicolas Sarkozy and Germany's Angela Merkel failed to inspire any confidence. The two leaders set a timetable of March 1 for Euro-zone leaders to detail a plan of stricter budgetary restraint among member nations. Of course, critics and skeptics claim to have heard that song before. In the original agreement, a nation's current deficit was not supposed to exceed 3%. Any claims that sovereign states will clean up their balance sheets and act responsibly is met with jeers and, soon, tears.
America met a seminal moment in its own history today, as the nation's debt equalled its GDP, putting the world's powerhouse economy on a level approaching that of Italy, Greece or Portugal.
For its part, the White House appears ready to jettison all the bad residential loans held at Fannie Mae and Freddie Mac by turning them over to investors in bulk, with an eye toward turning over two million foreclosed and now-delinquent homes into rental properties, overseen by a hand-picked, large, well-capitalized property management firms.
The plan was first introduced by the Federal Reserve last week, though our friend Jim Willie, aka, the Golden Jackass, has been predicting such a move for the past two years, with deleterious effects abundant. The problems, from even a casual point of view, range from traditional homeowners being shut out of owning affordable housing and being forced to rent at increasingly-expensive rates, to the potential of default on property taxes should one of these "well-financed" firms going bust. It's almost the sub-prime crisis in reverse and is a radical departure from the American dream of home-ownership.
The property managers will likely receive sweet-heart deals from the government, slashing the prices to be paid on the homes instead of offering principal write-downs to strapped homeowners or new, qualified applicants because banks have been steadfastly denying mortgages and credit to even the most risk averse individuals and families.
We are quickly heading into a bleak, black hole of socialism, wherein the next shoe to drop won't be a ballet slipper but rather the boot of the storm trooper landing squarely on the necks of millions of tax-and-debt slaves, while the rich get bailouts and the poor get handouts.
Fairness is a word that seems to have permanently departed the American scene. Economic ugliness and despair approaches at breakneck speed all in the name of keeping up appearances.
After the closing bell, Alcoa (AA) kicked off earnings season with a disappointing, yet fitting, loss of three cents per share.
Dow 12,392.69, +32.77 (0.27%)
NASDAQ 2,676.56, +2.34 (0.09%)
S&P 500 1,280.70, +2.89 (0.23%)
NYSE Composite 7,583.76, +26.08 (0.35%)
NASDAQ Volume 1,777,449,250
NYSE Volume 3,248,196,250
Combined NYSE & NASDAQ Advance - Decline: 3385-2189
Combined NYSE & NASDAQ New highs - New lows: 170-62
WTI crude oil: 101.31, -0.25
Gold: 1,608.10, -8.70
Silver: 28.78, +0.10
Thursday, November 10, 2011
Euro/Equities Correlation In Play; Largest US Municipal Bankruptcy in Alabama; Foreclosures Rise
As has been noted here recently, the correlation between the Euro and US stocks is operating in perfect harmony. Today, with the Italian 10-year note dipping below the magic 7% yield line, the euro gained in strength against other currencies, most notably the US dollar, which sent - as it always does - US stocks upward.
There's really no further analysis to the US stock market needed, so long as Europe remains in crisis and the unannounced policy of the Fed and Treasury is to keep the US dollar weak. Whenever the Euro is rising, so too US stocks, and when the Euro is down, so are equities across the pond. It's a losing strategy in the big picture view, but that doesn't prevent Wall Street's masters of the universe from making bank on both sides of the trade.
One could suggest that the entire global economy is now tied to the fates of Greece and Italy, though in reality, it's the Fed and the major US banks that are pulling most of the strings. Just as fundamentals no longer matter for stock-picking, so too the daily drumbeat of Euro-craziness that manifests itself in speeches, statements and the occasional turnover of a sovereign government.
Keeping the dollar week and the Euro strong is all that matters, even though the Euro should, realistically, be trading at par with the dollar or lower. Eventually, this is a failing policy that will flatten everything: stocks, currencies, politicians and their weakened governments.
The correlation is not perfect, however, as our New highs - New lows indicator below demonstrates in perfect fashion. Today was a "risk on" event, though more of a momentum play than a true rally.
On the domestic front, Jefferson County, Alabama, filed for Chapter 9 bankruptcy protection on Wednesday after defaulting on a sewer project that plagued the county for nearly two decades. The county, which is home to Alabama's largest city, Birmingham, filed for $4 billion, making it the largest municipal bankruptcy filing in US history.
The story behind the bankruptcy is a pantheon of the the ills plaguing the once-great United States, involving the EPA - which ordered the county to upgrade its sewer system - corrupt local officials, who were offered and took sweetheart deals from - you guessed it - Wall Street speculators. There's blame and shame aplenty to go around, as 22 local officials were indicted and convicted for their roles in the corruption.
The federal government has bailed out banks, insurance companies and automakers, but when it comes to cites where Americans actually live and work, no dice. The county goes belly-up, leaving creditors holding worthless paper. It's an American tragedy brought to you by the crony capitalists spanning the nation.
Also making domestic headlines, RealtyTrac reported that foreclosure filings rose seven percent in October from the previous month, as lenders got back to work after the robo-signing scandal had derailed their efforts for a year. While Nevada remained atop the foreclosure rate for the 58th straight month, California took over as the top dog for October with a 17% spike in default notices. The top ten states for foreclosure activity (these are the places worth considering moving to in the next 3-5 years because housing prices will be ridiculously low) are Nevada, California, Arizona, Florida, Michigan, Georgia, Illinois, Idaho, Oregon and Colorado.
God bless America. We've been in a depression for three years but nobody will admit it. It's a shame, because this is a good country with some very wonderful people, but our political leaders and Wall Street bankers have bastardized the entire financial system.
Tomorrow being Veteran's Day, be sure to honor our living and fallen military men and women, and, maybe, save a little bit of wrath for those who made them fight, and die, for causes that benefitted a few at the expense of the many.
Dow 11,893.86, +112.92 (0.96%)
NASDAQ 2,625.15, +3.50 (0.13%)
S&P 500 1,239.70, +10.60 (0.86%)
NYSE Composite 7,423.64, +70.19 (0.95%)
NASDAQ Volume 1,908,959,750
NYSE Volume 4,015,058,500
Combined NYSE & NASDAQ Advance - Decline: 3629-1866
Combined NYSE & NASDAQ New highs - New lows: 36-104
WTI crude oil: 97.78, +2.04 (WTI is becoming WTF. Oil up more than $20 in the past six weeks.)
Gold: 1,759.60, -32.00
Silver: 34.11, -0.26
There's really no further analysis to the US stock market needed, so long as Europe remains in crisis and the unannounced policy of the Fed and Treasury is to keep the US dollar weak. Whenever the Euro is rising, so too US stocks, and when the Euro is down, so are equities across the pond. It's a losing strategy in the big picture view, but that doesn't prevent Wall Street's masters of the universe from making bank on both sides of the trade.
One could suggest that the entire global economy is now tied to the fates of Greece and Italy, though in reality, it's the Fed and the major US banks that are pulling most of the strings. Just as fundamentals no longer matter for stock-picking, so too the daily drumbeat of Euro-craziness that manifests itself in speeches, statements and the occasional turnover of a sovereign government.
Keeping the dollar week and the Euro strong is all that matters, even though the Euro should, realistically, be trading at par with the dollar or lower. Eventually, this is a failing policy that will flatten everything: stocks, currencies, politicians and their weakened governments.
The correlation is not perfect, however, as our New highs - New lows indicator below demonstrates in perfect fashion. Today was a "risk on" event, though more of a momentum play than a true rally.
On the domestic front, Jefferson County, Alabama, filed for Chapter 9 bankruptcy protection on Wednesday after defaulting on a sewer project that plagued the county for nearly two decades. The county, which is home to Alabama's largest city, Birmingham, filed for $4 billion, making it the largest municipal bankruptcy filing in US history.
The story behind the bankruptcy is a pantheon of the the ills plaguing the once-great United States, involving the EPA - which ordered the county to upgrade its sewer system - corrupt local officials, who were offered and took sweetheart deals from - you guessed it - Wall Street speculators. There's blame and shame aplenty to go around, as 22 local officials were indicted and convicted for their roles in the corruption.
The federal government has bailed out banks, insurance companies and automakers, but when it comes to cites where Americans actually live and work, no dice. The county goes belly-up, leaving creditors holding worthless paper. It's an American tragedy brought to you by the crony capitalists spanning the nation.
Also making domestic headlines, RealtyTrac reported that foreclosure filings rose seven percent in October from the previous month, as lenders got back to work after the robo-signing scandal had derailed their efforts for a year. While Nevada remained atop the foreclosure rate for the 58th straight month, California took over as the top dog for October with a 17% spike in default notices. The top ten states for foreclosure activity (these are the places worth considering moving to in the next 3-5 years because housing prices will be ridiculously low) are Nevada, California, Arizona, Florida, Michigan, Georgia, Illinois, Idaho, Oregon and Colorado.
God bless America. We've been in a depression for three years but nobody will admit it. It's a shame, because this is a good country with some very wonderful people, but our political leaders and Wall Street bankers have bastardized the entire financial system.
Tomorrow being Veteran's Day, be sure to honor our living and fallen military men and women, and, maybe, save a little bit of wrath for those who made them fight, and die, for causes that benefitted a few at the expense of the many.
Dow 11,893.86, +112.92 (0.96%)
NASDAQ 2,625.15, +3.50 (0.13%)
S&P 500 1,239.70, +10.60 (0.86%)
NYSE Composite 7,423.64, +70.19 (0.95%)
NASDAQ Volume 1,908,959,750
NYSE Volume 4,015,058,500
Combined NYSE & NASDAQ Advance - Decline: 3629-1866
Combined NYSE & NASDAQ New highs - New lows: 36-104
WTI crude oil: 97.78, +2.04 (WTI is becoming WTF. Oil up more than $20 in the past six weeks.)
Gold: 1,759.60, -32.00
Silver: 34.11, -0.26
Monday, February 14, 2011
MERS can't assign mortgages, judge rules
A personal victory today for me - and possibly hundreds of thousands of homeowners - thanks to U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, New York, who ruled, last Thursday, that Merscorp has no legal right to transfer mortgages.
Anyone following the fiasco that is the housing market knows Merscorp better by MERS, as they were the "nominee" on millions of mortgages written in the housing "boom" of the 2000s. What the judge's ruling does is essentially invalidate most mortgages written between 2003 and 2008 (and some before and after that), because that was the time period in which the largest lenders - Countrywide (now BofA), JP Morgan Chase, WAMU and others used MERS to end-run the county recording offices and save on fees, then packaged and resold these mortgages to witless investors.
Now, the banks have no standing in courts to foreclose and the buyers of those ugly securitized mortgages want their money back. Banks are being forced into a corner, even after being bailed out by the Federal Reserve, TARP and taxpayer money. The ruling from that bankruptcy court and others should serve distressed homeowners well in fights with the banks over ownership rights as they set strong precedents and are are likely only to be overturned by individual state legislatures.
Even then, any new laws validating the banks' practices would have to be applied retroactively, an activity expressly forbidden by the US constitution (remember that?).
This is, in reality, the end of the game for the big banks, which should have been allowed to fail in the beginning. The American public has spent Trillions of dollars keeping these bodies afloat and they are still sinking, and fast. Little by little, Americans are learning to stand up to the banks, city hall, the states and the federal government and demand their rights.
The ruling from this past Thursday stands as a marker in the struggle for resumption of the RULE OF LAW, which has been kept bound and gagged by the current and former presidential administrations. The American public is tired of being lied to and robbed from and the time has come to choose sides. Either you side with the government, the banks and their crooked politics and practices or you side with the people, and seemingly, the courts and the lawyers.
This is a nation governed by the rule of law, not by force or money or politics. Choose now!
Meanwhile, the circus kept running at Wall and Broad.
Dow 12,268.19, -5.07 (0.04%)
NASDAQ 2,817.18, +7.74 (0.28%)
S&P 500 1,332.32, +3.17 (0.24%)
NYSE Composite 8,405.15, +30.26 (0.36%)
Despite the marginal gains, advancing issues led decliners overall, 3686-2856. There were 286 new highs and 23 new lows on the NASDAQ and 355 new highs and 11 new lows on the NYSE. Selected stocks are clearly stretched to the limits of affordability, though with price discovery a lost art in the algo-following world of computer trading, this alone will not foment an imminent collapse of values. However, the volume on the NYSE made another new low point today, just a week after setting the low mark of the year. Rising indices without full-blown participation is the very first tool in the analyst bag, though the rules have been changed so dramatically over the past few years that nothing is certain today.
Still, market manipulations cannot last forever. The rules of economics will eventually take out all of the excess and malinvestment. It has to or the entire market is a fraud.
NASDAQ Volume 1,985,633,750
NYSE Volume 3,959,988,500.00
Note the divergence in commodities. Oil continued down again today, losing another 77 cents, to $84.81, while the precious metals gained. Watch for oil prices to continue their plunge back below $80 and beyond. demand has dried up once the price for US unleaded gas exceeded $3.15 on a national basis. Since the $4.00 shock of 2008, American drivers have made adjustments: buying more fuel-efficient vehicles, driving less, driving smarter, conserving, car-pooling.
Besides the obvious adjustments, the US economy simply is not strong enough - nor is the world economy, for that matter - to justify high fuel prices. There is little to no growth and slack demand. Ergo, oil and gas prices should fall accordingly.
As for the PMs, well, they've resumed their ominous climb. Gold gained $4.70, to $1,365.10, but still remains stuck in a range, though the bottom is in at $1350.00. Silver popped another 54 cents, to $30.53, approaching the 30-year-highs last seen in December.
The lid is about to come off the entire global system of financial fraud, again.
Anyone following the fiasco that is the housing market knows Merscorp better by MERS, as they were the "nominee" on millions of mortgages written in the housing "boom" of the 2000s. What the judge's ruling does is essentially invalidate most mortgages written between 2003 and 2008 (and some before and after that), because that was the time period in which the largest lenders - Countrywide (now BofA), JP Morgan Chase, WAMU and others used MERS to end-run the county recording offices and save on fees, then packaged and resold these mortgages to witless investors.
Now, the banks have no standing in courts to foreclose and the buyers of those ugly securitized mortgages want their money back. Banks are being forced into a corner, even after being bailed out by the Federal Reserve, TARP and taxpayer money. The ruling from that bankruptcy court and others should serve distressed homeowners well in fights with the banks over ownership rights as they set strong precedents and are are likely only to be overturned by individual state legislatures.
Even then, any new laws validating the banks' practices would have to be applied retroactively, an activity expressly forbidden by the US constitution (remember that?).
This is, in reality, the end of the game for the big banks, which should have been allowed to fail in the beginning. The American public has spent Trillions of dollars keeping these bodies afloat and they are still sinking, and fast. Little by little, Americans are learning to stand up to the banks, city hall, the states and the federal government and demand their rights.
The ruling from this past Thursday stands as a marker in the struggle for resumption of the RULE OF LAW, which has been kept bound and gagged by the current and former presidential administrations. The American public is tired of being lied to and robbed from and the time has come to choose sides. Either you side with the government, the banks and their crooked politics and practices or you side with the people, and seemingly, the courts and the lawyers.
This is a nation governed by the rule of law, not by force or money or politics. Choose now!
Meanwhile, the circus kept running at Wall and Broad.
Dow 12,268.19, -5.07 (0.04%)
NASDAQ 2,817.18, +7.74 (0.28%)
S&P 500 1,332.32, +3.17 (0.24%)
NYSE Composite 8,405.15, +30.26 (0.36%)
Despite the marginal gains, advancing issues led decliners overall, 3686-2856. There were 286 new highs and 23 new lows on the NASDAQ and 355 new highs and 11 new lows on the NYSE. Selected stocks are clearly stretched to the limits of affordability, though with price discovery a lost art in the algo-following world of computer trading, this alone will not foment an imminent collapse of values. However, the volume on the NYSE made another new low point today, just a week after setting the low mark of the year. Rising indices without full-blown participation is the very first tool in the analyst bag, though the rules have been changed so dramatically over the past few years that nothing is certain today.
Still, market manipulations cannot last forever. The rules of economics will eventually take out all of the excess and malinvestment. It has to or the entire market is a fraud.
NASDAQ Volume 1,985,633,750
NYSE Volume 3,959,988,500.00
Note the divergence in commodities. Oil continued down again today, losing another 77 cents, to $84.81, while the precious metals gained. Watch for oil prices to continue their plunge back below $80 and beyond. demand has dried up once the price for US unleaded gas exceeded $3.15 on a national basis. Since the $4.00 shock of 2008, American drivers have made adjustments: buying more fuel-efficient vehicles, driving less, driving smarter, conserving, car-pooling.
Besides the obvious adjustments, the US economy simply is not strong enough - nor is the world economy, for that matter - to justify high fuel prices. There is little to no growth and slack demand. Ergo, oil and gas prices should fall accordingly.
As for the PMs, well, they've resumed their ominous climb. Gold gained $4.70, to $1,365.10, but still remains stuck in a range, though the bottom is in at $1350.00. Silver popped another 54 cents, to $30.53, approaching the 30-year-highs last seen in December.
The lid is about to come off the entire global system of financial fraud, again.
Tuesday, December 21, 2010
You Owe the Fed $312,606.56; Net is Still Neutral; NJ vs. BofA
As Wall Street slowly wends its way to a year end with a blow-off topping Santa Rally, a few news items - that you won't get on CNBC, promise - were worth noting.
First, the Federal Reserve bought another $9.5 billion in Treasuries today, bringing their total to over $1 Trillion, or, for those who like lots of zeroes, $1,000,341,000,000. The Fed passed China as the largest holder of US government debt a few weeks ago, and now has surpassed the magic $1 Trillion mark, making everybody in the country indebted to the Federal Reserve (well, if you believe we are the government and thus responsible for their debt) to the tune of $312,606.56, roughly speaking.
So, rube, pay up!
The second of the day's big issues was the proposed FCC rules on Net Neutrality, or how the government will allow the big media companies to slice up the internet. What the FCC board did was pass, by a 3-2 vote, new rules, which are essentially the same as the old rules, except that they didn't publish them (rumored to be 100 pages long) and they don't apply to wireless services (phones, iPads, etc.). So, really, what they did isn't really news at all, but might be some day, like when the FCC gets sued again because most people don't believe they have the authority to regulate the internet at all. Larry Downes' guest column on Cnet has most of the dirt.
Our third newsy item is really juicy, however. It appears that some judges in New Jersey's Supreme Court haven't taken kindly to being abused and hoodwinked by some of the nation's largest banks.
The court has ordered a halt to all foreclosure proceedings in the state and has given the largest lenders, Bank of America, JP Morgan Chase, Citigroup, GMAC, Wells-Fargo and OneWest, until the 19th of January, 2011, to “show cause why the processing of uncontested residential foreclosure matters they have filed should not be suspended.”
Apparently, the judges are not convinced that the robo-signing and other frauds perpetrated on the state's courts were mere technicalities and wants the full mea culpa from the banks along with admissions of guilt. This really puts the banks in a tough spot, because they have to honestly and steadfastly assert their positions, which are largely lies and falsehoods about their fatally-flawed foreclosure practices.
Should they fail to convince the justices, they'll face a very long uphill road to ever be heard without prejudice in New Jersey courts. This also opens up the possibility that hundreds of thousands of flawed - and already settled - foreclosures could be reopened if New Jersey's stand becomes a precedent, not only in the state, but across the country.
Get ready for round two of fraudclosure-gate, or whatever they're calling it these days. In a similar vein, the 50 state Attorneys General investigating the foreclosure practices of the biggest banks, have said nothing since rumor broke three weeks ago that they were nearing a settlement with the offending and offensive banks, thus making the current rumor that all deals are off the table, especially since the states of Nevada and Arizona have separately sued Bank of America and Iowa AG Tom Miller, who heads the 50 states' AG investigation, has, together with the US Attorneys office, formed the Iowa Mortgage Fraud Working Group.
The Working Group will "identify and investigate targets for criminal prosecution" and, on the federal level, "will utilize the investigative expertise of agencies such as the Federal Bureau of Investigation (FBI) and U.S. Department of Housing & Urban Development--Office of Inspector General (HUD-OIG). Other federal agencies that may participate in the working group include the Secret Service, Internal Revenue Service, United States Postal Inspection Service, and Social Security Administration."
Ouch, double ouch and triple ouch! Of course, Julian Assange, the operator of WikiLeaks, also contends that he has information that could bring down executives from a major bank, widely assumed to be none other than Bank of America, which, from all appearances, may be in need of a bigger bandage. The bank is currently involved in no less than 35 major lawsuits, most stemming from their mortgage business.
The question then arises, why are people buying Bank of America (BAC) stock, or, the shares of any of the big banks embroiled in the mortgage business, like JP Morgan Chase (JPM), Wells-Fargo (WFC) or Citi (C)?
One would assume, with all of the aforementioned issues, that investors would shun these stocks, yet the reality is that they have been leading the December rally. Since November 30, Bank of America is up 15%; JP Morgan up more than 9% and Wells-Fargo and Citigroup are both up 13%. Either the investor class is being sold a phony bill of goods (wouldn't surprise anybody) or they know something most of the casual-viewing public don't.
They were all up better than two per cent today, leading a broad-based rally.
Dow 11,533.16, +55.03 (0.48%)
NASDAQ 2,667.61, +18.05 (0.68%)
S&P 500 1,254.60, +7.52 (0.60%)
NYSE Composite 7,906.10, +59.14 (0.75%)
Advancing issues trampled decliners, 4680-1871. NASDAQ new highs were 213, to 26 new lows. On the NYSE, new highs led new lows, 257-34. Of course, all of this movement was on dismally-low volume levels.
NASDAQ Volume 1,680,521,625.00
NYSE Volume 3,925,677,000
Oil pushed higher by 45 cents, reaching $89.82. Gold was held in check, losing 30 cents, to $1385.50, while silver posted a two-cent gain, to $29.37. Copper reached an all-time high of $4.3626 per pound, making pennies minted between 1909 and 1982 worth $0.28, nearly triple their face value.
Time to break out the kid's piggy bank?
First, the Federal Reserve bought another $9.5 billion in Treasuries today, bringing their total to over $1 Trillion, or, for those who like lots of zeroes, $1,000,341,000,000. The Fed passed China as the largest holder of US government debt a few weeks ago, and now has surpassed the magic $1 Trillion mark, making everybody in the country indebted to the Federal Reserve (well, if you believe we are the government and thus responsible for their debt) to the tune of $312,606.56, roughly speaking.
So, rube, pay up!
The second of the day's big issues was the proposed FCC rules on Net Neutrality, or how the government will allow the big media companies to slice up the internet. What the FCC board did was pass, by a 3-2 vote, new rules, which are essentially the same as the old rules, except that they didn't publish them (rumored to be 100 pages long) and they don't apply to wireless services (phones, iPads, etc.). So, really, what they did isn't really news at all, but might be some day, like when the FCC gets sued again because most people don't believe they have the authority to regulate the internet at all. Larry Downes' guest column on Cnet has most of the dirt.
Our third newsy item is really juicy, however. It appears that some judges in New Jersey's Supreme Court haven't taken kindly to being abused and hoodwinked by some of the nation's largest banks.
The court has ordered a halt to all foreclosure proceedings in the state and has given the largest lenders, Bank of America, JP Morgan Chase, Citigroup, GMAC, Wells-Fargo and OneWest, until the 19th of January, 2011, to “show cause why the processing of uncontested residential foreclosure matters they have filed should not be suspended.”
Apparently, the judges are not convinced that the robo-signing and other frauds perpetrated on the state's courts were mere technicalities and wants the full mea culpa from the banks along with admissions of guilt. This really puts the banks in a tough spot, because they have to honestly and steadfastly assert their positions, which are largely lies and falsehoods about their fatally-flawed foreclosure practices.
Should they fail to convince the justices, they'll face a very long uphill road to ever be heard without prejudice in New Jersey courts. This also opens up the possibility that hundreds of thousands of flawed - and already settled - foreclosures could be reopened if New Jersey's stand becomes a precedent, not only in the state, but across the country.
Get ready for round two of fraudclosure-gate, or whatever they're calling it these days. In a similar vein, the 50 state Attorneys General investigating the foreclosure practices of the biggest banks, have said nothing since rumor broke three weeks ago that they were nearing a settlement with the offending and offensive banks, thus making the current rumor that all deals are off the table, especially since the states of Nevada and Arizona have separately sued Bank of America and Iowa AG Tom Miller, who heads the 50 states' AG investigation, has, together with the US Attorneys office, formed the Iowa Mortgage Fraud Working Group.
The Working Group will "identify and investigate targets for criminal prosecution" and, on the federal level, "will utilize the investigative expertise of agencies such as the Federal Bureau of Investigation (FBI) and U.S. Department of Housing & Urban Development--Office of Inspector General (HUD-OIG). Other federal agencies that may participate in the working group include the Secret Service, Internal Revenue Service, United States Postal Inspection Service, and Social Security Administration."
Ouch, double ouch and triple ouch! Of course, Julian Assange, the operator of WikiLeaks, also contends that he has information that could bring down executives from a major bank, widely assumed to be none other than Bank of America, which, from all appearances, may be in need of a bigger bandage. The bank is currently involved in no less than 35 major lawsuits, most stemming from their mortgage business.
The question then arises, why are people buying Bank of America (BAC) stock, or, the shares of any of the big banks embroiled in the mortgage business, like JP Morgan Chase (JPM), Wells-Fargo (WFC) or Citi (C)?
One would assume, with all of the aforementioned issues, that investors would shun these stocks, yet the reality is that they have been leading the December rally. Since November 30, Bank of America is up 15%; JP Morgan up more than 9% and Wells-Fargo and Citigroup are both up 13%. Either the investor class is being sold a phony bill of goods (wouldn't surprise anybody) or they know something most of the casual-viewing public don't.
They were all up better than two per cent today, leading a broad-based rally.
Dow 11,533.16, +55.03 (0.48%)
NASDAQ 2,667.61, +18.05 (0.68%)
S&P 500 1,254.60, +7.52 (0.60%)
NYSE Composite 7,906.10, +59.14 (0.75%)
Advancing issues trampled decliners, 4680-1871. NASDAQ new highs were 213, to 26 new lows. On the NYSE, new highs led new lows, 257-34. Of course, all of this movement was on dismally-low volume levels.
NASDAQ Volume 1,680,521,625.00
NYSE Volume 3,925,677,000
Oil pushed higher by 45 cents, reaching $89.82. Gold was held in check, losing 30 cents, to $1385.50, while silver posted a two-cent gain, to $29.37. Copper reached an all-time high of $4.3626 per pound, making pennies minted between 1909 and 1982 worth $0.28, nearly triple their face value.
Time to break out the kid's piggy bank?
Thursday, December 2, 2010
Short Sales Helpful, But Read the Fine Print
While the economy seems to be improving, though modestly, one area of concern remains the shattered real estate market, where home prices have tumbled, homeowners owe more than their house is worth - a condition known as being "upside down" - and the recent foreclosure moratoriums by mortgage servicers like Bank of America, Ally Bank and JP Morgan Chase have slowed the pace of residential real estate sales.
With unemployment close to 10%, many homeowners are facing foreclosure and looking for ways to get out from under a financial burden they did not anticipate. One such method is a real estate short sale, which is a process by which the homeowner sells the property back to the bank at a reduced price. This often results in a win for both sides, as the bank does not have to engage in the time-consuming and costly process of foreclosure and the homeowner walks away from the home and mortgage debt, usually without any residual amount owed, known in the industry as a "deficiency," that being the difference between the original amount owed and the amount of the short sale.
Most states provide for deficiency claims, and banks routinely take judgments against short sale sellers, so this is an area which needs to be negotiated with the lender beforehand, and the services of a lawyer, representing the short seller, are strongly advised. Banks don't like to take losses and will normally try to slip in a deficiency clause into a short sale agreement.
For further information, you can can click here to check for all kinds of sales - including short sales - in your area, or for sales nationwide and more information on all kinds of real estate transactions, click here.
With unemployment close to 10%, many homeowners are facing foreclosure and looking for ways to get out from under a financial burden they did not anticipate. One such method is a real estate short sale, which is a process by which the homeowner sells the property back to the bank at a reduced price. This often results in a win for both sides, as the bank does not have to engage in the time-consuming and costly process of foreclosure and the homeowner walks away from the home and mortgage debt, usually without any residual amount owed, known in the industry as a "deficiency," that being the difference between the original amount owed and the amount of the short sale.
Most states provide for deficiency claims, and banks routinely take judgments against short sale sellers, so this is an area which needs to be negotiated with the lender beforehand, and the services of a lawyer, representing the short seller, are strongly advised. Banks don't like to take losses and will normally try to slip in a deficiency clause into a short sale agreement.
For further information, you can can click here to check for all kinds of sales - including short sales - in your area, or for sales nationwide and more information on all kinds of real estate transactions, click here.
Thursday, October 28, 2010
Not Mixing Metaphors: The US Ship of State is Rudderless
In less than a week, a couple of hundred people (maybe less) scattered around the country in data centers will decide who wins elections for the US House and Senate and other important elections, state-wide and local.
Do you think that's an absurd proposition made up by somebody overusing Zanax or other mind-altering drugs? Perhaps you haven't been keeping abreast of developments via the Brad Blog, Verified Voting or Bev Harris' Black Box Voting.
These and other web sites - no, you'll find nothing about actual vote manipulation anywhere in the mainstream media (MSM) or even on Fox News (who only make hollow claims that ACORN or other "liberal" groups are effecting voter fraud) - have been detailing our fully-rigged elections systems since the fiasco of 2000 in Florida. Or have you forgotten that George W. Bush was never elected, but rather, appointed to the Presidency by the Supreme Court in 2000 and that the 2004 election was largely stolen?
OK, take whatever meds you need to make you believe that all is well in our great union, but I'm here to tell you - again - that the country is being run by a criminal gang masquerading as politicians, funded by the gangsters of Wall Street, otherwise known as "banksters", who have defrauded millions of Americans over and over again through fraudulent mortgages, fraudulent assignments of mortgages (I personally own one of these), baseless foreclosures, phony mortgage-backed securities (MBS) which were sold around the globe, but also to pension funds to which YOU may be contributing.
I used to say the wheels are off, but it's worse than that now. The ship of state is floundering in a seas of fraud without a rudder. Consider our fates when abject morons such as Sharon Angle may actually defeat senator Harry Reid in Nevada, when a total business failure such as Carly Fiorina may defeat senator Barbara Boxer in California. Not that I'm a fan of either Boxer or Reid - they are integral parts of the rampant criminality of Washington, DC - but their proposed replacements are nightmares.
As a nation, we are well on our way to complete and total ruination at the hands of an oligarchy run out of control. Massive criminality is no longer prosecuted; indeed, it is likely praised behind closed doors. The government's preferred choice of action is to settle with criminals, taking money in lieu of prison terms, as in the case of Countrywide CEO Angelo Mozilo.
In normal times, deals like this would be categorized as bribes, but today the are SOP (standard Operating Procedure). In fact, our federal Attorney General, Eric Holder, hasn't led a sucessful prosecution of anybody involved in banking or the BP oil well explosion in the nearly two years be's been in office. The man just doesn't do his job and should be impeached, that is, if anyone can find him (he's nearly invisible).
To qualify that the US is off-course and headed for the rocks of desperation, depression and dissolution, a few headlines and stories should be required reading for today:
Run, Turkey, Run - PIMCO chief Bill Gross calls the Fed a Ponzi scheme
No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem - William K. Black rips Larry Summers and calls President Obama a fraud.
Halliburton Knew About Bad Cement Job Before the Spill - Mother Jones reports that the company that former VP Dick Cheney once was CEO of, has been hiding the truth, again. Making matters worse, the company is now headquartered in Dubai, so even if we could locate Mr. Holder, the chances of prosecuting this rogue company are nil.
And of course, this: Leave Vera Baker Alone. She Did Not Have An Affair With Obama. - the internal US security apparatus may have the president by the short hairs. Nothing surprises us any more.
Not enough? We have witches running for Congress, a proposal to legalize marijuana in California being beaten back by the liquor lobby, other candidates who dress up in NAZI garb, others who invoke the Taliban when speaking of their opponent, and enough crazies running for office - like Carl Paladino, who threatened to "take out" a reporter - to make the original cast of One Flew Over the Kukoo's Nest appear completely normal.
On top of that, computers execute over 70% of all trades on Wall Street without any human intervention, and Joseph Murin, former head of Ginnie Mae, losing all credibility in this CNBC video, by first saying that now is the best time to buy a home and that the robo-signing scandal is "not about fraud, this is about process inadequacy." Incidentally, guest host Ken Langone's posturing that people are moving out of their foreclosed-upon homes into cheaper apartments and renting out the homes, is 100% pure falsehood.
How the markets responded to this crush of madness was the usual miasma of mix-up: The NASDAQ, S&P and NYSE were up, the Dow down, all marginally. Volume was normal, meaning, lousy.
Dow 11,113.95, -12.33 (0.11%)
NASDAQ 2,507.37, +4.11 (0.16%)
S&P 500 1,183.78, +1.33 (0.11%)
NYSE Composite 7,504.85, +23.98 (0.32%)
NASDAQ Volume 1,910,478,375
NYSE Volume 4,771,915,500
As such, there were 3152 advancing issues, 3205 decliners. New highs beat new lows, 413-58.
JP Morgan and HSBC Bank are being sued in federal court for manipulating the silver market [PDF]. Got coin? Silver exploded to the upside today, gaining 45 cents to $24.01. Gold was up $19.10 on last print, to $1344.10. Crude oil futures on the NYMEX closed up 24 cents, at $82.18. Note that above $80 per barrel is now the new normal, as is $3.00/gallon gas in many locales.
It's a mess, and come Tuesday, it's only going to get messier as we're likely to have a lame-duck congress followed by a completely stalemated one, with Republicans controlling the House and Democrats with a narrow (unable to override vetoes) majority in the Senate. Dr. Utopia will still reside in the White House, and, at a time when the nation needs leadership in the very worst way, we will have none.
Tomorrow, the initial estimate of third quarter GDP will be announced at 8:30 am ET.
Good luck with that!
Do you think that's an absurd proposition made up by somebody overusing Zanax or other mind-altering drugs? Perhaps you haven't been keeping abreast of developments via the Brad Blog, Verified Voting or Bev Harris' Black Box Voting.
These and other web sites - no, you'll find nothing about actual vote manipulation anywhere in the mainstream media (MSM) or even on Fox News (who only make hollow claims that ACORN or other "liberal" groups are effecting voter fraud) - have been detailing our fully-rigged elections systems since the fiasco of 2000 in Florida. Or have you forgotten that George W. Bush was never elected, but rather, appointed to the Presidency by the Supreme Court in 2000 and that the 2004 election was largely stolen?
OK, take whatever meds you need to make you believe that all is well in our great union, but I'm here to tell you - again - that the country is being run by a criminal gang masquerading as politicians, funded by the gangsters of Wall Street, otherwise known as "banksters", who have defrauded millions of Americans over and over again through fraudulent mortgages, fraudulent assignments of mortgages (I personally own one of these), baseless foreclosures, phony mortgage-backed securities (MBS) which were sold around the globe, but also to pension funds to which YOU may be contributing.
I used to say the wheels are off, but it's worse than that now. The ship of state is floundering in a seas of fraud without a rudder. Consider our fates when abject morons such as Sharon Angle may actually defeat senator Harry Reid in Nevada, when a total business failure such as Carly Fiorina may defeat senator Barbara Boxer in California. Not that I'm a fan of either Boxer or Reid - they are integral parts of the rampant criminality of Washington, DC - but their proposed replacements are nightmares.
As a nation, we are well on our way to complete and total ruination at the hands of an oligarchy run out of control. Massive criminality is no longer prosecuted; indeed, it is likely praised behind closed doors. The government's preferred choice of action is to settle with criminals, taking money in lieu of prison terms, as in the case of Countrywide CEO Angelo Mozilo.
In normal times, deals like this would be categorized as bribes, but today the are SOP (standard Operating Procedure). In fact, our federal Attorney General, Eric Holder, hasn't led a sucessful prosecution of anybody involved in banking or the BP oil well explosion in the nearly two years be's been in office. The man just doesn't do his job and should be impeached, that is, if anyone can find him (he's nearly invisible).
To qualify that the US is off-course and headed for the rocks of desperation, depression and dissolution, a few headlines and stories should be required reading for today:
Run, Turkey, Run - PIMCO chief Bill Gross calls the Fed a Ponzi scheme
No Mr. President, Larry Summers Did Not Resolve the Financial Crisis for a Pittance, He Just Papered Over the Problem - William K. Black rips Larry Summers and calls President Obama a fraud.
Halliburton Knew About Bad Cement Job Before the Spill - Mother Jones reports that the company that former VP Dick Cheney once was CEO of, has been hiding the truth, again. Making matters worse, the company is now headquartered in Dubai, so even if we could locate Mr. Holder, the chances of prosecuting this rogue company are nil.
And of course, this: Leave Vera Baker Alone. She Did Not Have An Affair With Obama. - the internal US security apparatus may have the president by the short hairs. Nothing surprises us any more.
Not enough? We have witches running for Congress, a proposal to legalize marijuana in California being beaten back by the liquor lobby, other candidates who dress up in NAZI garb, others who invoke the Taliban when speaking of their opponent, and enough crazies running for office - like Carl Paladino, who threatened to "take out" a reporter - to make the original cast of One Flew Over the Kukoo's Nest appear completely normal.
On top of that, computers execute over 70% of all trades on Wall Street without any human intervention, and Joseph Murin, former head of Ginnie Mae, losing all credibility in this CNBC video, by first saying that now is the best time to buy a home and that the robo-signing scandal is "not about fraud, this is about process inadequacy." Incidentally, guest host Ken Langone's posturing that people are moving out of their foreclosed-upon homes into cheaper apartments and renting out the homes, is 100% pure falsehood.
How the markets responded to this crush of madness was the usual miasma of mix-up: The NASDAQ, S&P and NYSE were up, the Dow down, all marginally. Volume was normal, meaning, lousy.
Dow 11,113.95, -12.33 (0.11%)
NASDAQ 2,507.37, +4.11 (0.16%)
S&P 500 1,183.78, +1.33 (0.11%)
NYSE Composite 7,504.85, +23.98 (0.32%)
NASDAQ Volume 1,910,478,375
NYSE Volume 4,771,915,500
As such, there were 3152 advancing issues, 3205 decliners. New highs beat new lows, 413-58.
JP Morgan and HSBC Bank are being sued in federal court for manipulating the silver market [PDF]. Got coin? Silver exploded to the upside today, gaining 45 cents to $24.01. Gold was up $19.10 on last print, to $1344.10. Crude oil futures on the NYMEX closed up 24 cents, at $82.18. Note that above $80 per barrel is now the new normal, as is $3.00/gallon gas in many locales.
It's a mess, and come Tuesday, it's only going to get messier as we're likely to have a lame-duck congress followed by a completely stalemated one, with Republicans controlling the House and Democrats with a narrow (unable to override vetoes) majority in the Senate. Dr. Utopia will still reside in the White House, and, at a time when the nation needs leadership in the very worst way, we will have none.
Tomorrow, the initial estimate of third quarter GDP will be announced at 8:30 am ET.
Good luck with that!
Tuesday, October 19, 2010
No POMO, Stocks Down; B of A Putbacks Slam Stocks
Playing the market has become so simple. If the Fed supplies liquidity, buy. If they don't sell, but you should do those things a day ahead of time, and, of course, there are no guarantees, as computers running complex algorithms control 70-80% of the trading and the other 20-30% is handled by crooks, swindlers, fast-buck operators and con men.
Today's slide was exacerbated by problems for America's favorite deceitful banking interest, Bank of America, as reports emerged that various parties, from PIMCO to the NY Fed's Maiden Lane entity, are seeking putbacks against the company for many of the bogus MBS it has floated over the years. In a nutshell, now that 20% or more of the loans in various mortgage-backed securities are non-performing and the bank can't keep up with foreclosures and reselling of properties, the investors want their money back.
A consortium has hinted at a lawsuit in a letter to the bank, with more lawsuits surely to follow from parties as diverse as class-actions on behalf of defrauded homeowners to state AGs from across the country in a smorgasbord of civil and criminal actions. BofA has turned from a lending bank to a punching bag overnight, though the process has taken years and was mostly self-inflicted. Of course, BofA is not alone, though they may be singled out for the bulk of the abuse. JP Morgan Chase, Wells Fargo and Citigroup have similar issues that will be called out in due time.
The hour of the banks final reckoning is upon us, finally, and the criminals are circling the wagons. Within days, we should see executives lawyering up, though Attorney General Eric Holder remains ominously silent and disgraced. Our federal Attorney General should be immediately forced to step down for he has allowed a criminal enterprise to flourish within the banking community without even the hint of an investigation or subpoena.
Dow 10,978.62, -165.07 (1.48%)
NASDAQ 2,436.95, -43.71 (1.76%)
S&P 500 1,165.90, -18.81 (1.59%)
NYSE Composite 7,423.65, -147.45 (1.95%)
Losers finished well ahead of gainers, 5335-1164. New highs came down quite a bit, but still led new lows, 253-30. Obviously, there was some bottom fishing going on, as the new lows number should have been at least double what it was. Of course, considering the abundance of reporting and statistical issues facing the markets, all figures must be viewed with extreme cynicism and skepticism. Volume was quite strong, not to the bulls liking, indicating that this downdraft might be just the first of an October surprise swoon which almost everybody - except the genius analysts on CNBC - has expected.
NASDAQ Volume 2,256,866,500
NYSE Volume 6,293,440,000
Equities were joined by many commodities in the sell-off. Crude Oil for November delivery fell $3.59, to $79.49, a nearly 4.5% loss. Gold was smacked back to reality with a $36.10 loss, to $1,336.00. Silver responded in kind, losing 63 cents, to $23.78.
The banks are walking face-first into a tsunami of lawsuits. High-powered class action lawyers are looking into the potential for a nationwide class action in which the major banks - JP Morgan Chase, Bank of America Wells Fargo and Citigroup - would be defendants.
This Bloomberg story details the sordid side of MERS, named in lawsuits across the country. MERS (Mortgage elctronic Registry System) is a computerized registry which avoids filing mortgage assignments in county offices. It was founded, funded and maintained by a consortium of major lending institutions as well as government entities, Fannie Mae and Freddy Mac.
Another story, this one from Salon, citing numerous sources, including University of Utah Law Professor Christopher Peterson in the Summer 2010 University of Cincnnati Law Review. Peterson isolates MERS and puts it squarrely at the root of the entire mortgage miasma, dating back to its roots in 1995. The company and its practices are largely behind the entire securitization process, which, according to Peterson, obliterates chain of title and among other rights, standing in foreclosure actions.
Fraudclosure continues. Here's Barry Ritholz and Chris Whalen on Larry Kudlow's show Monday night discussing various scenarios on how the situation will be resolved:
Today's slide was exacerbated by problems for America's favorite deceitful banking interest, Bank of America, as reports emerged that various parties, from PIMCO to the NY Fed's Maiden Lane entity, are seeking putbacks against the company for many of the bogus MBS it has floated over the years. In a nutshell, now that 20% or more of the loans in various mortgage-backed securities are non-performing and the bank can't keep up with foreclosures and reselling of properties, the investors want their money back.
A consortium has hinted at a lawsuit in a letter to the bank, with more lawsuits surely to follow from parties as diverse as class-actions on behalf of defrauded homeowners to state AGs from across the country in a smorgasbord of civil and criminal actions. BofA has turned from a lending bank to a punching bag overnight, though the process has taken years and was mostly self-inflicted. Of course, BofA is not alone, though they may be singled out for the bulk of the abuse. JP Morgan Chase, Wells Fargo and Citigroup have similar issues that will be called out in due time.
The hour of the banks final reckoning is upon us, finally, and the criminals are circling the wagons. Within days, we should see executives lawyering up, though Attorney General Eric Holder remains ominously silent and disgraced. Our federal Attorney General should be immediately forced to step down for he has allowed a criminal enterprise to flourish within the banking community without even the hint of an investigation or subpoena.
Dow 10,978.62, -165.07 (1.48%)
NASDAQ 2,436.95, -43.71 (1.76%)
S&P 500 1,165.90, -18.81 (1.59%)
NYSE Composite 7,423.65, -147.45 (1.95%)
Losers finished well ahead of gainers, 5335-1164. New highs came down quite a bit, but still led new lows, 253-30. Obviously, there was some bottom fishing going on, as the new lows number should have been at least double what it was. Of course, considering the abundance of reporting and statistical issues facing the markets, all figures must be viewed with extreme cynicism and skepticism. Volume was quite strong, not to the bulls liking, indicating that this downdraft might be just the first of an October surprise swoon which almost everybody - except the genius analysts on CNBC - has expected.
NASDAQ Volume 2,256,866,500
NYSE Volume 6,293,440,000
Equities were joined by many commodities in the sell-off. Crude Oil for November delivery fell $3.59, to $79.49, a nearly 4.5% loss. Gold was smacked back to reality with a $36.10 loss, to $1,336.00. Silver responded in kind, losing 63 cents, to $23.78.
The banks are walking face-first into a tsunami of lawsuits. High-powered class action lawyers are looking into the potential for a nationwide class action in which the major banks - JP Morgan Chase, Bank of America Wells Fargo and Citigroup - would be defendants.
This Bloomberg story details the sordid side of MERS, named in lawsuits across the country. MERS (Mortgage elctronic Registry System) is a computerized registry which avoids filing mortgage assignments in county offices. It was founded, funded and maintained by a consortium of major lending institutions as well as government entities, Fannie Mae and Freddy Mac.
Another story, this one from Salon, citing numerous sources, including University of Utah Law Professor Christopher Peterson in the Summer 2010 University of Cincnnati Law Review. Peterson isolates MERS and puts it squarrely at the root of the entire mortgage miasma, dating back to its roots in 1995. The company and its practices are largely behind the entire securitization process, which, according to Peterson, obliterates chain of title and among other rights, standing in foreclosure actions.
Fraudclosure continues. Here's Barry Ritholz and Chris Whalen on Larry Kudlow's show Monday night discussing various scenarios on how the situation will be resolved:
Monday, October 18, 2010
POMO Monday! Stocks Soar! BofA in the Clear!
The Fed executed a little $6.3 Billion POMO, which, as we have mentioned, is tantamount to giving the largest banks and brokerages free money with which to play the market. "Game on, dudes!" was heard in the offices of Goldman Sachs, Bank of America, et. al., about five to seven minutes into the session.
Gotta love that funny money! Let's dance!
Dow 11,143.69, +80.91 (0.73%)
NASDAQ 2,480.66, +11.89 (0.48%)
S&P 500 1,184.71, +8.52 (0.72%)
NYSE Composite 7,571.10, +50.50 (0.67%)
Up, up and away went the stock indices, with 80% of the trading being done by HTF "flash" computers using algorithms designed by NASA, DARPA or the CIA, no doubt. Advancers absolutely crshed decliners, 4249-2216. New highs bettered new lows, 440-56. Volume was on the wrong side of the toilet rim, but with the Fed pumping money into the system, and the computers all programmed to react to volume buying as a buy signal, there's almost no downside to this market, which, of course, is the whole big idea, anyway.
It's absolutely absurd, but, I would be remiss not to advise at least some jumping in at any level right now, but with the implicit understanding that stops have to be set very judiciously and that means just under your buy price. (Disclaimer: setting stops may alert the HTF computers to your trades and take them out with all due haste.)
NASDAQ Volume 1,642,727,625.00
NYSE Volume 4,996,276,500.0
It was a great day to own oil futures. The front-end contract flew ahead by $1.83 on no news or data, to $83.08. Late print on gold was up $3.40, at $1372.30. Silver also gained 11 cents, to $24.43.
Add this last bit of news to the "and you thought Usain Bolt was fast" file. Bank of America, which just announced a self-imposed halt to foreclosure proceedings in all 50 states last week, today announced that they would resume foreclosures in 23 judicial-foreclosure states. The bank says that they found NO ERRORS in the 102,000 cases they reviewed, but added that they would begin submitting new affidavits by October 25th.
Now, call me silly or just plain dumb, but why, if they found no errors, would they begin filing "new" affidavits. Just saying, if the old ones were OK, why do you draw up new ones. Incidentally, I wonder just how many people spent the last ten days reviewing these 102,000 documents, which, I'm assuming were scattered around offices in those 23 states?
If you had 1000 people reviewing those documents, they'd have to have done 100 apiece, or about ten per day. If it were 100 people, that would escalate to 100 pr day, and what kind of review could one perform at the rate of about 15 per hour?
As usual, that smells fishy to me, but what do I know? Well, I know that the nation's largest banks are rotten, crooked and exist only to separate Americans from their money and property, so excuse me if I don't buy BofA's argument that they've already undone some of their dirty work.
Not so incidentally, Bank of America (BAC) shares were up 0.36, or 3% on the day. Other major bank stocks, like JP Morgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C), were up similarly. Wells Fargo and Citgroup both posted gains in excess of 5%.
Happy daze!
Late add: Just found this nifty publishing tool, which allows you to make animated movies. Here's today's post:
Gotta love that funny money! Let's dance!
Dow 11,143.69, +80.91 (0.73%)
NASDAQ 2,480.66, +11.89 (0.48%)
S&P 500 1,184.71, +8.52 (0.72%)
NYSE Composite 7,571.10, +50.50 (0.67%)
Up, up and away went the stock indices, with 80% of the trading being done by HTF "flash" computers using algorithms designed by NASA, DARPA or the CIA, no doubt. Advancers absolutely crshed decliners, 4249-2216. New highs bettered new lows, 440-56. Volume was on the wrong side of the toilet rim, but with the Fed pumping money into the system, and the computers all programmed to react to volume buying as a buy signal, there's almost no downside to this market, which, of course, is the whole big idea, anyway.
It's absolutely absurd, but, I would be remiss not to advise at least some jumping in at any level right now, but with the implicit understanding that stops have to be set very judiciously and that means just under your buy price. (Disclaimer: setting stops may alert the HTF computers to your trades and take them out with all due haste.)
NASDAQ Volume 1,642,727,625.00
NYSE Volume 4,996,276,500.0
It was a great day to own oil futures. The front-end contract flew ahead by $1.83 on no news or data, to $83.08. Late print on gold was up $3.40, at $1372.30. Silver also gained 11 cents, to $24.43.
Add this last bit of news to the "and you thought Usain Bolt was fast" file. Bank of America, which just announced a self-imposed halt to foreclosure proceedings in all 50 states last week, today announced that they would resume foreclosures in 23 judicial-foreclosure states. The bank says that they found NO ERRORS in the 102,000 cases they reviewed, but added that they would begin submitting new affidavits by October 25th.
Now, call me silly or just plain dumb, but why, if they found no errors, would they begin filing "new" affidavits. Just saying, if the old ones were OK, why do you draw up new ones. Incidentally, I wonder just how many people spent the last ten days reviewing these 102,000 documents, which, I'm assuming were scattered around offices in those 23 states?
If you had 1000 people reviewing those documents, they'd have to have done 100 apiece, or about ten per day. If it were 100 people, that would escalate to 100 pr day, and what kind of review could one perform at the rate of about 15 per hour?
As usual, that smells fishy to me, but what do I know? Well, I know that the nation's largest banks are rotten, crooked and exist only to separate Americans from their money and property, so excuse me if I don't buy BofA's argument that they've already undone some of their dirty work.
Not so incidentally, Bank of America (BAC) shares were up 0.36, or 3% on the day. Other major bank stocks, like JP Morgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C), were up similarly. Wells Fargo and Citgroup both posted gains in excess of 5%.
Happy daze!
Late add: Just found this nifty publishing tool, which allows you to make animated movies. Here's today's post:
Thursday, October 14, 2010
CRASH ALERT... BANKS ABOUT TO ROLL OVER AGAIN
As the headline suggests, Foreclosuregate has precipitated a front-running on the banks by investors who are rightfully scared that issues stemming from the rampant fraud, not only from foreclosure and robo-signing issues, but dating back to mortgage originations, bad paperwork, MERS, and the entire RMBS fiasco.
Proof was in the activity of the stocks that appear poised to take what amounts to a knockout blow: JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and the granddaddy of them all, Bank of America (BAC). Shares of these banks, which are the servicers of vast numbers of mortgages, many already in default or foreclosure, fell by 5-6% on the day.
On the other side of the sell-off are the monoline insurers, those companies which will gain from tranches of mortgages securities being "put back" to the banks as investors seek to be compensated and made whole at par for non-performing securities. Such entities such as AMBAC (ABK), MBIA (MBI), Radian Group (RDN) and MGIC Investment Corp. (MTG) were up anywhere from 5-18%. The smart money is already in, against the banks and on the insurers.
At issue are mortgages made and securities issued between 2005 and 2007, which were mostly securitized and sold by the Big Four banks. Many of the loans have already defaulted and are being put back to the banks, with litigation ramping up.
As for overall market reaction, stocks were down hard on the day on news that PPI increase 0.4% in September and new unemployment claims ramped up to 462,000, but is probably more like 475,000, as the BLS routinely understates these numbers and upwardly revises them the following week.
The Dow was down by as many as 72 points before the interventionists took aim at the unchanged line at 3:00 - their usual "happy hour" - and almost got there, perhaps leaving all of the indices in the red as a signal to those in the know that the massive sell-off was set to kick into high gear beginning Friday.
A market decline prior to the election is clearly in the cards as a message for Tea partiers and Republicans to carry into the elections as a repudiation of Democrat party policies. in case nobody noticed, equity options expire tomorrow, and the usual out-of-the-blue rally has gone missing.
Stocks are about to become very cheap, very soon, as a crash is well set-up by Fed pumping liquidity and enormous denial of reality on the part of the entire Wall Street scum crowd.
The Fed's QE2, attempting to "reduce disinflation," targeting a 2% inflation rate and an additional 0.5 to 1.0% improvement in GDP, is exactly backwards at this point. To say they are "pushing on a string" is like saying your son's high school football team has a good chance of beating the Baltimore Ravens.
The Fed will attempt to influence the economy by timed purchases of Treasuries and more bad paper in the MBS universe. They're going to get stuck with a load of bad paper which hopefully will cause their utter and complete collapse. Since the Fed is one of the major causes of financial pain in this country, it's about time they meet their maker and go the way of buggy whips, typewriters and people who think the banks are a good buy. Planning to purchase as much as $1.5 trillion of paper over the next 6-12 months isn't even going to raise an eyebrow on the slumbering economy. They'd need $20 trillion to unwind the mess the banks have created and continue to deny. It's OVER. Bank of America, Wells Fargo and Citigroup will FAIL. JP Morgan Chase may survive, as they hold a special place in American finance, but they will be impaired for many years.
Dow 11,094.57, -1.51 (0.01%)
NASDAQ 2,435.38, -5.85 (0.24%)
S&P 500 1,173.81, -4.29 (0.36%)
NYSE Composite 7,546.59, -14.91 (0.20%)
NASDAQ Volume 2,026,980,750.00
NYSE Volume 5,962,782,000
Declining issues outpaced advancers, 3706-2738, but new highs remained in favor over new lows, 610-58. Volume was slightly improved, but only because the volume on the bank stocks was so unusually high (about 4.5X normal on BAC and WFC alone).
In anticipation of the deflationary depression the United States is about to enter, oil backed off 32 cents, to $82.69. The alternative currency play in the precious metals remained very much alive, with gold hiher by $7.10, to $1,377.60. Silver was higher by another 50 cents, to $24.44, capping a 25% move from the beginning of September.
Make no bones about it, the US is heading right over the cliff. Whether anybody recognizes the fact or the media gives credence to it before the elections or before Christmas is just a matter of how well the power players in government can keep it under wraps. But it's here, and it's going to hurt for a very long time.
Proof was in the activity of the stocks that appear poised to take what amounts to a knockout blow: JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and the granddaddy of them all, Bank of America (BAC). Shares of these banks, which are the servicers of vast numbers of mortgages, many already in default or foreclosure, fell by 5-6% on the day.
On the other side of the sell-off are the monoline insurers, those companies which will gain from tranches of mortgages securities being "put back" to the banks as investors seek to be compensated and made whole at par for non-performing securities. Such entities such as AMBAC (ABK), MBIA (MBI), Radian Group (RDN) and MGIC Investment Corp. (MTG) were up anywhere from 5-18%. The smart money is already in, against the banks and on the insurers.
At issue are mortgages made and securities issued between 2005 and 2007, which were mostly securitized and sold by the Big Four banks. Many of the loans have already defaulted and are being put back to the banks, with litigation ramping up.
As for overall market reaction, stocks were down hard on the day on news that PPI increase 0.4% in September and new unemployment claims ramped up to 462,000, but is probably more like 475,000, as the BLS routinely understates these numbers and upwardly revises them the following week.
The Dow was down by as many as 72 points before the interventionists took aim at the unchanged line at 3:00 - their usual "happy hour" - and almost got there, perhaps leaving all of the indices in the red as a signal to those in the know that the massive sell-off was set to kick into high gear beginning Friday.
A market decline prior to the election is clearly in the cards as a message for Tea partiers and Republicans to carry into the elections as a repudiation of Democrat party policies. in case nobody noticed, equity options expire tomorrow, and the usual out-of-the-blue rally has gone missing.
Stocks are about to become very cheap, very soon, as a crash is well set-up by Fed pumping liquidity and enormous denial of reality on the part of the entire Wall Street scum crowd.
The Fed's QE2, attempting to "reduce disinflation," targeting a 2% inflation rate and an additional 0.5 to 1.0% improvement in GDP, is exactly backwards at this point. To say they are "pushing on a string" is like saying your son's high school football team has a good chance of beating the Baltimore Ravens.
The Fed will attempt to influence the economy by timed purchases of Treasuries and more bad paper in the MBS universe. They're going to get stuck with a load of bad paper which hopefully will cause their utter and complete collapse. Since the Fed is one of the major causes of financial pain in this country, it's about time they meet their maker and go the way of buggy whips, typewriters and people who think the banks are a good buy. Planning to purchase as much as $1.5 trillion of paper over the next 6-12 months isn't even going to raise an eyebrow on the slumbering economy. They'd need $20 trillion to unwind the mess the banks have created and continue to deny. It's OVER. Bank of America, Wells Fargo and Citigroup will FAIL. JP Morgan Chase may survive, as they hold a special place in American finance, but they will be impaired for many years.
Dow 11,094.57, -1.51 (0.01%)
NASDAQ 2,435.38, -5.85 (0.24%)
S&P 500 1,173.81, -4.29 (0.36%)
NYSE Composite 7,546.59, -14.91 (0.20%)
NASDAQ Volume 2,026,980,750.00
NYSE Volume 5,962,782,000
Declining issues outpaced advancers, 3706-2738, but new highs remained in favor over new lows, 610-58. Volume was slightly improved, but only because the volume on the bank stocks was so unusually high (about 4.5X normal on BAC and WFC alone).
In anticipation of the deflationary depression the United States is about to enter, oil backed off 32 cents, to $82.69. The alternative currency play in the precious metals remained very much alive, with gold hiher by $7.10, to $1,377.60. Silver was higher by another 50 cents, to $24.44, capping a 25% move from the beginning of September.
Make no bones about it, the US is heading right over the cliff. Whether anybody recognizes the fact or the media gives credence to it before the elections or before Christmas is just a matter of how well the power players in government can keep it under wraps. But it's here, and it's going to hurt for a very long time.
Wednesday, October 13, 2010
Foreclosure-Gate Goes Full Monte; Stocks Soar!
Our stock markets have officially reached escape velocity today and have become permanently detached from reality.
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
Tuesday, October 12, 2010
ForeclosureGate Harming All Markets?
Very busy on a number of matters here today, so, I'll apologize for the brevity of this post in advance.
The ongoing saga of residential real estate in the USA just continues to escalate. While more in the banking and investment community are saying a nationwide moratorium on foreclosures would be very damaging to the economy, voices on the other side of the debate, many calling for a complete halt to foreclosures and evictions, are expressing the concern that such a national stop and reset would be the proper first step toward fixing the very sick residential real estate market.
The problem is that real estate is a huge part of GDP and post-foreclosure sales of bank REO properties have been making up 25% of the total for some time now. Stopping the flow is going to have a material effect on GDP. Shutting down foreclosures and sales will throw us right back into recession, almost without a doubt.
Even as it is, without a national moratorium, hundreds of thousands of foreclosures are already in no-go mode and state Attorneys General are ramping up efforts to investigate, the latest being NY AG Andrews Cuomo - incidentally running for governor - who is calling on the four biggest lenders, Ally (GMAC), Chase, Bank of America and Wells Fargo to immediately halt all foreclosures, which - news to the AG - all but Wells Fargo have already done.
Further, 40 state AGs are due to announce (possibly as early as tonight) a joint task force to look into "robo-signing" and other allegations of fraud and abuse by the mortgage servicers.
All of this confusion will lead to a frozen real estate market. Anecdotal stories of short sales halted and prospective buyers preferring to "wait and see" are contributing to grind the already-maligned real estate business to a complete halt, and it seems to be spilling over into other markets, particularly stocks, which essentially treaded water for the second straight day.
Dow 11,020.40, +10.06 (0.09%)
NASDAQ 2,417.92, +15.59 (0.65%)
S&P 500 1,169.77, +4.45 (0.38%)
NYSE Composite 7,489.62, +10.61 (0.14%)
Advancers beat decliners, 3259-2433. New highs: 394; New lows: 36. Volume was improved from Monday's holiday-held-back level.
NASDAQ Volume 1,984,735,250
NYSE Volume 4,233,061,500
Oil dropped 54 cents, to $81.67, heading back to the security of the $75-80 level. Gold lost $7.70, to $1,346.70, while silver slipped 20 cents, to $23.15.
The ongoing saga of residential real estate in the USA just continues to escalate. While more in the banking and investment community are saying a nationwide moratorium on foreclosures would be very damaging to the economy, voices on the other side of the debate, many calling for a complete halt to foreclosures and evictions, are expressing the concern that such a national stop and reset would be the proper first step toward fixing the very sick residential real estate market.
The problem is that real estate is a huge part of GDP and post-foreclosure sales of bank REO properties have been making up 25% of the total for some time now. Stopping the flow is going to have a material effect on GDP. Shutting down foreclosures and sales will throw us right back into recession, almost without a doubt.
Even as it is, without a national moratorium, hundreds of thousands of foreclosures are already in no-go mode and state Attorneys General are ramping up efforts to investigate, the latest being NY AG Andrews Cuomo - incidentally running for governor - who is calling on the four biggest lenders, Ally (GMAC), Chase, Bank of America and Wells Fargo to immediately halt all foreclosures, which - news to the AG - all but Wells Fargo have already done.
Further, 40 state AGs are due to announce (possibly as early as tonight) a joint task force to look into "robo-signing" and other allegations of fraud and abuse by the mortgage servicers.
All of this confusion will lead to a frozen real estate market. Anecdotal stories of short sales halted and prospective buyers preferring to "wait and see" are contributing to grind the already-maligned real estate business to a complete halt, and it seems to be spilling over into other markets, particularly stocks, which essentially treaded water for the second straight day.
Dow 11,020.40, +10.06 (0.09%)
NASDAQ 2,417.92, +15.59 (0.65%)
S&P 500 1,169.77, +4.45 (0.38%)
NYSE Composite 7,489.62, +10.61 (0.14%)
Advancers beat decliners, 3259-2433. New highs: 394; New lows: 36. Volume was improved from Monday's holiday-held-back level.
NASDAQ Volume 1,984,735,250
NYSE Volume 4,233,061,500
Oil dropped 54 cents, to $81.67, heading back to the security of the $75-80 level. Gold lost $7.70, to $1,346.70, while silver slipped 20 cents, to $23.15.
Monday, October 11, 2010
Despite Denials, Foreclosure Fraud Issue Goes Mainstream
518 years ago, an Italian explorer by the name Christopher Columbus (actually the Anglicisation of the Latin Christophorus Columbus) landed on the shores of America (actually, he landed in the Bahamas), becoming the first European to land on either of the continent of the Americas.
Today, we are virtually assured that Columbus was preceded by Leif Ericson, possibly some 500 years earlier, and probably he wasn't even first, because Asians probably made their ways across the Alaskan archipelago to the "new world" many years prior to that.
Though Columbus could hardly have known that he wasn't the first, he was lauded for centuries as being the great explorer and we still honor him as the finder, even if not the first, of America, even though he missed it on his first voyage.
And today, on yet another celebration of his monumental discovery, we find that maybe he should have just turned back, because what happened afterwards were wars, nation-building, slaughter, more wars, nation-destroying and now, finally, complete fraud, deceit and the upcoming evaporation of five centuries of accumulated wealth, thanks to the same kind of people who fund these things, the giant banking cartel which began in the Netherlands and moved to England, and now resides mostly in the USA, mostly on the island of Manhattan.
What's at risk is nothing less than the entire banking and financial system under which all of us alive today (unless you were born prior to 1913, when the Federal Reserve Bank was created) and living in the USA have been subject to, made slaves by and are about to overthrow.
Because bankers are inherently lazy - doing almost nothing that could in any sense be considered real "work" - they have managed to mangle the residential real estate market to such a degree that nobody really knows who owns what in much of the country. It's really that simple when one unwinds all the fraud and inappropriate behavior conducted by the banks over the better part of the past ten years. And now we see the bankers squirming in denial that they've done anything wrong. So, why, may we ask, have three of the biggest banks halted all foreclosure activity in much of the country?
Because the jig is up, the game is over, the fraud can no longer be contained, the US people no longer lied to at every chance. We see lots of "tells" on the tube, mostly CNBC, where the banking elite are hidden from view, while their surrogates try to explain away why they can't proceed with foreclosures or sales of foreclosed-upon, bank-owned properties.
The truth is coming to light, little by little, that all that securitization of the mortgage business was a really bad idea and that the banks are about to be foreclosed upon from two angles, by the homeowners in default and the investors who bought the mortgage-backed securities (MBS).
On Sunday, CNBC let the proverbial cat out of the bag with a brief story, outlining how state Attorneys Generals are going to launch a joint probe into the mortgage foreclosure fiasco that's been percolating for at least three weeks (thought the fraud's been going on since 2003, at least).
Fascinating video from CNBC on the foreclosure-gate which now involves a nationwide self-imposed moratorium by Bank of America and moratoriums on foreclosures by Ally, Chase and PNC banks.
First, Joseph Murin, former president of the Government National Mortgage Association (Ginnie Mae) and Steve Forbes. Note how Murin defends the banksters when the issue of fraud is introduced, saying it's "absurd."
This is what poker players call a "tell." The player tips his or her hand in some way. Murin's "tell" is how he initially says that the banks need to reassess and see if procedures were followed correctly. Then he brings up the "antiquated systems" argument, which is a tip towards MERS taking over the normal role of county clerks. At around 2:20 into the video, Steve Forbes asks how many homeowners have been deprived of their homes, and Murin then brings up "fraud" completely on his own, saying, "I've heard the word "fraud" a lot, which is absurd. There's no fraud involved with this it's just... it's "process inadequacy..."
Apparently Mr. Murin has already scoured hundreds of thousands of foreclosure-related documents and found nothing wrong. Yeah, sure. Process inadequacy. Brilliant! Hilarious! Bravo! The banks, of course, did nothing wrong, again!
Next up, we have Mandy Drury asking the loaded question, "as attorneys general in states want to know if banks have been fraudulently foreclosing..." with Steve Moore, of the Wall Street Journal, and CNBC's Diana Olick & David Faber.
Diana Olick offers a timeline of two to four months for the foreclosure issues to be repaired, but notes it may probably be longer considering AG's looking into "potentially fraudulent documents." There's another tell, courtesy CNBC, the "F" word again.
At 3:50 into the video, CNBC's Scott Wapner mentions "fraud" and Moore jumps on him, asking "who are you alleging committed fraud?" Wapner backtracks quite a bit and Olick jumps on with a short burst about "who really owns the loan," which is really the issue at the heart of the fraud. The banks cannot, in many cases, produce the promissory notes or identify the note-holders. Without the note, servicing banks cannot foreclose because they have no standing in courts where things like law and equity and actual documents - not phony affidavits - matter.
Moore keeps insisting that "95 to 99 per cent of these foreclosure notices were correct. 19 out of 20 were the right ones." he also says a couple of times, "I'm not defending the banks." Way to CYA, Mr. Moore. You may not be defending the banks, even though you are. Cute.
Now, are we ready for catastrophe? Throwing their weight into the fray just after noon on Monday, SIFMA (Securities Industry and Financial Markets Association) says a nationwide foreclosure moratorium could be 'Catastrophic' to investors. This august group of BANKERS fails to mention the windfall for people, individuals and homeowners. All they're concerned about are their profits, not whether anyone actually freezes to death this winter as they are forced out of their homes and into the streets, legally or otherwise.
Get ready for the wheels of economy to come fully skidding off the tracks right after the upcoming "important" (don't bother, the electronic machines change all the votes, anyway) elections and right before the equally important holiday shopping season.
It's all a wonderful mess, thanks to bankers who should have been tried and jailed before they stole that $700 billion otherwise known as TARP. There may or may not be a TARP2, but if there is, if you think the economy's broken now, just wait. The whole country is broken.
As for the equally-absurd stock market, well, why bother? Stocks were up, as they always are in Ponzi-nation, but around 2:45, everything went right into the slime, with all indices falling briefly into the red before recovering to finish positive, though we're hearing now that some NYSE stocks are still open?
It was about the lowest trading volume of the past two years, and that's pretty low. It was a holiday, after all, but how can they manage to get the indices just above the unchanged mark like that?
Dow 11,010.34, +3.86 (0.04%)
NASDAQ 2,402.33, +0.42 (0.02%)
S&P 500 1,165.32, +0.17 (0.01%)
NYSE Composite 7,479.01, +0.59 (0.01%)
NASDAQ Volume 1,551,449,250
NYSE Volume 3,214,674,500
Oil was down 45 cents, to $82.21, because the few people still working in the Western economies can only afford to drive to and from work. Gold made another new record, up $9.10, to $1,354.40, and silver added 24 cents, to $23.35. The precious metals (PMs) were higher because the US dollar and most other currencies will soon be worthless. Give it six months to a year, maybe sooner, but stock up on veggies and, if you have a freezer, meats. everything you need to survive is going to get a lot more expensive as the economy nose-dives into depression.
Yes, it's a lot worse than you think.
Though Columbus could hardly have known that he wasn't the first, he was lauded for centuries as being the great explorer and we still honor him as the finder, even if not the first, of America, even though he missed it on his first voyage.
And today, on yet another celebration of his monumental discovery, we find that maybe he should have just turned back, because what happened afterwards were wars, nation-building, slaughter, more wars, nation-destroying and now, finally, complete fraud, deceit and the upcoming evaporation of five centuries of accumulated wealth, thanks to the same kind of people who fund these things, the giant banking cartel which began in the Netherlands and moved to England, and now resides mostly in the USA, mostly on the island of Manhattan.
What's at risk is nothing less than the entire banking and financial system under which all of us alive today (unless you were born prior to 1913, when the Federal Reserve Bank was created) and living in the USA have been subject to, made slaves by and are about to overthrow.
Because bankers are inherently lazy - doing almost nothing that could in any sense be considered real "work" - they have managed to mangle the residential real estate market to such a degree that nobody really knows who owns what in much of the country. It's really that simple when one unwinds all the fraud and inappropriate behavior conducted by the banks over the better part of the past ten years. And now we see the bankers squirming in denial that they've done anything wrong. So, why, may we ask, have three of the biggest banks halted all foreclosure activity in much of the country?
Because the jig is up, the game is over, the fraud can no longer be contained, the US people no longer lied to at every chance. We see lots of "tells" on the tube, mostly CNBC, where the banking elite are hidden from view, while their surrogates try to explain away why they can't proceed with foreclosures or sales of foreclosed-upon, bank-owned properties.
The truth is coming to light, little by little, that all that securitization of the mortgage business was a really bad idea and that the banks are about to be foreclosed upon from two angles, by the homeowners in default and the investors who bought the mortgage-backed securities (MBS).
On Sunday, CNBC let the proverbial cat out of the bag with a brief story, outlining how state Attorneys Generals are going to launch a joint probe into the mortgage foreclosure fiasco that's been percolating for at least three weeks (thought the fraud's been going on since 2003, at least).
Fascinating video from CNBC on the foreclosure-gate which now involves a nationwide self-imposed moratorium by Bank of America and moratoriums on foreclosures by Ally, Chase and PNC banks.
First, Joseph Murin, former president of the Government National Mortgage Association (Ginnie Mae) and Steve Forbes. Note how Murin defends the banksters when the issue of fraud is introduced, saying it's "absurd."
This is what poker players call a "tell." The player tips his or her hand in some way. Murin's "tell" is how he initially says that the banks need to reassess and see if procedures were followed correctly. Then he brings up the "antiquated systems" argument, which is a tip towards MERS taking over the normal role of county clerks. At around 2:20 into the video, Steve Forbes asks how many homeowners have been deprived of their homes, and Murin then brings up "fraud" completely on his own, saying, "I've heard the word "fraud" a lot, which is absurd. There's no fraud involved with this it's just... it's "process inadequacy..."
Apparently Mr. Murin has already scoured hundreds of thousands of foreclosure-related documents and found nothing wrong. Yeah, sure. Process inadequacy. Brilliant! Hilarious! Bravo! The banks, of course, did nothing wrong, again!
Next up, we have Mandy Drury asking the loaded question, "as attorneys general in states want to know if banks have been fraudulently foreclosing..." with Steve Moore, of the Wall Street Journal, and CNBC's Diana Olick & David Faber.
Diana Olick offers a timeline of two to four months for the foreclosure issues to be repaired, but notes it may probably be longer considering AG's looking into "potentially fraudulent documents." There's another tell, courtesy CNBC, the "F" word again.
At 3:50 into the video, CNBC's Scott Wapner mentions "fraud" and Moore jumps on him, asking "who are you alleging committed fraud?" Wapner backtracks quite a bit and Olick jumps on with a short burst about "who really owns the loan," which is really the issue at the heart of the fraud. The banks cannot, in many cases, produce the promissory notes or identify the note-holders. Without the note, servicing banks cannot foreclose because they have no standing in courts where things like law and equity and actual documents - not phony affidavits - matter.
Moore keeps insisting that "95 to 99 per cent of these foreclosure notices were correct. 19 out of 20 were the right ones." he also says a couple of times, "I'm not defending the banks." Way to CYA, Mr. Moore. You may not be defending the banks, even though you are. Cute.
Now, are we ready for catastrophe? Throwing their weight into the fray just after noon on Monday, SIFMA (Securities Industry and Financial Markets Association) says a nationwide foreclosure moratorium could be 'Catastrophic' to investors. This august group of BANKERS fails to mention the windfall for people, individuals and homeowners. All they're concerned about are their profits, not whether anyone actually freezes to death this winter as they are forced out of their homes and into the streets, legally or otherwise.
Get ready for the wheels of economy to come fully skidding off the tracks right after the upcoming "important" (don't bother, the electronic machines change all the votes, anyway) elections and right before the equally important holiday shopping season.
It's all a wonderful mess, thanks to bankers who should have been tried and jailed before they stole that $700 billion otherwise known as TARP. There may or may not be a TARP2, but if there is, if you think the economy's broken now, just wait. The whole country is broken.
As for the equally-absurd stock market, well, why bother? Stocks were up, as they always are in Ponzi-nation, but around 2:45, everything went right into the slime, with all indices falling briefly into the red before recovering to finish positive, though we're hearing now that some NYSE stocks are still open?
It was about the lowest trading volume of the past two years, and that's pretty low. It was a holiday, after all, but how can they manage to get the indices just above the unchanged mark like that?
Dow 11,010.34, +3.86 (0.04%)
NASDAQ 2,402.33, +0.42 (0.02%)
S&P 500 1,165.32, +0.17 (0.01%)
NYSE Composite 7,479.01, +0.59 (0.01%)
NASDAQ Volume 1,551,449,250
NYSE Volume 3,214,674,500
Oil was down 45 cents, to $82.21, because the few people still working in the Western economies can only afford to drive to and from work. Gold made another new record, up $9.10, to $1,354.40, and silver added 24 cents, to $23.35. The precious metals (PMs) were higher because the US dollar and most other currencies will soon be worthless. Give it six months to a year, maybe sooner, but stock up on veggies and, if you have a freezer, meats. everything you need to survive is going to get a lot more expensive as the economy nose-dives into depression.
Yes, it's a lot worse than you think.
Thursday, October 7, 2010
Obama Defies Banks with Pocket Veto
You know it's a slow news day when all there is to report on is what didn't happen, and that would be President Obama not signing HR 3808, the Recognition of Notarizations Act, which would have forced federal and state courts to recognize notary signatures - including digital signatures - from other states, and was widely seen as an attempt by the banking lobby to do an end run around the "robo-signing" foreclosure mess they've created by having bank and processing firms' employees sign off on enormous rafts of affidavits without reading them.
In the midst of a foreclosure moratorium by Ally Bank, JP Morgan Chase and Bank of America, the timing of the passage of the bill raised eyebrows and brought forth derision from homeowner advocates.
The bill was passed by the House and Senate and presented to Obama on September 30. The bill had failed to pass the senate on two previous occasions, but spurred on by last-minute wrangling by senators Pat Leahey (D-VT) and Jeff Sessions (R-AL) the measure passed the senate without debate on a voice vote by unanimous consent. No record of the vote in either house was recorded, so the criminal congress, which gets much of its funding from the criminal enterprise known as the Too Big To Fail Banks, gets a free pass on this one with plenty of plausible deniability.
Though the bill was unlikely to ease the pain of the banks as they wade through hundreds of thousands of foreclosures, many of which will now be contested since their paperwork has been exposed as faulty at best and outright fraudulent at worst, the President opted to send the bill back to the congress, citing, in Press Secretary Robert Gibbs' words, "unintended consequences," obviously referring to the foreclosure scandal that's been accelerating over the past two to three weeks.
That was big news for homeowners in foreclosure in the 23 states that are defined as "judicial" foreclosure states, who will likely be allowed to remain in their homes without having to pay their mortgage nor be hounded by the servicing banks for up to a year or longer, according to sources such as Business Week.
Originally downplayed by the banks, the extent of the fraud - with much of the underlying paperwork in the affidavits referring to title and ownership, and thus, standing in foreclosure at fault, attorneys general from a handful of states have already called on the banks to halt foreclosures. Ohio AG, Richard Cordray, has already started a lawsuit against Ally Bank (formerly GMAC) and is close to suing Bank of America and JP Morgan Chase.
Late Wednesday, US Attorney General Eric Holder, after being prompted by House Speaker Nancy Pelosi and other prominent Democrats, has ordered an investigation into foreclosure practices under the auspices of the financial fraud enforcement task force, formed last year in the aftermath of the market meltdown, TARP and the associated issues stemming from the original subprime crisis in 2008.
All of this didn't move markets much at all, though both JP Morgan Chase (JPM) and Bank of America (BAC) were lower at session's end.
For the most part, traders were patiently awaiting the release of the September Non-Farm Payroll report from the Bureau of Labor Statistics, due out Friday morning at 8:30 am ET. Consensus estimates are for a gain of 60,000 jobs between the private and public sectors. On Wednesday, ADP reported a September loss of 39,000 private sector jobs in their monthly survey.
Dow 10,948.58, -19.07 (0.17%)
NASDAQ 2,383.67, +3.01 (0.13%)
S&P 500 1,158.06, -1.91 (0.16%)
NYSE Composite 7,425.01, -23.32 (0.31%)
NASDAQ Volume 1,856,212,625
NYSE Volume 4,056,364,500
Declining issues held a small edge over advancers, 3114-2568. New highs led new lows, 423-37. Volume was anemic, the worst in two weeks, and the past two weeks haven't been particularly strong. Equities have been hovering around their highs for most of the week, so the jobs report Friday may provide some direction to this listless market, though it would be no surprise to see it just languish within a tight range until after the midterm elections on November 2nd, which also coincides with a FOMC meeting at which the Fed is widely assumed to announce some new QE plan, thrusting billions of dollars into the moribund credit system.
After weeks of rallying higher, commodities performed an abrupt change of direction on Thursday, with crude oil futures hammered $1.56 lower, to $81.67 at the close on the NYMEX. The latest print for gold was at $1333.60, down $15.50, though it traded as high as $1365 on the day. Silver also took a header, losing 69 cents, to $22.50.
Chartists and fundamental analysis predicted some kind of easing in the precious metals especially, as they have been on an historic tear since the middle of August without so much as a 3% pullback. Oil also had escaped its longtime range between $70 and $80, though the move above the high end might be nothing more than naked speculation as supply-demand dynamics do not support higher prices. Mostly, the move up in oil was tied to the decline of the US dollar, which has fallen 14% in the past three months against other major currencies.
Not bad for a slow news day.
In the midst of a foreclosure moratorium by Ally Bank, JP Morgan Chase and Bank of America, the timing of the passage of the bill raised eyebrows and brought forth derision from homeowner advocates.
The bill was passed by the House and Senate and presented to Obama on September 30. The bill had failed to pass the senate on two previous occasions, but spurred on by last-minute wrangling by senators Pat Leahey (D-VT) and Jeff Sessions (R-AL) the measure passed the senate without debate on a voice vote by unanimous consent. No record of the vote in either house was recorded, so the criminal congress, which gets much of its funding from the criminal enterprise known as the Too Big To Fail Banks, gets a free pass on this one with plenty of plausible deniability.
Though the bill was unlikely to ease the pain of the banks as they wade through hundreds of thousands of foreclosures, many of which will now be contested since their paperwork has been exposed as faulty at best and outright fraudulent at worst, the President opted to send the bill back to the congress, citing, in Press Secretary Robert Gibbs' words, "unintended consequences," obviously referring to the foreclosure scandal that's been accelerating over the past two to three weeks.
That was big news for homeowners in foreclosure in the 23 states that are defined as "judicial" foreclosure states, who will likely be allowed to remain in their homes without having to pay their mortgage nor be hounded by the servicing banks for up to a year or longer, according to sources such as Business Week.
Originally downplayed by the banks, the extent of the fraud - with much of the underlying paperwork in the affidavits referring to title and ownership, and thus, standing in foreclosure at fault, attorneys general from a handful of states have already called on the banks to halt foreclosures. Ohio AG, Richard Cordray, has already started a lawsuit against Ally Bank (formerly GMAC) and is close to suing Bank of America and JP Morgan Chase.
Late Wednesday, US Attorney General Eric Holder, after being prompted by House Speaker Nancy Pelosi and other prominent Democrats, has ordered an investigation into foreclosure practices under the auspices of the financial fraud enforcement task force, formed last year in the aftermath of the market meltdown, TARP and the associated issues stemming from the original subprime crisis in 2008.
All of this didn't move markets much at all, though both JP Morgan Chase (JPM) and Bank of America (BAC) were lower at session's end.
For the most part, traders were patiently awaiting the release of the September Non-Farm Payroll report from the Bureau of Labor Statistics, due out Friday morning at 8:30 am ET. Consensus estimates are for a gain of 60,000 jobs between the private and public sectors. On Wednesday, ADP reported a September loss of 39,000 private sector jobs in their monthly survey.
Dow 10,948.58, -19.07 (0.17%)
NASDAQ 2,383.67, +3.01 (0.13%)
S&P 500 1,158.06, -1.91 (0.16%)
NYSE Composite 7,425.01, -23.32 (0.31%)
NASDAQ Volume 1,856,212,625
NYSE Volume 4,056,364,500
Declining issues held a small edge over advancers, 3114-2568. New highs led new lows, 423-37. Volume was anemic, the worst in two weeks, and the past two weeks haven't been particularly strong. Equities have been hovering around their highs for most of the week, so the jobs report Friday may provide some direction to this listless market, though it would be no surprise to see it just languish within a tight range until after the midterm elections on November 2nd, which also coincides with a FOMC meeting at which the Fed is widely assumed to announce some new QE plan, thrusting billions of dollars into the moribund credit system.
After weeks of rallying higher, commodities performed an abrupt change of direction on Thursday, with crude oil futures hammered $1.56 lower, to $81.67 at the close on the NYMEX. The latest print for gold was at $1333.60, down $15.50, though it traded as high as $1365 on the day. Silver also took a header, losing 69 cents, to $22.50.
Chartists and fundamental analysis predicted some kind of easing in the precious metals especially, as they have been on an historic tear since the middle of August without so much as a 3% pullback. Oil also had escaped its longtime range between $70 and $80, though the move above the high end might be nothing more than naked speculation as supply-demand dynamics do not support higher prices. Mostly, the move up in oil was tied to the decline of the US dollar, which has fallen 14% in the past three months against other major currencies.
Not bad for a slow news day.
Tuesday, October 5, 2010
Title, Standing at Heart of Foreclosure Disaster; Stocks Don't Care, Rally
Finally, the truth about affidavits which are at the heart of the "robo-signing" scandal comes to light, courtesy of a must-read, NY Times front page story by Gretchen Morgenson.
The key passage:
Now we know that what mid-level employees at GMAC (now Ally Bank), JP Morgan Chase, and Bank of America were signing off on were attestations of mortgage assignments between banks and securitization trusts, i.e., the supposed note-holding investors. The sad truth is that the original notes have been lost, misplaced, trashed or somehow dispossessed, and the servicing banks - which have no standing to foreclose - have been scrambling for alternatives. In light of the fraudulent manner in which the banks have been handling real estate business for the past five to ten years, it's entirely possible that even the information in the robo-signed affidavits is faulty, incorrect or woven entirely from unwholesome cloth.
This issue has not escaped the notice of some quick-draw attorneys in Kentucky, who have filed a class-action RICO lawsuit on behalf of all Kentucky homeowners in foreclosure, against Citigroup, Ally Bank and MERS (Mortgage Electronic Registration System), claiming that through MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.
Lender Processing Services (LPS), one of the foreclosure mills at the heart of the controversy and unfolding legal drama, traded as high as 44 within the last year, but has been in decline lately. Over just the past three trading sessions, the company's stock - which went public just two years ago - has fallen from a high of 33.50 on Friday to a low of 25.50 today. Company executives were busy explaining discrepancies in signatures on various foreclosure documents.
The issue was discussed in a heated segment on CNBC's "The Kudlow Report" Monday night, with host Larry Kudlow calling the situation "chaos." Note Kudlow's shocked and animated appearance during the segment below. Obviously, he's aware of the potential long-term ramifications of these developments.
At issue is nothing less than the credibility of the banks and the legal system. In Florida, where foreclosure cases are being heard in courtroom hallways and by retired judges due to the overwhelming volume of cases, the "rocket docket" has given the banks the benefit of the doubt when the reality may be that many servicing banks didn't actually have standing to foreclose and may have used forged, fraudulent documents to take homes from unsuspecting owners.
None of this was worthwhile news on Wall Street, however, as investors took advantage of a weak US dollar and hints of more QE by the Federal Reserve to boost stocks in a day-long rally.
Dow 10,944.72, +193.45 (1.80%)
NASDAQ 2,399.83, +55.31 (2.36%)
S&P 500 1,160.75, +23.72 (2.09%)
NYSE Composite 7,434.18, +161.65 (2.22%)
Advancers buried decliners on the day, 4682-1078. New highs towered over new lows, 550-32. For a change, volume was actually quite robust.
NASDAQ Volume 2,234,181,500
NYSE Volume 4,932,642,500
Commodities made enormous moves on the back of the declining dollar. Crude oil for November delivery soared $1.35, to $82.82 on the NYMEX. Gold advanced $23.50, to $1,340.30 another all-time high, while silver rose an astonishing 70 cents, to $22.74, a 3.18% move.
The moves in the stock market may be fleeting however, as investors brace for the release of key jobs data. At 8:15 am Wednesday the ADP Employment Change will hit the wires. Expectations are for a feeble number of just 20,000 private sector jobs created in September.
On Friday, the Bureau of Labor Statistics reports on non-farm payrolls for the prior month with expectations for a loss of 18,000 jobs overall and an unemployment rate of 9.7%. The figures are distressing to most people but seem to have little effect on Wall Street as continued high unemployment simply doesn't seem to be a metric most traders wish to look at with any kind of fundamental analysis.
With earnings beginning to take center stage, employment data may be simply overlooked, something investors will do at their own peril. With the true unemployment rate hovering around 18-20%, one has to wonder how long Wall Street can remain in denial as the underlying US economy continues to deteriorate.
As we've learned from the dotcom explosion, the subprime disaster and the general market malaise of 2008, denial can be an ongoing condition until well after the crisis has become severe. As elections loom ever closer, stocks seem to be in a highly volatile state, with valuations not reflective of economic realities.
Today, stocks seem like no-lose investments. The key question is how long will they remain floating on a bubble of cheap or free money when the underlying debt conditions appear to be creaking and groaning for relief.
The key passage:
"The byzantine mortgage securitization process that helped inflate the housing bubble allowed home loans to change hands so many times before they were eventually pooled and sold to investors that it is now extremely difficult to track exactly which lenders have claims to a home.
Many lenders or loan servicers that begin the foreclosure process after a borrower defaults do not produce documentation proving that they have the legal right to foreclosure, known as standing.
As a substitute, the banks usually present affidavits attesting to ownership of the note signed by an employee of a legal services firm acting as an agent for the lender or loan servicer."
Now we know that what mid-level employees at GMAC (now Ally Bank), JP Morgan Chase, and Bank of America were signing off on were attestations of mortgage assignments between banks and securitization trusts, i.e., the supposed note-holding investors. The sad truth is that the original notes have been lost, misplaced, trashed or somehow dispossessed, and the servicing banks - which have no standing to foreclose - have been scrambling for alternatives. In light of the fraudulent manner in which the banks have been handling real estate business for the past five to ten years, it's entirely possible that even the information in the robo-signed affidavits is faulty, incorrect or woven entirely from unwholesome cloth.
This issue has not escaped the notice of some quick-draw attorneys in Kentucky, who have filed a class-action RICO lawsuit on behalf of all Kentucky homeowners in foreclosure, against Citigroup, Ally Bank and MERS (Mortgage Electronic Registration System), claiming that through MERS the banks are foreclosing on homes even when they don’t hold titles to the properties.
Lender Processing Services (LPS), one of the foreclosure mills at the heart of the controversy and unfolding legal drama, traded as high as 44 within the last year, but has been in decline lately. Over just the past three trading sessions, the company's stock - which went public just two years ago - has fallen from a high of 33.50 on Friday to a low of 25.50 today. Company executives were busy explaining discrepancies in signatures on various foreclosure documents.
The issue was discussed in a heated segment on CNBC's "The Kudlow Report" Monday night, with host Larry Kudlow calling the situation "chaos." Note Kudlow's shocked and animated appearance during the segment below. Obviously, he's aware of the potential long-term ramifications of these developments.
At issue is nothing less than the credibility of the banks and the legal system. In Florida, where foreclosure cases are being heard in courtroom hallways and by retired judges due to the overwhelming volume of cases, the "rocket docket" has given the banks the benefit of the doubt when the reality may be that many servicing banks didn't actually have standing to foreclose and may have used forged, fraudulent documents to take homes from unsuspecting owners.
None of this was worthwhile news on Wall Street, however, as investors took advantage of a weak US dollar and hints of more QE by the Federal Reserve to boost stocks in a day-long rally.
Dow 10,944.72, +193.45 (1.80%)
NASDAQ 2,399.83, +55.31 (2.36%)
S&P 500 1,160.75, +23.72 (2.09%)
NYSE Composite 7,434.18, +161.65 (2.22%)
Advancers buried decliners on the day, 4682-1078. New highs towered over new lows, 550-32. For a change, volume was actually quite robust.
NASDAQ Volume 2,234,181,500
NYSE Volume 4,932,642,500
Commodities made enormous moves on the back of the declining dollar. Crude oil for November delivery soared $1.35, to $82.82 on the NYMEX. Gold advanced $23.50, to $1,340.30 another all-time high, while silver rose an astonishing 70 cents, to $22.74, a 3.18% move.
The moves in the stock market may be fleeting however, as investors brace for the release of key jobs data. At 8:15 am Wednesday the ADP Employment Change will hit the wires. Expectations are for a feeble number of just 20,000 private sector jobs created in September.
On Friday, the Bureau of Labor Statistics reports on non-farm payrolls for the prior month with expectations for a loss of 18,000 jobs overall and an unemployment rate of 9.7%. The figures are distressing to most people but seem to have little effect on Wall Street as continued high unemployment simply doesn't seem to be a metric most traders wish to look at with any kind of fundamental analysis.
With earnings beginning to take center stage, employment data may be simply overlooked, something investors will do at their own peril. With the true unemployment rate hovering around 18-20%, one has to wonder how long Wall Street can remain in denial as the underlying US economy continues to deteriorate.
As we've learned from the dotcom explosion, the subprime disaster and the general market malaise of 2008, denial can be an ongoing condition until well after the crisis has become severe. As elections loom ever closer, stocks seem to be in a highly volatile state, with valuations not reflective of economic realities.
Today, stocks seem like no-lose investments. The key question is how long will they remain floating on a bubble of cheap or free money when the underlying debt conditions appear to be creaking and groaning for relief.
Monday, October 4, 2010
Wall Street Sell-Off; Foreclosure Fraud Issue Grows
Investors weren't interested in buying much of anything on Monday. In fact, the selling pressure persisted from the opening bell to the close as the major indices took a turn lower.
Selling was broad-based with most of the blame placed upon the rising US dollar, as inside players unloaded some of their more profitable trades built up over the past month. With stocks up roughly 9% in September, October should, by shear market dynamics - or, what's left of them in this low-volume regime - revert to the mean, suggesting a 5-7% decline in stocks overall, though a complete reversal cannot be ruled out.
Dow 10,751.27, -78.41 (0.72%)
NASDAQ 2,344.52, -26.23 (1.11%)
S&P 500 1,137.03, -9.21 (0.80%)
NYSE Composite 7,272.53, -63.38(0.86%)
Decliners finished well ahead of advancing issues, 4312-1529. New highs maintained their large edge over new lows, 304-41. Volume was dull, at best.
NASDAQ Volume 1,922,075,250
NYSE Volume 3,770,310,500
Oil, which had traded higher through most of the session, fell victim to heavy selling pressure, losing 11 cents, to $81.47. Precious metals took a bit of a breather, with gold off $1.00, to $1,316.80, and silver losing 2 cents, to $22.04.
Gaining momentum was the ongoing foreclosure fraud story, which is larger than the mainstream media wishes to believe. Late Friday, the nation's largest mortgage servicer, Bank of America, announced that they were halting foreclosures in the 23 states which have judicial foreclosure processes. This news came late in the day, on a report that one of their employees admitted to signing as many as 8000 affadavits in a month without reading their contents.
This was the same kind of issue which caused Ally Bank - formerly GMAC - and JP Morgan Chase to halt foreclosure proceedings in the same states earlier last week.
Over the weekend it was learned that title insurers were in communication with officials from Fannie Mae and Freddie Mac, over the issue of clouded titles on homes sold post-foreclosure, some even going so far as to deny writing title insurance on some properties.
The issue enlarges when one considers the overall ramifications of falsifying documents. The very banks which began the mess by issuing bad mortgage products to unqualified buyers - knowing they had a high risk of default - and then packaging the mortgages into security instruments sold to equally in-the-dark investors, are now attempting to rush through the foreclosure process with another round of fraud, in the form of faulty paperwork submitted to courts across the country.
At the very heart of the issue is ownership, or title, to the properties. When the banks securitized these mortgages, they separated the mortgage from the note, a practice long held to cause title issues, and never before attempted.
Allegations that the banks had this purpose in mind all along, defrauding the note-holders as well as the home-buyers, are gaining traction in legal circles. Some states are calling for complete moratorium on foreclosures until the depth of the fraud is revealed.
What is not occurring are calls for criminal prosecution of the banks which engaged in the practice of defrauding courts, though it appears clear that the practice of rushing paperwork without due diligence - thus denying due process - was as widespread as the subprime and 80/20 loans the banks were pushing and securitizing years earlier.
There should be no downplaying of the seriousness of the issue, though there was no mention of the scandal - and a scandal it indeed is - on any of the Sunday talk shows, weekend nightly news shows nor Monday morning talk programs from the major networks.
If titles to homes are in such a state of confusion that the chain of ownership cannot be maintained, identified and indemnified, the variety and scope of claims and counter-claims threatens to clog the court system for years, which, in a cynical way, might be what the unscrupulous banking interests wanted from the very start.
Without oversight and regulation, this is what happens to money and markets. Insidious operators will take advantage of loose regulations and loopholes and drive billions through them in dirty transactions, which is what appears to have happened on Wall Street, in county clerk offices and courtrooms across the country.
In a perverse kind of way, this overhanging, unresolved issue, one which threatens the entire banking and credit system again, may have been the hidden catalyst behind plenty of today's equity sales.
This scandal is only beginning, with much more to be revealed in coming weeks and months. with elections front and center, and a questionable terror alert being issued by the US, conspriacy theorists are having a field day trying to tie all of this together. It does make perfect sense that politicians and banksters, working in cohort behind the scenes, would attempt to either delay more allegations of fraud or blow them up prior to the elections, depending on the style of tin-foil of your particular hat.
Fraud should be taken seriously, however, though when it comes to banks, they apparently can get away with just about anything, calling it "procedural errors" or "paperwork issues." In the end, the truth will come out, and the US economy will be the worse for it.
Selling was broad-based with most of the blame placed upon the rising US dollar, as inside players unloaded some of their more profitable trades built up over the past month. With stocks up roughly 9% in September, October should, by shear market dynamics - or, what's left of them in this low-volume regime - revert to the mean, suggesting a 5-7% decline in stocks overall, though a complete reversal cannot be ruled out.
Dow 10,751.27, -78.41 (0.72%)
NASDAQ 2,344.52, -26.23 (1.11%)
S&P 500 1,137.03, -9.21 (0.80%)
NYSE Composite 7,272.53, -63.38(0.86%)
Decliners finished well ahead of advancing issues, 4312-1529. New highs maintained their large edge over new lows, 304-41. Volume was dull, at best.
NASDAQ Volume 1,922,075,250
NYSE Volume 3,770,310,500
Oil, which had traded higher through most of the session, fell victim to heavy selling pressure, losing 11 cents, to $81.47. Precious metals took a bit of a breather, with gold off $1.00, to $1,316.80, and silver losing 2 cents, to $22.04.
Gaining momentum was the ongoing foreclosure fraud story, which is larger than the mainstream media wishes to believe. Late Friday, the nation's largest mortgage servicer, Bank of America, announced that they were halting foreclosures in the 23 states which have judicial foreclosure processes. This news came late in the day, on a report that one of their employees admitted to signing as many as 8000 affadavits in a month without reading their contents.
This was the same kind of issue which caused Ally Bank - formerly GMAC - and JP Morgan Chase to halt foreclosure proceedings in the same states earlier last week.
Over the weekend it was learned that title insurers were in communication with officials from Fannie Mae and Freddie Mac, over the issue of clouded titles on homes sold post-foreclosure, some even going so far as to deny writing title insurance on some properties.
The issue enlarges when one considers the overall ramifications of falsifying documents. The very banks which began the mess by issuing bad mortgage products to unqualified buyers - knowing they had a high risk of default - and then packaging the mortgages into security instruments sold to equally in-the-dark investors, are now attempting to rush through the foreclosure process with another round of fraud, in the form of faulty paperwork submitted to courts across the country.
At the very heart of the issue is ownership, or title, to the properties. When the banks securitized these mortgages, they separated the mortgage from the note, a practice long held to cause title issues, and never before attempted.
Allegations that the banks had this purpose in mind all along, defrauding the note-holders as well as the home-buyers, are gaining traction in legal circles. Some states are calling for complete moratorium on foreclosures until the depth of the fraud is revealed.
What is not occurring are calls for criminal prosecution of the banks which engaged in the practice of defrauding courts, though it appears clear that the practice of rushing paperwork without due diligence - thus denying due process - was as widespread as the subprime and 80/20 loans the banks were pushing and securitizing years earlier.
There should be no downplaying of the seriousness of the issue, though there was no mention of the scandal - and a scandal it indeed is - on any of the Sunday talk shows, weekend nightly news shows nor Monday morning talk programs from the major networks.
If titles to homes are in such a state of confusion that the chain of ownership cannot be maintained, identified and indemnified, the variety and scope of claims and counter-claims threatens to clog the court system for years, which, in a cynical way, might be what the unscrupulous banking interests wanted from the very start.
Without oversight and regulation, this is what happens to money and markets. Insidious operators will take advantage of loose regulations and loopholes and drive billions through them in dirty transactions, which is what appears to have happened on Wall Street, in county clerk offices and courtrooms across the country.
In a perverse kind of way, this overhanging, unresolved issue, one which threatens the entire banking and credit system again, may have been the hidden catalyst behind plenty of today's equity sales.
This scandal is only beginning, with much more to be revealed in coming weeks and months. with elections front and center, and a questionable terror alert being issued by the US, conspriacy theorists are having a field day trying to tie all of this together. It does make perfect sense that politicians and banksters, working in cohort behind the scenes, would attempt to either delay more allegations of fraud or blow them up prior to the elections, depending on the style of tin-foil of your particular hat.
Fraud should be taken seriously, however, though when it comes to banks, they apparently can get away with just about anything, calling it "procedural errors" or "paperwork issues." In the end, the truth will come out, and the US economy will be the worse for it.
Thursday, September 16, 2010
Wheels Coming Off Global Economy
Today may have been a watershed day for the demise of the global economy. There were any number of troubling events - most of which were completely overlooked by the computers making trades on US markets - that signal a major event could decouple governments from their economies, people from their money, banks from credits, and on and on...
Take, for instance, the activity in the Forex markets, where the Bank of Japan decided to intervene for the first time in six years, to keep the Yen from appreciating. The intervention actually took place on Wednesday, but it's effects will be far-reaching and continual. All currencies are seeking levels at which they can find comfort in trade - cheap imports, value on exports - but, not everybody can have it their way, obviously. These kinds of things lead to crises, political, economic and sometimes military.
But that's probably not going to get too many people worked up. Maybe the thought of foreclosures on the rise might suffice. The banks are apparently trying to manage the foreclosure process, in other words, slowing it down so that they don't create a glut of homes on the market and cause prices to fall even further.
It's a gamble that isn't likely to work out, however. Prices do what they're supposed to do. Mismanaged properties sell for less. Homes which were overpriced to begin with will find their correct level. Despite what the bankers holding most of the mortgages (Bank of America) believe, Americans are smarter than they think, and with an economy suffering from 20% real unemployment, keeping prices suspended artificially is probably more wishful thinking than prudent planning.
The real estate market has gone through this before, as in the past two years the flood of foreclosures was partially stemmed by various government programs and tax bribes, modifications and work-outs. Home prices fell precipitously, nevertheless. So, as with anything having to do with banks these days, we offer a hearty, "good luck with that!"
How about thinking ahead a bit, like how much you'll be taking in every month when you're retired? The news there isn't very rosy either. Here's a report that offers the sobering conclusion that at the end of 2008 (hey, that was almost two years ago!), public pension funds were experiencing a shortfall of anywhere between $1 Trillion and $4.4 TRILLION! That's a lot of money that people are unlikely to be receiving in their "golden years."
But, that's just the start of it. Of the more than 1700 publicly-traded companies which operate pension plans for employees almost all of them are seriously underfunded. "The assets of corporate pensions relative to their deficits, known as the funded ratio, fell to 70.1% in August..." says a report by the Milliman 100 Pension Funding Index.
And that's without even looking at Social Security or Medicare, both systems hopelessly bankrupt and already bleeding red ink. When baby-boomers begin retiring in droves in the next two to five years, the systems will be beyond repair and likely need major modifications, such as no COLA, raised retirement ages and lower benefits. (Ed. Note: Being 56 myself, this doesn't make me necessarily happy, though my choice to not pay into any kind of pension plan and avoid SS tax at all costs now seems a prudent maneuver.)
OK, had enough? How about chewing on an arcane document of the American Monetary Institute from 2004, delivered by Director Stephen Zarlenga to the British House of Lords, which outlines, among other things, how government issuing money (not the Federal Reserve, a private bank), without the backing of gold or silver, has been the most fruitful.
This shoots major holes in the argument that "gold is money," and a true store of value and all the other clap-trap that have made gold the most speculative, over-priced commodity on the planet. As I and some non-gold-infused friends like to say, "you can't eat a gold bar and you can't buy a candy bar with it", or, "try buying a loaf of bread with a Kruggerand. Ypu've have better luck buying the whole bakery."
So much for the bad news. There was some good news, somewhere, but nobody seemed able to locate it. Nonetheless, the computers trading US stocks (You do know that 70% of all trades are executed without human involvement, don't you?) managed to issue forth another split decision, with the Dow and NASDAQ up, but the S&P and NYSE down, that, in itself, troubling. market divergence is almost always a telling sign that a correction isn't far off. Making matters more complex and compelling, trading volumes were down to absurdly low levels once again, running at a rate 30% below last year.
Dow 10,594.83, +22.10 (0.21%)
NASDAQ 2,303.25, +1.93 (0.08%)
S&P 500 1,124.66, -0.41 (0.04%)
NYSE Composite 7,169.48, -10.31 (0.14%)
In opposition to the benign headline numbers, declining issues pounded advancers, 3419-2260. The number of new highs to new lows remained static and statistically insignificant, at 308-48.
NASDAQ Volume 1,703,297,625
NYSE Volume 3,354,712,000
Crude oil futures were slammed down $1.45, to $74.57, but gold made another all-time high, at $1,271.90. up $5.20. Silver kept climbing in stride, up 20 cents, to $20.74.
Now, if there's anything we should have learned from first, the tech bubble of the late 90s and second, the housing bubble of the 2000s, that when the object of the bubble is advertised heavily on TV - remember Pets.com? How about 125% home equiy loans? - it's usually safe to say the asset is overpriced and due for a fall. It happened with tech stocks. It happened with houses, so it's probably going to happen with gold (and probably silver) because of the rampant number of ads telling us to buy gold, cash in our gold and get gold or cash in some manner. It's a mania, pure and simple. Gold and silver have increased in value by 400% or more over the past decade. When will it end? Nobody really knows, but buying at these nosebleed levels is the stuff of fools. Real estate looks much better, especially if you're assigned to the basic tenet of all investing, "buy low, sell high."
Take, for instance, the activity in the Forex markets, where the Bank of Japan decided to intervene for the first time in six years, to keep the Yen from appreciating. The intervention actually took place on Wednesday, but it's effects will be far-reaching and continual. All currencies are seeking levels at which they can find comfort in trade - cheap imports, value on exports - but, not everybody can have it their way, obviously. These kinds of things lead to crises, political, economic and sometimes military.
But that's probably not going to get too many people worked up. Maybe the thought of foreclosures on the rise might suffice. The banks are apparently trying to manage the foreclosure process, in other words, slowing it down so that they don't create a glut of homes on the market and cause prices to fall even further.
It's a gamble that isn't likely to work out, however. Prices do what they're supposed to do. Mismanaged properties sell for less. Homes which were overpriced to begin with will find their correct level. Despite what the bankers holding most of the mortgages (Bank of America) believe, Americans are smarter than they think, and with an economy suffering from 20% real unemployment, keeping prices suspended artificially is probably more wishful thinking than prudent planning.
The real estate market has gone through this before, as in the past two years the flood of foreclosures was partially stemmed by various government programs and tax bribes, modifications and work-outs. Home prices fell precipitously, nevertheless. So, as with anything having to do with banks these days, we offer a hearty, "good luck with that!"
How about thinking ahead a bit, like how much you'll be taking in every month when you're retired? The news there isn't very rosy either. Here's a report that offers the sobering conclusion that at the end of 2008 (hey, that was almost two years ago!), public pension funds were experiencing a shortfall of anywhere between $1 Trillion and $4.4 TRILLION! That's a lot of money that people are unlikely to be receiving in their "golden years."
But, that's just the start of it. Of the more than 1700 publicly-traded companies which operate pension plans for employees almost all of them are seriously underfunded. "The assets of corporate pensions relative to their deficits, known as the funded ratio, fell to 70.1% in August..." says a report by the Milliman 100 Pension Funding Index.
And that's without even looking at Social Security or Medicare, both systems hopelessly bankrupt and already bleeding red ink. When baby-boomers begin retiring in droves in the next two to five years, the systems will be beyond repair and likely need major modifications, such as no COLA, raised retirement ages and lower benefits. (Ed. Note: Being 56 myself, this doesn't make me necessarily happy, though my choice to not pay into any kind of pension plan and avoid SS tax at all costs now seems a prudent maneuver.)
OK, had enough? How about chewing on an arcane document of the American Monetary Institute from 2004, delivered by Director Stephen Zarlenga to the British House of Lords, which outlines, among other things, how government issuing money (not the Federal Reserve, a private bank), without the backing of gold or silver, has been the most fruitful.
This shoots major holes in the argument that "gold is money," and a true store of value and all the other clap-trap that have made gold the most speculative, over-priced commodity on the planet. As I and some non-gold-infused friends like to say, "you can't eat a gold bar and you can't buy a candy bar with it", or, "try buying a loaf of bread with a Kruggerand. Ypu've have better luck buying the whole bakery."
So much for the bad news. There was some good news, somewhere, but nobody seemed able to locate it. Nonetheless, the computers trading US stocks (You do know that 70% of all trades are executed without human involvement, don't you?) managed to issue forth another split decision, with the Dow and NASDAQ up, but the S&P and NYSE down, that, in itself, troubling. market divergence is almost always a telling sign that a correction isn't far off. Making matters more complex and compelling, trading volumes were down to absurdly low levels once again, running at a rate 30% below last year.
Dow 10,594.83, +22.10 (0.21%)
NASDAQ 2,303.25, +1.93 (0.08%)
S&P 500 1,124.66, -0.41 (0.04%)
NYSE Composite 7,169.48, -10.31 (0.14%)
In opposition to the benign headline numbers, declining issues pounded advancers, 3419-2260. The number of new highs to new lows remained static and statistically insignificant, at 308-48.
NASDAQ Volume 1,703,297,625
NYSE Volume 3,354,712,000
Crude oil futures were slammed down $1.45, to $74.57, but gold made another all-time high, at $1,271.90. up $5.20. Silver kept climbing in stride, up 20 cents, to $20.74.
Now, if there's anything we should have learned from first, the tech bubble of the late 90s and second, the housing bubble of the 2000s, that when the object of the bubble is advertised heavily on TV - remember Pets.com? How about 125% home equiy loans? - it's usually safe to say the asset is overpriced and due for a fall. It happened with tech stocks. It happened with houses, so it's probably going to happen with gold (and probably silver) because of the rampant number of ads telling us to buy gold, cash in our gold and get gold or cash in some manner. It's a mania, pure and simple. Gold and silver have increased in value by 400% or more over the past decade. When will it end? Nobody really knows, but buying at these nosebleed levels is the stuff of fools. Real estate looks much better, especially if you're assigned to the basic tenet of all investing, "buy low, sell high."
Tuesday, February 2, 2010
Earnings Check-up Spurs Stocks Higher
A big surprise from homebuilder D.R. Horton (DHI) pushed stocks higher on Tuesday, as optimism spread that the US economy was truly on the rebound. The company said it earned $192 million, or 56 cents per share, in its fiscal first quarter, after analysts' called for a loss of $62.6 million, or 13 cents per share. The gigantic improvement, however, was mostly due to a tax gain of $149 million, making the true earnings picture much cloudier. Shares of D.H. Horton rose nearly 11% on the day.
Additionally, Emerson Electric (EMR) beat estimates, posting a profit, though a smaller one than last year at the same time.
Dow Chemical (DOW) may have had the most sobering and honest report of the day, though. The company earned $87 million, or 8 cents per share, compared to a loss of $1.55 billion, or $1.68 a share, in the year-ago period. While becoming profitable again, Chairman and Chief Executive Andrew Liveris warned that growth in the US and Europe may lag and that the overall global economy remains uneven.
Investors took all of this in stride and bought stocks like they were going out of style, which, to some degree, they actually are. There's more and more investor skittishness stemming from the financial meltdown of '08 and the missteps and inconsistent signals from both the administration and congress aren't helping matters much. A ton of money is still parked in money market funds or headed into less-mainstream investments.
Stocks are below their recent highs, though not down far enough to encourage the kind of wide-eyed participation seen today.
With the January non-farms payroll data due out on Friday, and ADP's private employment survey hitting the wires prior to Wednesday's open, the two-day rally may be more of a bounce than a lasting event. Unemployment remains stubbornly high and any disappointment in the upcoming employment data may skewer those who rushed in yesterday and today.
Besides the worries over unemployment, price rises in stocks are pushing p/e ratios close to nosebleed territory even though many companies have not increased revenues to the point at which they are planning to hire.
Dow 10,296.85, +111.32 (1.09%)
NASDAQ 2,190.06, +18.86 (0.87%)
S&P 500 1,103.32, +14.14 (1.30%)
NYSE Composite 7,101.44, +93.21 (1.33%)
Advancing issues outpaced decliners by a healthy margin for the second straight day, 4470-2051. There were 157 new highs, to just 57 new lows. Volume was very good, though not out of the recent range.
NYSE Volume 5,502,060,000
NASDAQ Volume 2,508,011,500
Commodities advanced, with crude oil leading the charge, up $1.77, to $77.23. Gold rose $13.20, to 1,118.20. Silver gained 8 cents to $16.74.
The major indices fell through their 50-day moving averages last week, so a snap-back rally like this is not unconventional. Notably, the 50-day moving average for the Dow Jones Industrials has reversed course, pointing lower for the first time since July of last year. It's going to take more than a few company earnings reports to restore confidence and resume last year's miracle rally.
A more probable outcome is that stocks languish further after earnings dissipate from investors' minds and the focus shifts more toward economic reports, the government and outside events. Growth in the economy has returned, but the stock market gains were so overdone in '09 that there's little upside from here.
Adding to the confusion are housing and unemployment, which remain the bogey men in the closet. Nobody is going to sleep well until foreclosure data begins to subside and employment begins to perk up. For now, it's mostly empty rhetoric and cheerleading from major firms and the entrenched financial reporters who toil on Wall Street.
Real estate markets across the country are still reeling, government budgets are broken, especially in municipalities of more than 100,000, and jobs simply are not being created by the biggest companies. The stimulus package passed by congress last year only staved off a depression. Another round of stimuli - focused on Main Street and small business - is essential to sustain any momentum that's been garnered.
As for stocks, they're generally 20-30% below their 2007 highs, and while many investors are hoping for a return to those levels, that outcome is highly in doubt because stock prices were wildly over-inflated at that juncture. The collapse of the market was more a predestined event than a surprise, so bullish arguments for continuation of the rally - which seems to have fallen apart - ring hollow.
Additionally, Emerson Electric (EMR) beat estimates, posting a profit, though a smaller one than last year at the same time.
Dow Chemical (DOW) may have had the most sobering and honest report of the day, though. The company earned $87 million, or 8 cents per share, compared to a loss of $1.55 billion, or $1.68 a share, in the year-ago period. While becoming profitable again, Chairman and Chief Executive Andrew Liveris warned that growth in the US and Europe may lag and that the overall global economy remains uneven.
Investors took all of this in stride and bought stocks like they were going out of style, which, to some degree, they actually are. There's more and more investor skittishness stemming from the financial meltdown of '08 and the missteps and inconsistent signals from both the administration and congress aren't helping matters much. A ton of money is still parked in money market funds or headed into less-mainstream investments.
Stocks are below their recent highs, though not down far enough to encourage the kind of wide-eyed participation seen today.
With the January non-farms payroll data due out on Friday, and ADP's private employment survey hitting the wires prior to Wednesday's open, the two-day rally may be more of a bounce than a lasting event. Unemployment remains stubbornly high and any disappointment in the upcoming employment data may skewer those who rushed in yesterday and today.
Besides the worries over unemployment, price rises in stocks are pushing p/e ratios close to nosebleed territory even though many companies have not increased revenues to the point at which they are planning to hire.
Dow 10,296.85, +111.32 (1.09%)
NASDAQ 2,190.06, +18.86 (0.87%)
S&P 500 1,103.32, +14.14 (1.30%)
NYSE Composite 7,101.44, +93.21 (1.33%)
Advancing issues outpaced decliners by a healthy margin for the second straight day, 4470-2051. There were 157 new highs, to just 57 new lows. Volume was very good, though not out of the recent range.
NYSE Volume 5,502,060,000
NASDAQ Volume 2,508,011,500
Commodities advanced, with crude oil leading the charge, up $1.77, to $77.23. Gold rose $13.20, to 1,118.20. Silver gained 8 cents to $16.74.
The major indices fell through their 50-day moving averages last week, so a snap-back rally like this is not unconventional. Notably, the 50-day moving average for the Dow Jones Industrials has reversed course, pointing lower for the first time since July of last year. It's going to take more than a few company earnings reports to restore confidence and resume last year's miracle rally.
A more probable outcome is that stocks languish further after earnings dissipate from investors' minds and the focus shifts more toward economic reports, the government and outside events. Growth in the economy has returned, but the stock market gains were so overdone in '09 that there's little upside from here.
Adding to the confusion are housing and unemployment, which remain the bogey men in the closet. Nobody is going to sleep well until foreclosure data begins to subside and employment begins to perk up. For now, it's mostly empty rhetoric and cheerleading from major firms and the entrenched financial reporters who toil on Wall Street.
Real estate markets across the country are still reeling, government budgets are broken, especially in municipalities of more than 100,000, and jobs simply are not being created by the biggest companies. The stimulus package passed by congress last year only staved off a depression. Another round of stimuli - focused on Main Street and small business - is essential to sustain any momentum that's been garnered.
As for stocks, they're generally 20-30% below their 2007 highs, and while many investors are hoping for a return to those levels, that outcome is highly in doubt because stock prices were wildly over-inflated at that juncture. The collapse of the market was more a predestined event than a surprise, so bullish arguments for continuation of the rally - which seems to have fallen apart - ring hollow.
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