Investors take note. You are screwed.
Savers and buyers of precious metals, arable land, tools and staples, rejoice! Today our frugality, honesty and disdain for speculation has reaped significant dividends.
On Wall Street, billions of dollars were flushed in a panicked selling frenzy that appears to be just beginning. One should note that other major declines began in the Winter months, specifically, the bursting of the dot-com bubble which reached its peak on March 10, 2000, when the NASDAQ topped out at 5132.52. Within months, the high-flying tech-laden index was off by more than 25%. Within a year, it had been halved.
While this current one-day selling spree may not auger as much ill (though it could be even worse), it was the largest one-day decline on the markets since August of 2010 and unless Mr. Gadaffi (God only knows how to spell his name) changes his mind about dying a martyr on Libyan soil (remember Mubarak said something similar just weeks ago), this malaise coming from Norther Africa and the Middle East is going to hang over equity markets and oil prices for the foreseeable future.
In addition to the popular uprisings in Libya and across the oil-rich nations of the Middle East - and much less reported - was the release of the S&P/Case-Shiller housing survey (full report [PDF] here), which showed home prices declining for a 4th straight month. Essentially, the housing crisis is not over, despite the artificial stimulus of a federal tax credit to the tune of $9000 for home buyers in various parts of 2009 and 2010.
Those buyers were duped into buying overpriced houses, lured by our federal government. There will be years of pain and more defaults to come, for certain. Las Vegas, Miami, Phoenix and Tampa all reached new lows in median prices. Other areas of the country were similarly down, with 18 of 20 major city areas posting declines. Released at 9:00 am, the report put a further chill into an already freezing futures market.
Stocks gaped down, with the Dow off 120 points minutes into the session, and it didn't get any better the remainder of the day.
Dow 12,212.79, -178.46 (1.44%)
NASDAQ 2,756.42, -77.53 (2.74%)
S&P 500 1,315.44, -27.57 (2.05%)
NYSE Composite 8,325.86, -182.04 (2.14%)
Declining issues slaughtered advancing issues, 5707-975, a ratio of nearly 6:1. The measure of new highs to new lows nearly reversed course, with 85 new highs on the NASDAQ, to 39 new lows. The Big Board remained skewed, with 139 new highs to just 14 new lows. Obviously, with such a paltry number of new lows, there is plenty of froth to be blown off this overheated, artificially-stimulated market. Volume was significantly higher than most recent up-day sessions, a notable development.
NASDAQ Volume 2,272,504,500
NYSE Volume 6,243,551,500
Commodities were raging. Crude oil futures on the NYMEX closed at $95.42, officially $5.41 higher, though it should be pointed out that Friday's close was just a shade over $86.
Gold finished at $1,401.10 and silver at $32.86, both having ramped up on Monday, when markets were closed, though trading volumes were very high.
The handwriting is quite clear. Investors are nervous over developments outside the US, and also inside, as the congress weighs passing a temporary, two-week continuing resolution, raising the debt ceiling only a little, and revisiting the issue again in a fortnight. This is the leadership we are offered, which can't get beyond partisan bickering to actually tackle the fundamental problems in the US economy.
Meanwhile, the stalemate continues in Wisconsin, with other states looking squarely at similar budgetary conditions and issues. 38 states have budget shortfalls which need to be addressed and the rhetoric surrounding the differences between public sector employees and those who pay their wages and benefits, the taxpayers.
If, like many, you've been aghast over the continual money-pumping by the Federal Reserve and the antecedent rise in stocks, you may want to pull up a chair and pay attention the next few weeks and months.
It's just starting to get interesting as the grand global Ponzi scheme by central bankers worldwide begins to unravel at a rapid pace.
Tuesday, February 22, 2011
Monday, February 21, 2011
Unhappy President's Day?
Just because the markets in the US are closed, doesn't mean there's no economic news from the rest of the world, and there's plenty.
Due to violence in Lybia, where President Moammar Gadhafi - via a videotaped message by his son - vows to fight the insurrection against his 42 years of tyranny, "until the last man standing," oil prices have gone ballistic, with WTI (crude oil on the NYMEX) has shot through $90/barrel and is fast approaching $100.
Americans may awaken from their three-day weekend with sticker shock when they go to fill up their cars, vans and SUVs with petrol.
Elsewhere, precious metals have also taken notice that the global situation has become extremely unstable. Gold is pricing right now at $1,406.70, up a whopping $18.10 just today. But the real story is silver, which spiked on Friday, but is putting that move to shame taday with a nearly 5% move higher, to $33.88, up $1.58! That's quite a rocket ship, there and it's more than just short covering. US investors will likely send both gold and silver higher as congress takes a week off, just prior to the most important vote of the new congress: whether or not to raise the debt ceiling.
Analysts on top of the situation feel the government needs to act by March 4th in order to avert a federal government shutdown, which leaves the congress just five days - after they return from their vacation - to work out their differences, and there are many.
One option is to raise the ceiling gradually, enough to fund the government for another month, and revisit the issue again, and, if necessary, again and again. This could be the kind of circus we get from our "leaders" - an endless game of chicken and "gotcha" while the Republic burns.
Nero would be proud.
Make note to grab as much cash out of your bank account as possible within the next two weeks. There could be fireworks dead ahead, and I'm not talking about the 4th of July variety. If the government does shut down, there could be a bank holiday right on its heels, and even without a work stoppage in Washington, the number of bank failures in the US is already up to 22 and we're not even through February yet. Four more went down on Friday; two in California and two more in Georgia, the bank failure capitol.
There were 157 bank failures nationwide in 2010, 140 in 2009 and 25 in 2008. Smaller banks have suffered the most, but the biggest - the ones bailed out by the US taxpayer - are still not immune.
Due to violence in Lybia, where President Moammar Gadhafi - via a videotaped message by his son - vows to fight the insurrection against his 42 years of tyranny, "until the last man standing," oil prices have gone ballistic, with WTI (crude oil on the NYMEX) has shot through $90/barrel and is fast approaching $100.
Americans may awaken from their three-day weekend with sticker shock when they go to fill up their cars, vans and SUVs with petrol.
Elsewhere, precious metals have also taken notice that the global situation has become extremely unstable. Gold is pricing right now at $1,406.70, up a whopping $18.10 just today. But the real story is silver, which spiked on Friday, but is putting that move to shame taday with a nearly 5% move higher, to $33.88, up $1.58! That's quite a rocket ship, there and it's more than just short covering. US investors will likely send both gold and silver higher as congress takes a week off, just prior to the most important vote of the new congress: whether or not to raise the debt ceiling.
Analysts on top of the situation feel the government needs to act by March 4th in order to avert a federal government shutdown, which leaves the congress just five days - after they return from their vacation - to work out their differences, and there are many.
One option is to raise the ceiling gradually, enough to fund the government for another month, and revisit the issue again, and, if necessary, again and again. This could be the kind of circus we get from our "leaders" - an endless game of chicken and "gotcha" while the Republic burns.
Nero would be proud.
Make note to grab as much cash out of your bank account as possible within the next two weeks. There could be fireworks dead ahead, and I'm not talking about the 4th of July variety. If the government does shut down, there could be a bank holiday right on its heels, and even without a work stoppage in Washington, the number of bank failures in the US is already up to 22 and we're not even through February yet. Four more went down on Friday; two in California and two more in Georgia, the bank failure capitol.
There were 157 bank failures nationwide in 2010, 140 in 2009 and 25 in 2008. Smaller banks have suffered the most, but the biggest - the ones bailed out by the US taxpayer - are still not immune.
Friday, February 18, 2011
Silver, 10-Year Note Are New Safety Plays
Let's dispense with the general recap right away:
The first thing that jumps out is how absurdly out of step the major indices are, with the Dow plowing ahead by nearly 6/10 of 1% and the other indices flat. This is as it has been for many months. There are extreme inequities in equities, to coin a phrase and it is a certain sign of manipulation and flights of both fancy and safety.
Dow 12,391.25, +73.11 (0.59%)
NASDAQ 2,833.95, +2.37 (0.08%)
S&P 500 1,343.01, +2.58 (0.19%)
NYSE Composite 8,507.90, +10.49 (0.12%)
Advancers finished ahead of decliners, 3600-2902. On the NASDAQ there were 248 new highs, 14 new lows. On the NYSE, new highs led new lows, 350-8. Volume was well short of being exciting.
NASDAQ Volume 2,123,685,000
NYSE Volume 4,421,542,500
As the Middle East becomes ever more the hotbed of revolution, with uprisings in nearly every country across North Africa and the Persian Gulf, investors are seeking safety and finding a comfortable place to park their money in commodities in general, but silver in particular.
Silver rocketed again today in price as buyers piled in prior to the three-day weekend, pushing the price up to $32.30, a gain of 73 cents, and even higher after the close in New York. By the time markets open in the US on Tuesday, silver could be selling for $35/ounce, so powerful is the short-covering move and subsequent break-out. Gold is closing in on all-time highs again, gaining $3.50 today, to finish at $1,388.60 in NY. Oddly enough, oil futures were down on the day, losing 16 cents, to $86.20, seemingly wanting to settle somewhere between $80 and $85 per barrel, a price with which most - both suppliers and buyers - can live.
The other area receiving an inordinate amount of attention, as Chairman Bernanke nukes the dollar, is the 10-year note, which continued to rally today, pushing yields down to 3.58% at the close. The price of the 10-year is still 100 basis points higher than it was during the summer, thanks to the inflationary effect of the Fed's ZIRP and QE2. Still, money has to go somewhere and the smart money is peeling out of overpriced stocks and into the relative safety of bonds.
For our money, silver still looks like the very best raw investment, bar none. One should be looking for deals on autos and machinery these days, before inflation gets out of control.
A three-day weekend means not having to listen to the talking heads on CNBC for an entire 72 hours. Bliss!
The first thing that jumps out is how absurdly out of step the major indices are, with the Dow plowing ahead by nearly 6/10 of 1% and the other indices flat. This is as it has been for many months. There are extreme inequities in equities, to coin a phrase and it is a certain sign of manipulation and flights of both fancy and safety.
Dow 12,391.25, +73.11 (0.59%)
NASDAQ 2,833.95, +2.37 (0.08%)
S&P 500 1,343.01, +2.58 (0.19%)
NYSE Composite 8,507.90, +10.49 (0.12%)
Advancers finished ahead of decliners, 3600-2902. On the NASDAQ there were 248 new highs, 14 new lows. On the NYSE, new highs led new lows, 350-8. Volume was well short of being exciting.
NASDAQ Volume 2,123,685,000
NYSE Volume 4,421,542,500
As the Middle East becomes ever more the hotbed of revolution, with uprisings in nearly every country across North Africa and the Persian Gulf, investors are seeking safety and finding a comfortable place to park their money in commodities in general, but silver in particular.
Silver rocketed again today in price as buyers piled in prior to the three-day weekend, pushing the price up to $32.30, a gain of 73 cents, and even higher after the close in New York. By the time markets open in the US on Tuesday, silver could be selling for $35/ounce, so powerful is the short-covering move and subsequent break-out. Gold is closing in on all-time highs again, gaining $3.50 today, to finish at $1,388.60 in NY. Oddly enough, oil futures were down on the day, losing 16 cents, to $86.20, seemingly wanting to settle somewhere between $80 and $85 per barrel, a price with which most - both suppliers and buyers - can live.
The other area receiving an inordinate amount of attention, as Chairman Bernanke nukes the dollar, is the 10-year note, which continued to rally today, pushing yields down to 3.58% at the close. The price of the 10-year is still 100 basis points higher than it was during the summer, thanks to the inflationary effect of the Fed's ZIRP and QE2. Still, money has to go somewhere and the smart money is peeling out of overpriced stocks and into the relative safety of bonds.
For our money, silver still looks like the very best raw investment, bar none. One should be looking for deals on autos and machinery these days, before inflation gets out of control.
A three-day weekend means not having to listen to the talking heads on CNBC for an entire 72 hours. Bliss!
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