WEEKEND WRAP: Violent Protests... What Did You Expect? Civil Unrest Sweeps Across America

Twenty percent unemployment. 20%.

That's the number likely to be presented when the monthly data series, non-farm payroll is released Friday one hour before the opening bell.

More than 40 million Americans are out of work. Another 12-24 million are underemployed, meaning they are working at jobs in which they are overqualified or their work doesn't provide a full week's employment (under 35 hours). Add to that the millions on welfare or disability and what you have is roughly half the working age population - with the bulk of them under 40 years of age - with no work, either no income or income of a size insufficient to service their expenses, lots of time on their hands, and anger building.

While these unemployed Americans were forced to stay home over a period stretching anywhere from three weeks to two months (and counting) because of ordered lockdowns due to the coronavirus, they watched the US stock markets crash and recover, aided by trillions of dollars thrown to market makers, banks, brokerages, corporations, and financial intermediaries from the Federal Reserve. The unemployed were assisted in their plight by an additional $600 a week in benefits and a one-time $1200 special payment, which for many took weeks to arrive. All along, the people at home watched the stock market recover at a record pace, wondering how long it will take for their jobs, their lives to recover back to somewhere near prior levels.

On Memorial Day, when four policemen in Minneapolis murdered George Floyd in broad daylight right in front of protesting bystanders, the fuse was lit for an explosion of pent-up frustration and anger. By Tuesday, people in Minneapolis took to the street to vent and the result was widespread violence, looting, burning of buildings, and utter disregard for authority as the police actually retreated from the swelling, uncontrolled mobs.

Wednesday through Saturday saw the protests turn violent in other cities. Denver, Atlanta, Louisville, Kentucky, New York, Boston, Los Angeles, Washington, DC, Portland, Oregon were among dozens which witnessed growing mayhem. By Saturday night, protests were witnessed in more than 75 cities and curfews imposed - with varying degrees of effectiveness - in 30 cities.

At a very early point the protests became no longer about George Floyd and police mistreatment and more about the disproportionate distribution of wealth, substandard living conditions, and a host of related issues.

For the most part, Americans don't like being told what to do or when to do it. By nature, Americans are bred for independence and freedom. The lockdowns and shelter-in-place orders clamped down on freedoms and shredded free speech, the right to assemble, freedom of choice, and freedom of movement. Prior to the violence of the week just past there were already anti-lockdown protests all over the country.

Now that we are amidst the overwhelming civil unrest that many had predicted, it's important to step back and view the carnage with an eye toward analysis and understanding. Authorities, such as the Democrat governor of Minnesota, Tim Walls, have asserted that as many as 80% of the people demonstrating in the streets are not locals, but imports from other areas of the country, their intent to spread unrest and wreak havoc on cities.

While this may or may not be true - it actually sounds ludicrous considering the sheer numbers - it's unlikely that the same numbers would apply in other cities. After all, with protests in more than 30 cities, the outsiders would have to have come from somewhere. Besides it being logistically inefficient, there would have been massive traffic spikes on the interstates. It just doesn't add up.

No doubt there are outside agitators, but there would also be agents provocateur from the authoritarian side of the equation.

The killing of George Floyd set this episode of violence into motion, but there's evidence that the main protagonist, officer Derek Chauvin, who pressed his knee into Floyd's throat for more than eight minutes, should have been aware of the death of Eric Garner, who was killed under similar circumstances in New York city in 2014. At least one or more of the other three officers holding down the handcuffed Floyd had to be aware of the similarities. These police knew exactly what they were doing. To believe otherwise is naive. Floyd's death, in a city notorious for mistreatment of minorities by the police, was very likely a set-up, to engender a violent reaction, just as the lockdown orders were conditioning of the public by authorities.

By the way, Floyd's supposed "crime" was passing a counterfeit $20 bill at a convenience store. Is it simply a coincidence that the image on the $20 bill is that of Andrew Jackson, "Old Hickory," who shut down the Second National Bank of the United States on September 10, 1833, and survived an assassination attempt on January 30, 1835? Coincidence? Maybe. Irony? Absolutely.

Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out.

– Andrew Jackson (1767-1845)

When the violence began in Minneapolis, the police either backed off in fear of their lives or stood down purposely, allowing looting and burning of buildings, cars, and trash receptacles to take place without limit. Law and order proponents have made reference to left-wing groups such as ANTIFA for inciting the riots, but for whom does ANTIFA actually work? The case can be made that their agitation serves the interests of authorities in government. As the violence and mayhem spirals out of control, the mayors and governors build up their forces with more manpower and firepower, and now, military support, as nearly a dozen states have activated the National Guard.

California, Georgia, Minnesota, Missouri, Nevada, Ohio, Tennessee, Texas, Utah, and Washington state, in addition to the District of Columbia have called in Guardsmen to help quell the uprisings. Martial Law is the next logical step as the protests continue though there is likely to be a pause followed by random acts of civil disobedience on a massive, if unorganized scale. People have had more than enough of a financial systems that favors the rich over the poor and middle class, a two-tiered judicial system - one for the rich and connected, one for those who are not, extreme inflation in housing and educational costs, rising taxes without sufficient representation, injustices by the elite and the governing class going unpunished, and their emotions are boiling over into untenable conditions across the nation.

Those who make peaceful revolution impossible will make violent revolution inevitable.

-- President John F. Kennedy

Television media continues to push a narrative that the protests and violence are an outgrowth of racial tensions, rather than address the truth that the protests are more about generational and institutional inequality as evidenced by the massive numbers of black, white and Hispanics engaged, the vast majority of them under 30 years of age.

As cities burn, the obnoxious culture that is Wall Street is certain to respond, most likely in the wrong manner. All that matters in the realm of the economics of big business and central banking is higher share prices for the most-favored public corporations. While 40 million people were being laid off, fired, disengaged from jobs and income, the stock market indices gained back more than half of the losses initially incurred in late February and March. In the pretzel logic that is the inexorable ties between the Federal Reserve, the Treasury, and Wall Street, major cities erupting in riots and fires might be reason enough for fresh all-time highs in equities.

For the week, stocks continued their ten-week-long rally, tacking on 1.75 to over four percent on the major averages. The NASDAQ is within four percent of reaching all-time highs.

Over the shortened four-day week, treasuries were volatile with yields on the long end rising over the first three days but recoiling back on Friday as protests spread nationwide. The 30-year bond yield rose from 1.37% last Friday to 1.47% on Thursday, only to drop down to 1.41% Friday. The 10-year note closed out the week at with a two-week low yield of 0.65%.

Overall, the curve steepened to a spread of 125 basis points between the 2-year and 30-year with inversion between the six-month (0.18%) and 2-year (0.16%), indicative of recessionary conditions.

Oil prices seem to be consolidating. The July futures contract on WTI crude oil closed at $35.34 on Friday, in a range that appears to be suitable for all parties, considering the unlevel conditions on the ground.

The most volatility was evidenced in the precious metals space, especially silver, which advanced from a low of $16.80 per troy ounce to $18.05, closing out on Friday at $17.84. Gold finished up at $1728.70, off recent highs ($1748.30, May 20), though much improved from the week's low of $1694.60 per troy ounce.

On eBay, premiums remain elevated as shown by the most recent sales of one-ounce coins and bars:

Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 39.71 / 28.47 / 27.47
1 oz silver bar: 18.49 / 43.90 / 30.36 / 29.70
1 oz gold coin: 1,853.63 / 1,975.49 / 1,882.36 / 1,876.89
1 oz gold bar: 1,658.20 / 1,883.81 / 1,828.94 / 1,849.35

Looking ahead, it's incredible how quickly the media focus changed from the fading coronavirus to the escalating street unrest. These are macro-issues, covering large swaths of people who are neither coalescing nor collectively unifying. If leaders emerge from the city protests, which is natural in large public movements, then it can be safely assumed that these protests and the background issues are real. If no leaders emerge, it's all more fakery and planned demolition of society, just like the pandemic, aka plandemic.

In the 1960s protests, leaders and organized groups were plentiful. Jerry Ruben, Abbie Hoffman, Dr. Martin Luther King Jr., Jane Fonda, Tom Hayden, Malcolm X, Eldridge Cleaver, Huey Newton, Angela Davis, and others are among the more memorable individuals from the era. Students for a Democratic Society (SDS), the Weathermen, the Southern Christian Leadership Conference, Black Panthers and many more splinter groups comprised peaceful and violent elements.

Songs expressed the prevailing movements of anti-war (peace) and civil rights. Joan Baez, Bob Dylan, Phil Ochs, Arlo Guthrie, Judy Collins, Pete Seeger, Peter Paul and Mary, the Byrds, Country Joe and the Fish, and many of the groups that played at Woodstock in 1969 were among the more prominent voices among the peace and civil rights movements.

One would expect leaders and groups to emerge and musicians to show the way forward. While it might be considered cynical to believe that current events are orchestrated by a devious deep state or other bad actors, it is not outside the realm of possibility. As the world has learned so often in recent times, conspiracy theory often emerges as conspiracy fact.

At the Close, Friday, May 29, 2002:
Dow: 25,383.11, -17.53 (-0.07%)
NASDAQ: 9,489.87, +120.88 (+1.29%)
S&P 500: 3,044.31, +14.58 (+0.48%)
NYSE: 11,802.95, -1.97 (-0.02%)

For the Week:
Dow: +917.95 (+3.75%)
NASDAQ: +165.29 (+1.77%)
S&P 500: 88.06 (+3.01%)
NYSE: +470.98 (+4.16%)

WEEKEND WRAP: Stocks Flat After Week Of Turmoil; Media Concentration Killing Free Press

Due almost entirely to a stunning November non-farm payroll report, Friday's massive gains offset the losses incurred on the main US indices earlier in the week, leaving the Dow and NASDAQ with minimal losses and the S&P and NYSE Composite with smallish gains for the week.

With the prior month's job gains calculated to be 266,000, there was a great deal of encouragement for the US economy, despite almost no progress in US-China trade talks.

Though the week was a tumultuous one, ending with a bang, the overall arc was about as noticeable as the earth's curvature from a three-story building.

While stocks were going nowhere, crude caught a bid, as Saudi Arabia and OPEC nations vowed to cut another 500,000 barrels a day production in the first quarter of 2020. The move was seen as bullish for crude, though the cohesion of OPEC members remains questionable. The Saudi's are convinced that some members are failing to meet promised production cuts, putting lid on global oil prices. WTI crude oil closed out the week at $59.07. Gas prices shot up across the United States and Europe.

As is usually the case, gold and silver were beaten down during Friday's stock ramping. Gold ended at $1,458.40 per ounce, while silver bit the dust at $16.49.

Bonds were also whipsawed, with the 10-year note lost 11 basis points on Monday, with yield dropping from 1.83% to 1.72%, only to see it all eviscerated by Friday, finishing the week at 1.84%.

All markets appeared to be on unstable ground as the holiday season progressed and such condition may persist for the foreseeable future. The impeachment of President Trump continues apace in the House of Representatives, the trade war is likely to get hotter, holiday shopping usually lulls during the second and third week of December, and protests in Hong Kong and France (and in many other countries, over various issues) are taking a toll.

Oddly enough, America's mainstream media wishes to have nothing to do with protests in other countries, perhaps hoping that by not airing real news, Americans will not get any ideas about speaking up on issues that affect them. None of the major TV networks allowed any air time to the French protests over pensions, nor did the Washington Post. It's as though 800,000 people protesting in Paris, while the massive public transportation system was halted due to striking workers, actually did not happen. Americans are being kept in the dark about international developments unless it somehow fits their narrow narrative of "impeach Trump" and "trade war bad."

It wasn't long ago - maybe 30 years or so - that the United States had a free, fair, and balanced press. Since media cross ownership rules were relaxed, first in 1975, again in 1996, and again in 2003, media ownership concentration has gotten to the point at which we are today, where six or seven companies control roughly 95% of all mainstream media. It's no wonder that Americans are perplexed about world affairs, economics, and politics. The powers in the media have conspired together to keep the general public blissfully ignorant.

The internet has changed where Americans look for news to some degree, but, the large media companies own or control much of that as well, making it difficult for the average person to discern what is real, what is opinion, and what is fake. Until the FCC rolls back the liberalization of ownership concentration rules, Americans are almost certain to be shielded from news and stories that those overseeing network conglomerates believe to be too dangerous, too damaging, or simply to controversial to air.

The status quo, deep-state owned media in America is second only to congress as its own worst enemy and it may become even worse during the coming election year.

At the Close, Friday, December 6, 2019:
Dow Jones Industrial Average: 28,015.06, +337.27 (+1.22%)
NASDAQ: 8,656.53, +85.83 (+1.00%)
S&P 500: 3,145.91, +28.48 (+0.91%)
NYSE Composite: 13,588.29, +105.99 (+0.79%)

For the Week:
Dow: -36.35 (-0.13%)
NASDAQ: -8.94 (-0.10%)
S&P 500: +4.93 (+0.16%)
NYSE Composite: +43.08 (+0.32%)

Going Nowhere Fast: Stock Churning a Wall Street Tool; Buy the Dip, Sell the Rip

Denial is NOT a river in Egypt, but, those who wish to traverse their world wearing blinders, colored glasses or even virtual reality goggles have been observed in the general vicinity of Wall and Broad Streets in lower Manhattan and their numbers are growing.

Stocks staged a strong dead cat bounce rally after three straight days of losses, the largest being Tuesday's nearly 400-point loss on the Dow Industrials that had the world shaking on stories of disunity and anti-EU behavior coming out of Italy.

Of course, in the United States, Italy, despite being the world's ninth largest economy (hard to imagine that) is taken as something of an outlier, as in "not our problem," so stocks were sent skyward by idle speculators, offsetting the mechanical smart money distribution that has been a feature of the markets since late January.

Just in case the recovery narrative is not taken seriously, the stock jockeys still have plenty of equities to alternatively pump, dump or hold, depending on the circumstance of the day. The bulls are attempting to extend the long bull market to ten years when in fact it ended - almost to the day - at nine years and one month, on April 9, 2018.

Since then, the Dow (and largely the other major averages) have travelled in a pretty tight range. On April 9, the Dow closed at 23,979.10, going as low since then to 23,924.98 (May 2) and as high as 25,013.29 (May 21). That 1088 point range (roughly 4%) has persisted for some seven weeks and shows no sign of breaking out anytime soon.

With May looking like a good bet to produce positive returns in the range of 300-650 points (Thursday is the final trading day of the month), the players in this Broadway-stlyed farce should be patting each others backs vigorously for a job well done, the losses of February and March now overshadowed by the plus signs for April and May.

All the bad stuff - like Wednesday's lowered first quarter GDP estimate to 2.2% from 2.3% or the weak ADP payroll report (178,000 May jobs) is, according to the churning crowd, behind us and it's roses and unicorns from here to eternity.

Naturally, anyone with a handful of functioning brain cells knows that the government and media are conspiring to deliver all manner of propaganda - from Russian collusion and election interference to "tight" employment conditions when 93 million Americans do not work for a living - so any mention of good times should probably not be taken too seriously.

The truth is somewhere in between what the government and media spoon-feed and wha tone sees and hears with one's own eyes and ears. The economy isn't great, nor is it about to collapse, though, admittedly, it's been 10 years since the last recession, so "bad times" are pretty much overdue. Unless one is conditioned to a Pavlovian reaction to headlines, such as the algorithms that drive market activity are, seeing the markets bouncing in a tight range should be cause for at least some caution, especially since that range is well below the last market high (26,616.71, Jan. 26).

The last trading day of the month shouldn't be anything notable as far as volatility is concerned, unless May's non-farm payroll numbers (due out Friday, June 1) are not pleasant and leaked. Even then, the rangebound Dow will remain.

And the deniers of a bear market will still be in denial.

Dow Jones Industrial Average May Scorecard:

Date	Close	Gain/Loss	Cum. G/L
5/1/18	24,099.05	-64.10	-64.10
5/2/18	23,924.98	-174.07	-238.17
5/3/18	23,930.15	+5.17	-233.00
5/4/18	24,262.51	+332.36	+99.36
5/7/18	24,357.32	+94.81	+194.17
5/8/18	24,360.21	+2.89	+197.06
5/9/18	24,542.54	+182.33	+379.39
5/10/18	24,739.53	+196.99	+576.38
5/11/18	24,831.17	+91.64	+668.02
5/14/18	24,899.41	+68.24	+736.26
5/15/18	24,706.41	-193.00	+543.26
5/16/18	24,768.93	+62.52	+605.78
5/17/18	24,713.98	-54.95	+550.73
5/18/18	24,715.09	+1.11	+551.84
5/21/18	25,013.29	+298.20	+850.04
5/22/18	24,834.41	-178.88	+671.16
5/23/18	24,886.81	+52.40	+723.56
5/24/18	24,811.76	-75.05	+648.51
5/25/18	24,753.09	-58.67	+589.84
5/29/18	24,361.45	-391.64	+198.20
5/30/18	24,667.78	+306.33	+504.53

At the Close, Wednesday, May 30, 2018:
Dow Jones Industrial Average: 24,667.78, +306.33 (+1.26%)
NASDAQ: 7,462.45, +65.86 (+0.89%)
S&P 500: 2,724.01, +34.15 (+1.27%)
NYSE Composite: 12,625.87, +183.18 (+1.47%)

Fearless Rick Predicts: Trump To Win In Landslide Victory

Dispensing with the usual market noise and fury, today let’s look at the political spectrum, in particular, the presidential race.

In the aftermath of the leaked Trump video, the further Wikileaks of Hillary Clinton’s speeches to the Wall Street elite, and Sunday night’s debate, a common theme has emerged. The Democrats have, as usual, nothing more than empty rhetoric and the politics of personal destruction.

Republican candidate Trump has been dealt a bag of lies, dirty tricks, one-sided media reportage and bias, inaccurate, dubious polling data, slurs, baits, and typical trash talk, but he has not folded, not has he bent to the pressure in the least.

While Donald Trump may not be the ideal Republican candidate, he is largely better than his Democrat rival, Hillary Clinton, whose over 30 years of public service have yielded no tangible, positive results for the majority of Americans.

Trump is correct in pointing out that the Democrats - for whom the African-American populace slavishly vote for in every election, be it local, state or national in scale - have done nothing to enhance the ling conditions of the black community. The same goes for nearly every other minority. The Democrats are full of promises and negligent on deliverance. It is the same tactic trotted out year after year, in election after election. Democrats preach equality and tolerance, but demonstrate neither.

It’s time for Americans to see through the Democrat party as nothing more than socialism on steroids. Every problem is solved by more policies, more spending, higher taxes, greater regulation. The majority of taxpaying people in this country (and even tax-avoiders) are - or should be - fed up with the dictates and policies promulgated by the left and they should be energized enough to put an end to it next month, when millions will make their voices heard through their votes.

There are no sure things in life, but if ever there was a moment for a complete convulsion in the fabric of American life, it is now. Eight years of Obama’s socialism has led to this moment. Mr. Trump has prevailed over all his Republican rivals, many of whom - as much a part of the elite status quo as the Democrats - have withdrawn their support or never supported the nominee at all.

Hillary Clinton is another empty suit. Donald Trump is a businessman who has had great success and celebrity over the years. The Democrats have tried in vain to denigrate and demonize him precisely because they are afraid of losing the election and increasingly desperate.

If the truth be known, most of the polls are so wickedly biased toward the Democrats (see this story by Sharyl Attkisson for more) they cannot be believed. This race is not even close. More and more people are being swayed by the power of Trump’s persuasion for a greater America, for a return to traditional values, for supporting the constitution, lowering taxes, eliminating regulations and improving the quality of life for the middle class.

There should be no doubt when the buttons are pushed or levers pulled. Donald Trump will win the presidential election in an absolute, stunning landslide on a scale of Ronald Reagan’s victory in 1980.

The only caveat - and it is a serious one - is if the election is rigged and stolen outright by the Democrats or the powers that be. Both sides have done it and there is a very good chance that if Clinton is seen as losing midday on November 8, all bets are off, all votes will be nullified electronically or by other means. It’s a real threat, but, otherwise, Donald Trump will win convincingly.

Monday's Markets:
Dow Jones Industrial Average
18,329.04, +88.55 (0.49%)

NASDAQ
5,328.67, +36.27 (0.69%)

S&P 500
2,163.66, +9.92 (0.46%)

NYSE Composite
10,682.71, +55.79 (0.53%)

Sunday Morning News Shows Have Become Un-Watchable, Unbearable

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Maybe it's just me.

Maybe I've gotten too old (61), too cranky, or too intolerant to listen to government and media morons every Sunday morning, or, to put it into closer perspective, ANY SUNDAY MORNING.

Today, since I can no longer stomach NBC's Meet the Press, I tuned into FoxNews Sunday, which airs at the same time in my market (thank goodness). After just four minutes of hearing why President Obama needs to call ISIS (ISIL) "Islamic Extremists," I was done. Is that kind of devolved worthless introspective what the news media (propagandists) deems important?

Or, maybe I should just sit through it, listen to the usually empty talking heads and the next potential Republican candidate for the 2016 presidential election and make my life choices based upon the trite script the networks wish to foist upon the American public.

That just doesn't seem to be a wise choice. Besides, we have the Brian Williams incident leading the indictment against mainstream news. Televised media, which took over when people stopped reading newspapers, is a hollow hell-hole of disingenuous political nonsense. Just watch any of these Sunday shows, or, a week's worth of evening news on ABCBSNBC, and count how many stories are devoted to government matters. It's nearly all of it.

Is that all that matters in America, anymore? What the government is doing?

Sorry, I'm tuning out.

There's better news coverage from alternative sources on the internet, and, I don't mean 140 characters on Twitter.

Rant over, and I still have 40 minutes of my life left that I used to spend "keeping up."

Glory!

Wilting Green Shoots: Housing Starts at Record Low

You are being led like sheep to the slaughter.

Every day, financial information is released, most of it bad, and every day, without fail, the financial press warps the news with unfounded optimism and wraps it in a garland of rosy future predictions.

Take, for instance, how briefing.com couches the low record-setting level of housing starts and construction permits in positive spin:

News that housing starts and building permits recently fell below expectations jostled participants in the early going and undermined what was a positive bias ahead of the opening bell. Housing starts during April came in at an annualized rate of 458,000, while building permits for April hit a rate of 494,000. Both marked record lows.

However, there is a silver lining to the report. Fewer housing starts and building permits means there will be fewer homes on the market, which should help clear the glut of existing homes and improve pricing.

Even Bloomberg plays the bad-news-is-good-news game. First, the Bloomberg story says, "Housing starts unexpectedly slid 13 percent..." and later offers the wisdom of Wachovia economist Adam York, who opines, “This continues to support the story that new construction probably bottoms by early summer...”

Let's take a look at these stories. First, in the briefing.com spin, they point out that the bad news on housing upset the market's positive bias and "jostled" participants. Their "silver lining" reference is pure hokum: It's akin to saying that not selling out a performance of a play was good because it meant more leg and arm room for those few in attendance.

As for Bloomberg, they begin with the "unexpected" line. This is a ploy used constantly by the media. Apparently, nobody in the world expects anything bad to occur. It's not true. A daily read of my blog and a perusal of writings of people like Nouriel Robini, Jim Willie CB, Rob Kirby, Pam Martens, James Quinn, J. R. Nyquist, Paul Nolte. Mike Whitney and many others who aren't pushing an agenda reveals that there is no consensus on recovery and no gilt-lined packaging on economic data. Those who see and believe the trends and figures for what they are - signs of further deterioration - base their opinions in reality, not the fantasy that has become so popular on Wall Street, CNBC and the mainstream media.

The truth - if you can handle it - is that the economy is busted, broken, defunct, defaulted and despoiled. Sure, there will be a bottom, but probably not until mid-2010 at the earliest, and, even then, any recovery is likely to be weak. As I've been saying for some time, the Us economy is in a long-term downtrend that will last anywhere from 6 to 12 years. Standards of living will continue to decline, or, at best, not improve. This is not to say that everyone will be devastated, though many will. Americans have to make adjustments in their expectations for everything, especially their finances. Sadly, the mainstream media, Wall St., and the federal government isn't preparing the populace for the inevitability of a long, sustained depression.

Dow 8,474.85, -29.23 (0.34%)
Nasdaq 1,734.54, +2.18 (0.13%)
S&P 500 908.13, -1.58 (0.17%)
NYSE Composite 5,872.22, +6.35 (0.11%)

Advancing issues outdid decliners, 3682-2760. New highs finally caught new lows, at 61 apiece, for only the sixth time in the past daily readings in 19 months. Volume was moderate. The rollover of new high-new lows is expected to be short-lived. The markets can only remain at these elevated levels for a short period before insider selling takes stocks back down to near March lows, and then, lower. While I don't possess a crystal ball, I do know that the new highs-lows has been a consistently reliable indicator and any push to the other side - with more new highs than new lows - for a prolonged period, would signal the beginning of a new bull market. Obviously, this is not the case, so the conclusion to be drawn is that this is a signal of the end of the 2 1/2-month rally, shortly.

NYSE Volume 6,693,324,500
Nasdaq Volume 2,128,807,750

Oil gained again, up 62 cents, to $59.65. Gold rebounded $5.00 higher, to $926.70, while silver added 30 cents, to $14.13.

You best investment choices continue to be undervalued real estate, especially foreclosures and raw, arable land, gold and, of course, silver, which is likely to at least double over the coming two years and appreciate further after that.

Economic Realities Ignored by Propagandist Media

The media is doing a very nice job of covering up the real issues involving the US economy, the banks, TARP and Treasury's role in the massive fraud being foisted on the nation's public.

Yesterday, Tim Geithner's comments that the "vast majority" of US banks had sufficient capital were largely credited for pumping an afternoon market rally led by the financial sector. That tidbit was so widely reported that it brought back memories of Republican "talking points" to media outlets, all of which parroted the party line during the Bush years.

It now seems apparent that the press corps is still being led by nose rings pulled by the PR machine of the federal government. Much of the news that the government doesn't want the public to know about is widely dispensed by newspapers - which nobody reads anymore - and online, increasingly becoming the true fourth estate. Case in point is that at the very same time Treasury Secretary Tim Geithner was testifying that government programs were working, TARP Inspector General Neil Barofsky issued a scorching 250-page report detailing "staggering" fraud and waste inherent in the program, citing the more than 20 separate criminal investigations involving TARP, while criticizing the program's size as unwieldy and prone to abuse.

The controlled propaganda from D.C., the major TV networks and cable outlets is probably not going to be able to stem the tide of negatives which eventually will flood the secondary news media, on the internet, radio, financial newsletters and magazines. There is simply too much bad news for the mainstream media to blunt all of it. Just this morning, prior to the markets' opening, more bad news from the banking complex overwhelmed the investing community as Morgan Stanley (MS) reported a 1st quarter loss far in excess of analyst expectations. The company posted a loss of 57 cents a share ($177 million), swinging completely around from the profit of $1.41 billion, or $1.26 a share, generated in the first three months of 2008.

Analysts were looking for a loss of 8 cents a share in the quarter. This was a massive miss that everyone should notice, not just the investment community.

As it was, the Dow opened with a loss of just 75 points, with other indices responding in similar ho-hum fashion, no doubt due to excess upside pressure being exerted by the brokerages which control most of the trading. By 10:00 am, the Dow, S&P and NASDAQ had already turned positive and headed higher, begging the question of just how much bad news will it take to make the markets respond in anything close to realism?

While control issues of the media and the markets become more apparent, maybe the Machiavellian nature of this episode in American history will become more apparent with today's apparent suicide of acting chief financial officer of troubled mortgage giant Freddie Mac.

According to reports, 41-year-old David Kellerman was a lifer at Freddie, having worked his way up from his analyst position in 1992 all the way to the executive suite. His death brings into play many questions, because he - of all people - was a man who may have known too much. Did Kellerman kill himself because he was being set up for a fall, or was the suicide another "black op" designed to silence him from going public on matters that might expose key politicians or people on their staffs?

Either case is damning to the government, as they attempt to plug every leak in their quickly-sinking ship of state. Fannie Mae and Freddie Mac are linchpins in the entire financial meltdown that have yet to be adequately exposed. They are both severely undercapitalized and without enormous injections of government money, would be insolvent. Even with the massive funding from the government, they are already deeply underwater.

Also being represented on the national airwaves, Chrysler and GM's dire straits. Both companies continue to inch closer to bankruptcy. In Chrysler's case, such a scenario would mean liquidation. GM might be able to restructure in an orderly proceeding, though tens of thousands of jobs would be lost. Chrysler faces a May 1 deadline to reach a merger agreement with Italian automaker Fiat, itself under severe strain from declining auto sales.

Separately, General Motors announced late Wednesday that they may close some plants for up to 9 weeks this summer to save money. The automaker, once the pride of US industrial might, faces a government-imposed June 1 deadline to craft a workable plan to receive more federal aid. The alternative is bankruptcy, though even those closest to negotiations are unclear as to how such a plan would be structured.

Meanwhile, on Wall Street Wednesday, stocks were up early and down late, as the drumbeat of bad economic news is offset by a smattering of reasonable earnings reports from major firms.

Dow 7,886.57, -82.99 (1.04%)
NASDAQ 1,646.12, +2.27 (0.14%)
S&P 500 843.55, -6.53 (0.77%)
NYSE Composite 5,290.61, -48.98 (0.92%)

Despite the negative slant to the markets on the day, advancers actually outperformed declining issues, 3440-3006. There were 83 reported new lows to 34 new highs. Volume was again on the high side.

NYSE Volume 1,770,590,000
NASDAQ Volume 2,662,538,000

Commodities continued to limp along, dealing with slack demand in many industries. Crude oil for June delivery (new contract) gained just 30 cents, closing at $48.85. Foodstuffs were marginally lower. Precious metals continued to show some strength, with gold higher by $9.80, to $892.50. Silver finished the day in New York up 25 cents, at $12.31.

First time unemployment claims will greet market players on Thursday morning before the open. Experts are hoping for a continuation of last week's slight surprise of lower claims, though overall, unemployment remains abnormally high an a chief concern for millions of Americans and their families. More corporate reports will flow to market, though expectations are now so low that a good number may beat the Street but still be seen as vulnerable investments.

Sooner or later, the bad news catches up to everyone. While the government and media outlets try to paint a brighter picture than that which exists, issues such as trust and confidence are being severely tested.