FOMC Leaves Rates Unchanged, Turns More Dovish; Wedbush: Stocks Crash If Trump Wins

Stock junkies got their fix on Wall Street today, as the FOMC not only kept the federal funds rate unchanged at 1/4 to 1/2%, but reversed course on their planned four rate hikes in 2016, reducing the outlook to two, which, in the nuanced parlance that can only come from crony central bankers, means one more rate hike in 2016, likely not until September, at the earliest.

Talking heads from the various analyst camps spoke of a potential June hike, though, judging from the Fed's past actions, later, rather than sooner, would be the more likely timing. With US general elections coming in November, the Fed - no longer an altruistic entity, but a purely political one - a September rate cut would produce maximum chaos, which is surely the ongoing plan.

Not to put too cynical a spin on it, but the Federal Reserve has become completely politicized under Janet Yellen, with plenty of assistance and guidance by the mother hens which dominate policy from the White House. Employing high-sounding verbiage and the trappings and aura of majesty, the Fed has managed to hypnotize global markets and US citizens with their incredible blend of experimental policy and garbled, mangled language.

What the Fed has accomplished is nothing more than a furtherance of the ongoing wealth transfer from the distressed middle and lower classes to the uber-wealthy, while shutting out innovation, creativity and entrepreneurial spirit.

In essence, they are the ultimate destroyer of the American economy via globalist intentions and actions.

With their latest salvo of lick-spittle jawboning, they perpetuate the counterfeit of the US dollar and the fraud on savers which began in earnest with the financial collapse in 2008-09.

Stock promoters couldn't be happier, sending the major indices to their highest points since early January. With no impediments standing between them and median price-earnings ratios approaching pre-1929 levels, stocks are poised to completely erase the losses incurred through the first six weeks of the year.

With today's close, the Dow and S&P are within one strong day of getting even for the annum; the NASDAQ has a little more work to do.

December 31, 2015 closing prices:
Dow: 17,425.03
S&P: 2,043.94
NASDAQ: 5,007.41

Today's Fed-jacking:
S&P 500: 2,027.22, +11.29 (0.56%)
Dow: 17,325.76, +74.23 (0.43%)
NASDAQ: 4,763.97, +35.30 (0.75%)

Crude Oil 38.49 +5.92% Gold 1,264.00 +2.68% EUR/USD 1.1227 +1.08% 10-Yr Bond 1.9380 -1.07% Corn 368.25 -0.07% Copper 2.25 +0.94% Silver 15.64 +2.48% Natural Gas 1.87 +0.97% Russell 2000 1,074.51 +0.74% VIX 14.99 -10.99% BATS 1000 20,682.61 0.00% GBP/USD 1.4269 +0.79% USD/JPY 112.5475 -0.53%

In what has to be the #1 hit piece on Donald Trump from the Wall Street crony capitalists - via Yahoo! and CNBC, Wedbush's director of equity sales, Ian Winer (shouldn't that be I'm a Whiner?) says stocks will crash 50% if Trump is elected president.

Here's a link to the article and video (and some easy comments), and if you just want the video, go here!

CNBC, the #1 financial bull--it network, doesn't want to mention that stocks should fall 50% anyhow, and the entire economy will be gutted if Hillary Clinton or Bernie Sanders wins the election.

https://screen.yahoo.com/trump-catastrophic-stocks-wedbush-214000793.html

One of the better comments, by commentator takebreathandthink:

It's true, the markets will crash 50%. Also, the seas will turn to blood, meteors will rain down from the heavens, swarms of locusts will kill all of the crops in the world, every volcano will erupt, earthquakes will rip apart the continents, and the first born of everyone in the world will die (thank God I'm the youngest in my family).

Inquiring minds want to know why Mr. Winer didn't call for a 60% or 80% crash. After all, if you're going to trash someone, why go just halfway?

Vote Trump. Wall Street hates him.

Stars Align for Markets Amid Super Tuesday March Madness

While the Dems and Reps fight in various primaries for the right to represent as a party leader of the USA, US equity markets calmly said adieu at the opening bell and never gave a backward glance.

Tuesday's advance was one of the top three of the year, pushing off from the 50-day moving average on the Dow, which may well have been the anointed starting point for this leg of the extended rally. The close today was at the best level in nearly two months, something of a needed salve for banged-up bulls.

While there was little in the way of encouraging news for stocks to sound off so vociferously, there was certainly no absence of chart-wise subjectivism from which to spark.

As for a relationship to Donald Trump's or Hillary Clinton's seemingly unstoppable rise to become the nominee of their respective parties, there is probably none, though wiser people have made dumber bets that Hillary will be the eventual next president and further take out the case that she will be good for the economy. That happens to be the confirmed thinking of the status quo, which sees more Clinton-esque policies as somehow good for Wall Street (note: big hitters on the street have given heartily to her campaign and to the Clinton Foundation, whereas Mr. Trump has been largely self-funded).

Even bonds were in alignment with the general mood, the 10-year note closing at a multi-week high of 1.83%.

S&P 500: 1,978.35, +46.12 (2.39%)
Dow: 16,865.08, +348.58 (2.11%)
NASDAQ: 4,689.60, +131.65 (2.89%)

Crude Oil 34.39 +1.90% Gold 1,236.60 +0.18% EUR/USD 1.0871 -0.12% 10-Yr Bond 1.83 +5.40% Corn 356.00 -0.28% Copper 2.15 +0.63% Silver 14.92 +0.01% Natural Gas 1.74 +1.46% Russell 2000 1,054.49 +1.99% VIX 17.70 -13.87% BATS 1000 20,677.17 0.00% GBP/USD 1.3950 +0.17% USD/JPY 113.9270 +1.32%

Donald Trump Shock Wave Shakes Nation

Winning every available delegate in a truly historic presidential primary victory in South Carolina on Saturday, business billionaire Donald J. Trump now sets his sights on the state of Nevada and its upcoming caucus on Tuesday.

After what appears to be a sure win for Mr. Trump, the big test comes the following Tuesday, when 13 states will hold Republican primary votes, led by the inartfully-named "SEC" states of Alabama, Georgia, Virginia, Arkansas, Texas and Tennessee. Equally important are tests in Massachusetts, Minnesota, Oklahoma, Colorado and Alaska. 595 delegates are up for grabs on March 1. Texas alone accounts for 155, and is one of the few states in which Donald Trump does not lead. There, Ted Cruz, who is a senator from the state, holds a slim advantage, though the latest poll was taken prior to Trump's victory in the Palmetto State.

No candidate that has won both New Hampshire and South Carolina has failed to capture the Republican nomination, a fact that completely eluded the commentators on the Sunday talk show circuit, most of whom spent their air time desperately searching for an antidote to Trump fever, which is sweeping a nation angry with politicians, politics, a do-nothing congress and an administration that has sold its constituency down the proverbial river.

Trump offers a refreshing change of pace from the status quo. From his apparent off-the-cuff remarks to his infectious enthusiasm, Trump embodies a new paradigm for the American electorate and its making the establishment parties and the supine news media quake in its collective booties.

The message is clear and unqualified. Trump promises to build a wall on the Mexican border to halt the flow of illegal immigrants, and, to make sure nobody misses the message, Trump always reminds supporters and detractors alike that he'll make Mexico pay for it. Other policy initiatives include bringing back American jobs from places like Mexico, China and Vietnam, taking better care of veterans, destroying ISIS, cutting taxes for the middle class and business, repatriating profits earned in foreign countries by American enterprises, and protecting the rights of American citizens outlined by the Bill of Rights, especially the second amendment, the right to bear arms.

Not surprisingly, Trump's forthrightness and honesty go a long way in an age dominated by skepticism, innuendo and false prophets. His campaign message to "Make America Great Again" resounds in a country fed up with liberal concepts like multiculturalism, atheism and statist elitism. Trump, while himself a very rich man, is self-made and down-to-earth in ways that Americans have demonstrably appreciated. His approach is common-sensical and sometimes bordering on comical, calling politicians incompetent, self-important and dishonest, most of which applies in spades to the current crop of paid-off crony representatives of lobbyists, big business and special interests.

And then today, there was this:

It is so important to audit The Federal Reserve, and yet Ted Cruz missed the vote on the bill that would allow this to be done.

— Donald J. Trump (@realDonaldTrump) February 22, 2016

If Trump is willing to abolish Obamacare, Common Core and reopen the wounds of 9/11 and the Iraq War, why not tackle the biggest buffoons in the room, the rentiers of the Eccles Building, the clueless illuminati which has brought us bubbles and busts and threatens to do the same again?

The world is waiting.

Today's Rigged Results:
S&P 500: 1,945.50, +27.72 (1.45%)
Dow: 16,620.66, +228.67 (1.40%)
NASDAQ: 4,570.61, +66.18 (1.47%)

Crude Oil 33.60 +5.83% Gold 1,209.40 -1.74% EUR/USD 1.1026 -0.96% 10-Yr Bond 1.7660 +1.03% Corn 368.00 +0.68% Copper 2.11 +1.81% Silver 15.19 -1.22% Natural Gas 1.86 -0.16% Russell 2000 1,021.74 +1.16% VIX 19.38 -5.60% BATS 1000 20,682.61 0.00% GBP/USD 1.4148 -1.09% USD/JPY 112.9550

The Big Reset Has Begun; Prepare Accordingly; Stocks Skid to 2-Month Lows

Coincidence?

Try these events from the past three days:

Kerry meets with Putin, says Assad can stay as ruler of Syria. US policy neutered.

Biden calls off Turkey, tells them to stop violating Iraq's borders. US policy neutered.

Fed raised Fed funds rate, banks raise prime rate.

Putin publicly backs Trump.

Ukraine defaults on Russian debt. While this may appear bad for Russia, it's worse for Ukraine, and even worse for US policy.

Today, the plug will be pulled on over a trillion$ in SPY options. Winners and losers, lots of both.

The world has changed radically in the past week. Trump is now the de facto US President. Obama can go to Hawaii and stay there for all the world leaders care. Kerry had no power; now he has even less, if that's possible.

Just watch: terrorism will be a non-starter for 2016. US intel has been found out (by Putin) and he's putting an end to it all.

Will truth and justice return to America? Just like bankruptcy, gradually, then all of a sudden.

h/t to Ernest Hemingway

Then, there's this cryptic note - citing Jim Willie's Hat Trick Letter - found in the comments section on a Zero Hedge article.

GLOBAL RESET HAS BEEN TRIGGERED, THE PROCESS BEGUN, THE VOICE FINALLY WARNS... THE EVENTS HAVE BEGUN, AND THE USFED RATE HIKE MIGHT HAVE BEEN PART OF THE GLOBAL DECISION. $$$

The Voice gives an urgent warning that finally the breakdown is accelerating, the damage profound, the effects unmistakable, the plug pulled. The officials have not undertaken any remedy for several years. His message is clear and stark, the first time such a communication has been given to the Jackass and colleagues. It was given just a few days before the USFed rate hike decision was made. "Guys, the plug has been pulled. Let the show begin. Our organization has been alerted accordingly to that effect this morning at 4am, that the deed is done. The battle trigger code has been chosen. It will get incredibly ugly, as real casualties will result. The annihilation of entire groups of people within the corrupt and criminal systems will be unimaginable to normal humanoids. These systems will be totally dismembered and crushed, never to be resurrected. The cabal is being caught in a grand dragnet, with the outcome certain to be their extermination, along with all their agents and collaborators. [1] The effects of this event driven scenario will become visible to the ordinary people in early 2016 and forward. Once the dust settles, it is clear to me that the human population will be noticeably lower, with fewer people roaming this planet." The Voice is referring to the Satanist Bank Cabal groups. We mere mortals hope that reason prevails, that remedy is agreed upon, that transition is orderly, so that a billion people do not needlessly perish. But the Anglo-Americans have their favorite nuclear and virus toys. We have seen ample evidence of their chemical plant explosions as a warm-up to main events.

Our organization has been alerted accordingly...

At 11:00 am ET, the S&P already dumped 2030 and 2020. Getting closer to the magic mark of 2000.

Don't actually think it matters if it happens today, tomorrow, next week or next year. The crash has been underway since late May, the last time the NAZ, S&P and Dow all set new all time highs.

The trash is being taken to the dumpster. Watch terrorism disappear as a major story. The meme for 2016 will be economic security, and Trump will win easily.

In fact, since Putin's endorsement yesterday, some would wager that in the minds of most world leaders, Trump is already the US de facto president. Obummer is so over. Hillary is a non-starter. Change is good; best to be out in front of it. The elections will be all for show, since Trump is self-financed. The money machine(s) is/are grinding to a halt.

Americans are going to see the fruits of what the Fed and the federal government, state governments, and local governments have sewn: TRASH. Loads of TRASH, piled high, heaped upon more loads of TRASH.

Bankruptcies should absolutely soar in 2016. Corporate failures and bond defaults will accelerate. Pensions will default on payments. The US will slowly, painfully, resort to honest money. GOLD AND SILVER WILL SOAR.

A BIG THANK YOU TO JANET and THE FOMC. THANKS, YOU NITWITS.

David Stockman really nailed it in his post at Contra Corner Blog.

And, while the economy slowly crumbles, congress (which obviously didn't get the memo that they're fired) conveniently passed a $1.15 trillion omnibus budget bill with the notorious CISA government spying act included.

At the end of the week (the last full week of 2015), the figures for the major averages look pretty stupid.

The Dow was smacked down a whipping 367 points, closing at 17,128.59, the lowest closing price since mid-October. For the week, the DJI was off nearly one percent, down 136.62 points.

The S&P nearly got to the 2000 mark, closing down 36.43, at 2005.46 on the day, but lost just 6.95 for the week. On the NASDAQ, it was a 1.59% loss, down 79.47, at 4973.08. On a weekly basis, it doesn't look bad on the surface, as the NAZ lost a mere 10 points.

However, Monday, Tuesday and Wednesday were all up days for the major indices. Thursday and Friday were down, and down big, erasing all of the early-week gains. From the highs after the FOMC meeting, on Wednesday's close, the losses portend further losses next week. a cleansing of bad assets is well underway, and there are plenty of bad ones in all markets.

Also, the entire treasury curve flattened. The 10-year yield, in particular, dropped 10 basis points from 2:00 pm ET on Wednesday, the moment of the FMOC rate hike announcement, ending the week at 2.20%. If the Fed's master plan was working, shouldn't all bond yields - especially those of shorter durations - have gone up? This is a classic example of the market rejecting the Fed, with more to come, as the Fed thinks it's going to raise rates four more times in 2016, a recipe for economic cataclysm.

Lastly, keep a close eye on the banks (JPM, BAC, C, GS, WFC, MS) as they were all lower by 2-3% on the day.

David Bowie's Changes should suffice as an appropriate song for a truly epic week:

19 CENT CHEESEBURGERS, Ted Cruz and a Dow Mystery

We have a bad monetary system. A shaky one at the very least, but, probably just plain bad.

McDonald's menu, circa 1965

It would take a tome longer than Adam Smith's The Wealth of Nations to explain why. However, in today's world, we have technology, which is, by most accounts, an improvement to the general welfare and happiness of the people of the world, or so we think.

This technology allows us to share images such as the one shown in this simple blog posting.

The point, or points, as there are many diverse levels to this discussion, is that our monetary system is based upon, in no particular order, debt currency, inflation and death.

Ponder, if you will, the fact that the Dow Jones Industrial Average fell roughly 50 points in the final minutes of trading today, and the price of a cheeseburger, roughly 50 years ago, was 19 cents. The question is why did the Dow fall so precipitously at the close and what does that have to do with the price of cheeseburgers?

Yes, 19 cents. Your editor ate many of them, as there was a McDonald's and competing burger joints near his high school.

19 cents, people. Grow up.

Dow 18,116.04, -11.61 (-0.06%)
S&P 500 2,104.42, -3.68 (-0.17%)
NASDAQ 5,010.97, -15.44 (-0.31%)

Sub-note: Consider this: today Ted Cruz, a first term senator from Texas, announced his candidacy for president, officially kicking off the campaign season for the 2016 presidential election. This election is, as of today, 19 months away. In't it time we put limits on when politicians can campaign? Isn't 19 months prior to an election just a tad too early to start thinking about who will be the next president? Mind you, a presidential term lasts four years. Must we spend half of one president's term deciding who should be his or her replacement?

Today, sadly, we have more questions than answers. If we had the answers, assumably, we would probably not be spending time asking questions on a blog.

Washington Comes Alive Past Last Minute; Fiscal Cliff Averted... for Now; Wall Street Rejoices

Well, Money Daily was right. There was no fiscal cliff deal by midnight, December 31, 2012, but, those wily congress-critters once again outfoxed everyone by playing past the deadline and passing a bill that was, by and large, a deal, though it certainly didn't address any long-term issues, nor did it include any meaningful spending cuts.

Congress and the president - now back in Hawaii, playing golf, presumably - made sure that all the handouts would continue being handed out, extending unemployment benefits and keeping the Bush tax cuts in place for individuals earning less than $400,000 per year ($450,000 for couples), while raising the tax on those making more than that from 35% to 39.6%, which is a pretty big bite.

The "deal" also raised capital gains taxes from 15% to 20%, but only on those earning more than $400,000, a bit of relief for the 99% gang.

Scoring by the Congressional Budget Office and others put the cost of this deal at an increase of some $4 trillion to be added to the national debt over the next ten years. Nice job, boys.

Everybody's taxes will go up, however, because the deal did not extend the 2% tax holiday on Social Security payroll deductions, which was cut from 6.2% to 4.2% last year and will go back up to 6.2% this year. So, if you make $1000 a week, the feds will be taking an extra $20 out of every paycheck.

Foreclosures and short sales will continue to prosper in 2013, as the deal extended the 2007 Mortgage Forgiveness Debt Relief Act, which allows homeowners who experience a debt reduction through mortgage principal forgiveness or a short sale are exempt from being taxed on the forgiven amount.

Yippie! Our "Free houses for everyone!" motto lives on.

Wall Street was enthralled by the deal, sending stocks rocketing to their biggest gains of the year (Money Daily expects this will be the largest one-day gain for stocks in 2013, so bookmark this page now!).

The major indices made back all of the losses they took in the final ten trading days of 2012, and then some in just the first trading day of the new year.

At issue is how long the rally will last, whether this is just a one-day wonder or whether stocks can still remain the darlings of investors with 4th quarter earnings season on the horizon and the new congress (and same old president) having to deal with sequestration, deficit reduction and a debt limit increase within 60 days.

Since, according to Treasury Secretary Tim Geithner, we've already exceeded the debt limit, the feds will be borrowing from government pension funds to fund the government in the interim. A huge fight is ensured in February, as congress, if the latest fiasco offers any clue, won't want to deal with these issues until late in the game.

For now, though, roll with it. The Federal Reserve has the government's back, standing at the ready to print billions more in greenbacks at the hint of any troublesome developments.

Along with equities, expect everything else to keep getting pricier because there's really no easy way out of the monetary fix we're in. Next week, when life returns somewhat to normal, the angst will reemerge.

BTW: Money Daily was actually correct in predicting that everybody's taxes would go up under any kind of deal. They did. Check your paycheck in coming weeks for proof.

Dow 13,412.55, +308.41 (2.35%)
NASDAQ 3,112.26, +92.75 (3.07%)
S&P 500 1,462.42, +36.23 (2.54%)
NYSE Composite 8,631.18, +187.67 (2.22%)
NASDAQ Volume 2,071,100,625
NYSE Volume 4,634,567,000
Combined NYSE & NASDAQ Advance - Decline: 5798-863 (wOW!)
Combined NYSE & NASDAQ New highs - New lows: 679-21 (WOW! again)
WTI crude oil: 93.12, +1.30
Gold: 1,688.80, +13.00
Silver: 31.01, +0.78

The Instant Market: Draghi and Bank of America Take It Down Two Notches

Once again, we are treated to the new reality of the "instant market" wherein news, or rumor, directs the flow of funds into or out of select equities, and today's catalysts were, as usual, from Europe (must have some news from Europe to move markets: it's the law) and oddly enough, from our old friends at Bank of America (BAC).

First, Europe. US markets opened with some hope and small gains across the indices. That was, until shortly after 10:00 New York time, when ECB President Mario Draghi commented that the ECB would not step up it's bond purchases, noting that monetary financing of states was not part of the treaty upon which the EU was formed. (Imagine, a world political leader actually sticking to what was agreed upon. A novel approach.)

That took the markets down a big notch, with the Dow, after hitting its highs of the day earlier - up 60 points - falling a full 120 points - to down 60 - in about an hour's time after Draghi's comments.

Draghi also said that any talk of the Euro-zone breaking apart were "morbid" and that the Euro was going to remain intact as a viable currency. He punted this gem:

I have no doubts whatsoever about the strength of the euro, about its permanence, about its irreversibility. But you have a lot of people, especially outside the euro area, who spend a lot of time in what I call morbid speculation.

While Draghi may be right about the morbidity part, the thought that the Euro is irreplaceable or inviolate is nothing more than CYA job protection. He's paid to oversee the ECB, and talking up the currency is part of his job. Somebody ought to hand Draghi a history book. Greece fell, Rome fell, Germany rose and fell a couple of times, at least. Nothing lasts forever, and, with only 11 years of history under its belt, the Euro is experiencing something of a severe confidence crisis, if not a complete failure by some of its constituents.

Most of those "morbid" speculators give the Euro another six to eighteen months, tops. And while it may indeed survive, and prove Draghi correct in the near term, it's another bad idea stemming from too many government bureaucrats attempting to furnish a centrally-planned socialist solution where none was needed. In many ways, the Euro resembles the Medicare/Medicade mess in the US, wherein the government stepped all over the established free market to create a system that is out of control and benefits mostly large medical insurance companies instead of real people with health care needs. The Euro was supposed to affect the entire continent in magical, positive ways. It has, thus far, produced a great deal of pain, financial inequities and sparked a world-wide crisis, even though that crisis was well underway, being all about fiat money anyway.

Stocks drifted along until about 3:00 pm ET when the PPT or whomever was hitting the bid - for hours - on Bank of America at 5.00 - 5.03, stopped, failed and rolled over. The bank that many equate with the financial collapse of 2008, hit a fresh, 33-month low, hitting 4.92 prior to closing at 4.99, an important figure, since many funds, by charter, cannot trade in stocks priced under 5.00, or must severely limit the size of their investment in such low-priced equities.

With banks under pressure the entire session, the demise of BAC took the whole market down the second notch, into the close. So much for recovery, at least by the "well-capitalized" US banks, whose ledgers are an indecipherable miasma of imaginary valuations, off-balance-sheet assets and liabilities and mark-to-model fantasies. With books so complex and confusing most CPAs don't understand them and after relentless support from the federal government (much of it in secret), is there any doubt that most stock pickers have shied away from US financial stocks as a whole?

Bank of America, along with Citigroup and JP Morgan Chase, to name just a few, should have been broken up in 2008-09, when they were insolvent (and still are, largely), though that would have ended the near-total dominance of the Federal Reserve and its constituents over all transactions in the US economy and beyond, and the rich bankers and their supporters simply could not stand for that. Instead, it was easier for them to socialize the losses on the backs of the US taxpayers.

Bank of America's recent swoon is only a small chapter in the ongoing saga that will bring down the oligarchical nature of our corrupt political and financial system. 99%ers are celebrating.

A couple of items of note:

Ron Paul, the Republican presidential candidate that the establishment loves to hate, has taken the lead in Iowa accordind to the most recent polling by Public Policy Polling (PPP), one of a handful of organizations tracking the rise and fall of candidates in the upcoming (January 3) caucuses.

The results have Paul at 23%, leading Mitt Romney (20%) and a rapidly declining Newt Gingrich (14%), even though Romney recently picked up the endorsement of the the Des Moines Register, Iowa's leading newspaper. Paul is also reported to have taken in more than $4 million over the past weekend, and now is in second place, behind Romney, in New Hampshire.

Also, a searing report on where we're headed in 2012, called the Thunder Road Report, leading with the cryptic warning, "Dear Portfolio Manager, you are leaving the capitalist sector and heading into a full-spectrum crisis."

The entire report is available at the end of this post.

Anybody seen Santa?

Dow 11,766.26, -100.13 (0.84%)
NASDAQ 2,523.14, -32.19 (1.26%)
S&P 500 1,205.35, -14.31 (1.17%)
NYSE Composite 7,142.45, -95.21 (1.32%)
NASDAQ Volume 1,591,603,125
NYSE Volume 3,659,820,750
Combined NYSE & NASDAQ Advance - Decline: 1230-4469
Combined NYSE & NASDAQ New highs - New lows: 110-290 (blowing out)
WTI crude oil: 93.88, +0.35
Gold: 1,596.70, -1.20
Silver: 28.87, -0.80

TRoad25

Obama Speaks, JP Morgan Pops, Stops, Feds Love Banks

Sometimes you just have to sit back and take it all in, which is precisely what marketeers did today after JP Morgan put out a bogus earnings report prior to the open, and President Obama put down a line in the sand for Republicans over upcoming budgets.

Market futures pointed higher prior to the open after JP Morgan Chase (JPM) announced 1st quarter results, saying they beat wall Street expectations of $1.15 per share with a resounding $1.28 in the quarter. This sent the major indices off to the races at the open, but as soon as discoveries were made that Morgan's earnings figure was boosted by a 0.29 per share reduction in credit loan loss reserves, things began to turn ugly, and in a hurry.

After opening up 62 points to the good, the Dow Jones Industrials were seeing red by noon. Likewise, JP Morgan's 62 cent gain turned into a 76 cent loss (45.88) at the low of the day, just after 2:00 pm EDT. By the close, Morgan and the Dow had regained some ground, though JPM still finished down 39 cents and was quoted lower in the after-hours.

Around 2:00 pm, President Obama offered a retort to Republican Paul Ryan's proposed 2012 budget plan in a speech at George Washington University. The President outlined plans for cuts in defense spending and saving in Medicare and reiterated his 2008 campaign pledge to scale back the Bush tax cuts, saying he went along with Republican plans to extend them last year only so he could save middle class taxes from rising.

Obama's plan, in simple terms plans to cut the budget deficit by $4 trillion over the next 12 years, keeping intact the two largest entitlement programs, Medicare and Social Security, which was not mentioned for any revisions.

While the president was speaking, markets gyrated in both directions, finally heading into the positive, though only slightly, by the close. At the very least, the president did a good job of setting the parameters for a budget fight that figures to be a battle royale on Capitol Hill through the summer and into the fall.

Even though the markets broke a four-day losing streak, gains were minimal, the up early, lower later signature of trading was straight out of the bear market playbook.

Dow 12,270.99, +7.41 (0.06%)
NASDAQ 2,761.52, +16.73 (0.61%)
S&P 500 1,314.41, +0.25 (0.02%)
NYSE Composite 8,367.31, +6.85 (0.08%)

Advancers took back the edge over decliners, 3493-2976, but new highs and new lows were split, with a 46-46 tie on the NASDAQ and new highs bettering new lows, 50-15 on the NYSE. Volume was, as usual, uninspired.

NASDAQ Volume 1,766,435,000
NYSE Volume 4,275,430,000

Commodities snapped back to life with WTI crude futures gaining 86 cents, up to $107.11 on the NYMEX, snapping two-days of delightful declines. Gold picked up a gain of $2.00, to $1,455.60, while silver added 17 cents to $40.24.

The budget deal worked out last Friday now appears to be ready to pass both houses without much dissent, though some members of both parties have signaled that they would vote against the measure due to ideological values. A vote is scheduled for the House on Thursday.

In other news affecting JP Morgan and its cohorts (the 14 largest US banks), federal regulators slapped the collective wrists of the banks, but imposed no sanctions, fines or plausible remedies to foreclosure and mortgage servicing problems which surfaced last fall during the "robo-signing" scandal.

The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. issued the settlement after markets had closed.

"The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy," the OTS said in a statement.

That qualifies as the understatement of the decade. Not a single banker or functionary has been indicted, nor have any of the banks in question been subject to any serious scrutiny over their abuses that likely deprived many homeowners of due process.

This "agreement" leaves conditions almost as they were, with the banks still holding all the cards and homeowners getting no relief. It is expected that foreclosures will proceed through the courts as they have, with judges scrutinizing individual cases for flawed paperwork and other transgressions routine to the practice of the banking cartel.

Without a workable framework, the process will likely bog down the real estate market for the next five to ten years, as title defects, lost notes, fraudulent assignments and other illegal practices are given a green light by the nation's regulators. Obviously, some things in Washington remain just the same, as regulators look the other way when it comes to their favorites sons and campaign contributors.

PPT Rallies Markets, Raises False Hopes

I've mentioned the Plunge Protection Team (PPT) on this blog more than just a few times. While some people think that the President's Working Group on Financial Markets is some kind of chimera that I and other tin-hat conspiracy nuts have created out of whole cloth, there's more than enough evidence - including today's mythic 631-point rally - to prove that the PPT does indeed exist and now operates almost in plain sight.

Here are just three articles concerning the PPT from fairly credible sources:

THE TRAGEDY OF THE US STOCKMARKET Part 2 - PPT failing, panic in Washington...

Gold will rise, US Dollar would burn

Plunge Protection Team Now Official

There are many more which can be found using any search engine, but try this Google News search for links to current articles on the PPT.

After the absurd move today, rallying the Dow from a low of 11,644.81 to a high of 12,276.67, there should be no doubt that the US economy is in the midst of a serious crisis. The problem is that 95% of Americans don't know this because they will see the stock market rebounded today. Half will not know that the Dow was down more than 300 points. The other half will see that but simply not care.

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Economic reporters never mention the PPT, and always assign turnaround movements in the middle of market collapses as either bargain hunting, program trading or tied to the price of oil. So, the average Joe or Jane with money in their 401k thinks everything is OK. All the while the US dollar continues to sink into a black hole on the PPT's profligate spending in US equity markets.

All of this PPT-induced buying began at 12:45, when the markets bottomed out for the second straight day and it continued without interruption right through to the close.

Dow 12,270.17 +298.98; NASDAQ 2,316.41 +24.14; S&P 500 1,338.60 +28.10; NYSE Composite 8,805.68 +144.51

I have seen many a strange event on the markets, but today's takes the cake, the ice cream, plate, fork and napkin. Yesterday, I called the market rally the biggest fraud ever perpetrated in financial markets. I was wrong. Today's action takes that prize, hands down.

Let me be clear. Small investors in America are neither sophisticated or very smart. They get the majority of their information from television (CNBC) or paid shills, invest mostly in mutual funds which they barely comprehend and probably spend less than two hours per week analyzing market trends, individual stocks or financial events.

On the other hand, Americans still trust their federal government which is a major mistake. Here's a short list of non-credible functions, offices and people in the highest positions of power in the United States:

• The president and his administration and cabinet


• Congress: both houses are equally inept and unworthy of trust


• The Federal Reserve, the Chairman (Ben Bernanke) and the Board of Governors


• Treasury Secretary Henry Paulson


• Mainstream Media, especially ABC, NBC, CBS, FOX (lapdogs of the government)


• The SEC


• CEOs of any major corporation and all of the Dow companies

Thus, the not-so-clandestine operatives of the PPT get to manipulate markets without impunity, resulting in erratic and unexplainable movements like today. This inspires hope in the little people, even though that hope is based on nothing more than a government printing press spitting out $100 bills as fast as it can and operatives in the stock markets buying everything in sight with both hands.

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Market internals show just exactly how ridiculous today's 300-point gain on the Dow really is. Volume was the highest in a long time, surpassing yesterday's highest of 2008. That makes sense, since the PPT had to buy a lot of stocks while people were busy selling them and then covering their short positions as the fraudulent rise overwhelmed everything.

Advancers finally got a leg up on decliners, 4234-2198, but new lows were again dramatically ahead of new highs, 864-60.

Oil slipped by $2.22 to $86.99. Gold closed at $883.10, -7.20, while silver fell by 14 cents to $15.97.

Unless there's any doubt, nobody should be trading stocks unless they have a solid understanding of economics and the workings of the PPT, as the former is fundamental and the latter is a market dynamic which cannot be understated.

Stocks will eventually fall again, retracing the lows of today and yesterday. Within months, if not weeks, the indices should be well below today's levels, though due to the activity of the PPT, the timing of the collapse is difficult to discern.

If you are long stocks or call options, you should not be playing in this market. It's a very dangerous playground and some of the kids carry knives. If you're short or in puts - the advisable position - keep your stops fairly tight and a sharp eye on radical movements like today's. 600-point gains can drastically alter your profits.

NYSE Volume 6,765,203,000
NASDAQ Volume 3,585,647,750