Brexit Losses Erased; SIlver Soars To Near $20 Per Ounce

From Friday, July 1:

U.S. Treasuries advanced accompanied by a stimulus-fueled rally in European debt that pressured regional yields to new record lows. Treasuries were not far behind with demand pressuring the 30-yr yield to a fresh record low of 2.189% while the 10-yr yield hit 1.382%, pausing just above an all-time low of 1.381% that was notched four years ago. The 2-yr note posted a slight loss while the 5-yr note ended flat.

Silver closed in NY at 19.75 (+11.25% - best week since Aug 2013).

For the Week Ended 7/1:
Dow: +548.62 (+3.15%)
S&P 500: +65.54 (+3.22%)
NASDAQ: +154.59 (+3.25%)

Friday's Results:
S&P 500: 2,102.95, +4.09 (0.19%)
Dow: 17,949.37, +19.38 (0.11%)
NASDAQ: 4,862.57, +19.89 (0.41%)

Crude Oil 49.28 +1.97% Gold 1,344.90 +1.84% EUR/USD 1.1135 +0.35% 10-Yr Bond 1.46 -2.15% Corn 368.00 -0.88% Copper 2.22 +1.18% Silver 19.85 +6.62% Natural Gas 2.99 +2.12% Russell 2000 1,156.77 +0.42% VIX 14.77 -5.50% BATS 1000 20,677.17 0.00% GBP/USD 1.3269 -0.10% USD/JPY 102.5180 -0.80%

Stocks Regain Nearly All Brexit Losses, But Silver Tells Another Tale

While the maintainers of the status quo managed to nearly erase all of the losses from Friday and Monday due to Brexit, there is an outlier which Money Daily has referenced in the past, and its name is silver.

Gold being the choice of elitists and very rich people worldwide, it gets most of the attention in the financial press, after stocks, of course. Silver is regarded largely as an afterthought by the all-powerful, but it has been, throughout human history, an essential element in commerce, trade and capital accumulation, and today, it outpaced every other asset class by a wide margin, closing in New York at a very favorable price of $18.695, the best closing price since September of 2014.

While other assets have been languishing or found range-bound, silver has forged ahead by a nifty 35% year-to-date.

As a monetary metal, silver has no equal in terms of affordability and value for the common man or woman. The recent rise will no doubt spur further demand and subsequent gains.

Silver's rise signals a threat to phony fiat money and the monopoly of gold as a store of value. It may also be presaging a new monetary order, one in which the general populace will not be thought of as chattel.

Whoopie!

Brexit Didn't Matter After All:
S&P 500: 2,098.86, +28.09 (1.36%)
Dow: 17,929.99, +235.31 (1.33%)
NASDAQ: 4,842.67, +63.43 (1.33%)

Crude Oil 48.39 -2.99% Gold 1,325.10 -0.14% EUR/USD 1.1101 -0.22% 10-Yr Bond 1.4880 +0.74% Corn 372.75 -2.68% Copper 2.20 +0.87% Silver 18.84 +2.38% Natural Gas 2.92 +2.10% Russell 2000 1,151.92 +1.79% VIX 15.78 -5.17% BATS 1000 20,677.17 0.00% GBP/USD 1.3312 -0.92% USD/JPY 103.2700 +0.34%

Throwing Caution To The Wind, Stocks Power Higher

Stocks surged worldwide for the second straight day as investors seem determined to make Brexit an afterthought.

They're probably correct in their assessment, as, following the initial panic selling, the reality that an orderly exit from the EU by the UK will be an ongoing process.

Stocks in the US remain largely rangebound, since breaking through to new all-time highs would seem boorish and gaudy, which is why it is completely possible.

With every passing political, emotional, and economic event, the will of investors of equities continues to defy basic common sense and rudimentary risk caution. A side effect, or perhaps a direct one, is that short sellers have been thoroughly routed for the umpteenth time. Covering by shorts has been a bloody bath the past two session.

Mind the Gap.

Carry On.

In case you haven't noticed, with today's gain to 18.38, silver is up a whopping 33% YTD, from a December 31, 2015 close of 13.82.


S&P 500: 2,069.62, +33.53 (1.65%)
Dow: 17,679.34, +269.62 (1.55%)
NASDAQ: 4,778.10, +86.23 (1.84%)

Crude Oil 49.42 +3.28% Gold 1,324.20 +0.48% EUR/USD 1.1101 +0.23% 10-Yr Bond 1.48 +1.10% Corn 383.50 -2.73% Copper 2.19 +0.80% Silver 18.38 +2.74% Natural Gas 2.85 -1.31% Russell 2000 1,131.48 +2.18% VIX 16.90 -9.87% BATS 1000 20,677.17 0.00% GBP/USD 1.3432 +0.76% USD/JPY 102.8385 +0.10%

Reviving a prior feature, here's the Rolling Stones:

Stocks Rebound From Dramatic Brexit Declines; Trend Not Apparent Yet

Nothing to see here, really, as markets took Tuesday to bounce back from the losses incurred by the Brexit result.

Participants in the market will likely take today's action to suggest that the initial panic was overdone, and that Britain leaving the EU is no big deal.

The truth may be something different from the offered narrative, but it is too early to confirm any kind of trend, although the Dow, in particular, will have to do some heavy lifting to retain its prior range between 17,500 and 18,000.

New all-time highs are still within hailing distance (S&P: 2134; Dow: 18,351; NASDAQ: 5232), though they are already more than a year old, getting stale and beginning to smell moldy.

Caution is still advised when dealing with a global financial system based entirely on the promises and good faith of either governments or central banks, mostly the latter.

Tuesday Turnabout:
S&P 500: 2,036.09, +35.55 (1.78%)
Dow: 17,409.72, +269.48 (1.57%)
NASDAQ: 4,691.87, +97.42 (2.12%)

Crude Oil 47.98 +3.56% Gold 1,314.70 -0.75% EUR/USD 1.1089 +0.61% 10-Yr Bond 1.46 +0.07% Corn 394.00 -0.06% Copper 2.18 +2.56% Silver 17.81 +0.34% Natural Gas 2.88 +5.25% Russell 2000 1,106.86 +1.58% VIX 18.89 -20.80% BATS 1000 20,677.17 0.00% GBP/USD 1.3354 +1.05% USD/JPY 102.6650 +0.76%

Stormy Monday: Brexit Triggering Global Market Chaos

If the financial elites (we're looking at you Fed Governors, ECB ministers, central bankers worldwide) needed a rationale for triggering a cataclysmic collapse of global finance, they may have found their huckleberry in the British vote to leave the European Union, the Brexit, as it has become known.

Since Thursday's astonishing vote by the populace of Great Britain to exit what was once known as the European Common Merket and has morphed into a Hobbesian nightmare of Leviathan proportions known as the European Union, European Commission, European Central Bank and an amalgam of overlapping bureaucratic rules, regulations, guidelines, laws and edicts, a suddenly disunited Europe is making life miserable for masters of finance.

Stocks have been selling off at frantic paces since the verdict of the Brits, with uncertainty the keynote of the ongoing dialogue.

While the NIKKEI responded in heroic fashion on Monday, gaining 357 points, stock indices in Europe and the US were dragged down through the week's opening session, with more on the plate.

Whether Brexit is the absolute catalyst for systemic financial collapse is too early to tell, though it has certainly - to this point - served as an adequate warning shot.

Worth knowing is that the general financial condition of the world's developed and emerging economies has not been right since the first great financial shock of 2008, and efforts to repair what was broken then were akin to bandages applies to a severed artery, with the same result. The bleeding continued, and the patient never really recovered.

For eight years the global financial elites have tried to piece together a working economic narrative, to little avail and now they are faced with disintegration of their seminal project, the EU and the funny money known as euros.

Markets today were trembled by rabid selling, pushing the Dow well below its established range between 17,500 and 18,000, with the bottom falling out in dramatic fashion. All-time highs reached just over a year ago are now being viewed as unattainable, setting in motion the potential for first, a 10% correction, followed by the certainty of a full-blown bear market, which has been a long time coming.

Defining those two terms would be a matter of simplicity, if not for the vagaries of the financial lexicon. A correction may be said to be 10% of "recent" highs, and the same could be said of the bear market reading, but, if losses continue to mount, percentages may be the smallest of worries, since real dollars, euros, yen and yuan will be at stake.

With an already turbulent presidential election already underway, caution would be the preferred method of approaching finances over the following six to eight months. While many ordinary people will no doubt practice frugality and thrift in their affairs, there's some considerable doubt as to how governments and central bankers react to what are, no doubt, challenging times ahead.

Bad Bad Brits and Brexit:
S&P 500: 2,000.54, -36.87 (1.81%)
Dow: 17,140.24, -260.51 (1.50%)
NASDAQ: 4,594.44, -113.54 (2.41%)

Crude Oil 46.71 -1.95% Gold 1,329.90 +0.57% EUR/USD 1.1021 -0.19% 10-Yr Bond 1.46 -7.54% Corn 393.50 -0.19% Copper 2.13 +0.71% Silver 17.78 -0.02% Natural Gas 2.76 +2.41% Russell 2000 1,089.65 -3.36% VIX 23.43 -9.05% BATS 1000 20,677.17 0.00% GBP/USD 1.3218 -1.51% USD/JPY 102.0450 +0.25%

As Britain Votes To Leave European Union, The Establishment Is Losing Control

Just a few days ago, our Fearless Editor, Rick Gagliano, penned a post here at Money Daily espousing the belief that the Brexit/Bremain vote and the US presidential election were sideshows and being overblown in importance by the media. Perhaps it was a faux pas or even a veiled negotiation maneuver designed to keep "remain" voters away from the polls (we doubt the latter to be true). In any case, voters in Great Britain did - in establishment terms - the unthinkable, voted to depart from the European Union, and quite possibly delivered a verdict on the perilous future of the EU.

We now present the post mortem.

All hail Nigel Farage, head of the UKIP party and leader of the "Brexit" movement in Great Britain, for he has brought the nation out from under the Orwellian totalitarianism that is essentially the bloated bureaucracy of the European Union, and unshackled the common Briton from enslavement to the status quo.

Here is what Farage said as the tally was coming in, looking favorable for Britain exit from the EU:

If the predictions now are right, this will be a victory for real people, a victory for ordinary people, a victory for decent people. We have fought against the multinationals, we have fought against the big merchant banks, we have fought against big politics, we have fought against lies, corruption and deceit. And today honesty, decency and belief in nation, I think now is going to win. And we will have done it without having to fight, without a single bullet being fired…. Win or lose this battle tonight, we will win this war, we will get our country back, we will get our independence back and we will get our borders back.

Having fought the good fight as an MEP and a representative to the European Parliament for nearly two decades and yesterday, Farege's unwavering rhetoric for freedom and against oppression struck the first salvo for the people against the leading technocratic superstate of the EU, headquartered in Brussels.

For Farage, the victory may have greater consequences. With PM David Cameron admitting defeat and promising to step down come October, Farage figures to be a natural candidate for the vacated post of Prime Minister. Already the mainstream press has put the face of Boris Johnson, former mayor of London, front and center, ahead of Farage, who has said openly that he doesn't want to be Britain's PM.

That battle has a long way to go, but, for now, a rundown of just what Brexit has meant to markets around the world.

The Final Tally:
Leave
Vote share 51.9%
Votes 17,410,742 Votes

Remain
Vote share 48.1%
Votes 16,141,241 Votes

Stocks indices around the world were pounded:
ASIA:
Nikkei 225: 14,952.02, -1,286.33 (-7.92%)
Hang Seng Index: 20,259.13, -609.21 (-2.92%)
SSE Composite Index: 2,854.29, -37.67 (-1.30%)
Straits Times Index: 2,735.39, -58.46 (-2.09%)
S&P/ASX 200: 5,113.20, -167.50 (-3.17%)

EUROPE:
FTSE 100: 6,138.69, -199.41 (-3.15%)
DAX: 9,557.16, -699.87 (-6.82%)
CAC 40: 4,106.73, -359.17 (-8.04%)
EURO STOXX 50 Index: 2,776.09, -261.77 (-8.62%)
EURONEXT 100: 819.99, -59.09 (-6.72%)

Some other interesting notes from early after the voting:
British pound falls as much as 11 percent to $1.3229, weakest since 1985
Yield on 10-year Treasuries drops 29 basis points to 1.46 percent, set for biggest daily decline since 2009
New York crude oil retreats 5.1 percent to $47.56 a barrel, poised for biggest loss since February
Gold rallies as much as 8.1 percent to $1,358.54 an ounce, highest since March 2014

By the end of trading in the US, the day's damage had been assessed, though it was hardly what anybody would call a bloodbath. After all, this was only the first salvo against the establishment, though it does set in motion a complete disintegration of the EU and all of its strictures, laws, rules, regulations and burdensome bureaucracy.

For Americans, it's a good day to be a supporter of Donald Trump for the presidency. Much of what Mr. Trump has been campaigned for was contained in the Brexit platform: an end to open immigration, more civil liberties for common people, smaller federal government, less regulation, lower taxes, more power to people and localities (state's rights in the US).

While the damage to stocks was minimized, the press fell all about itself in once again over-hyping the damage. Britain and her people will not vanish from the earth. New trade arrangements will be made with the countries still remaining in the EU, but it is notable that more than a few EU member states are now calling for exit votes by the people, especially in France, Spain, Italy, the Czeck Republic, Hungary, and elsewhere.

The word on the European Union: Done. It's now become not a matter of if the EU will disintegrate, but when, and how. Those will be the real fireworks. But, between then and now, expect the establishment status quo to fight like mad dogs to retain and enhance their positions of power and prestige. In the end, they too will fail.

US stocks got mangled, with a hefty drop at the open and further displeasure for bulls in the late afternoon, with the Dow - just one day after it broke through the 18,000 upper barrier - closing below 17,500, the long-standing support threshold, on heavy volume. Losses were widespread; banks and financial stocks took the worst of it.

The Dow finished the week lower for the third time in the last four; the S&P and NASDAQ each notched their third straight week of decline.

US Stocks Got Socked:
S&P 500: 2,037.41, -75.91 (3.59%)
Dow: 17,400.75, -610.32 (3.39%)
NASDAQ: 4,707.98, -202.06 (4.12%)

Crude Oil 47.57 -5.07% Gold 1,319.10 +4.43% EUR/USD 1.1118 +0.13% 10-Yr Bond 1.58 -9.20% Corn 391.50 -1.57% Copper 2.11 -2.27% Silver 17.77 +2.40% Natural Gas 2.70 -1.32% Russell 2000 1,127.54 -3.81% VIX 25.76 +49.33% BATS 1000 20,677.17 0.00% GBP/USD 1.3684 +0.06% USD/JPY 102.2550 0.00%

For the Week:
Dow: -274.41 (-1.55%)
S&P 500: -33.81 (-1.63)
NASDAQ: -92.36 (1.92)

Brexit/Bremain Vote Close; Results Will Affect Friday Trading

World markets have lost their collective minds over Thursday's vote for Britain to remain or leave the EU, with most of the bets on "remain."

Since bets only count at bookmaker parlors, and the votes won't be fully counted until sometime well into the early morning hours in the US, the outcome is far from decided.

Apparently, US market participants believe that the remain vote is in the bag, since stocks broke out of their well-established, three-month-long trading range today, with a massive upside move.

Just guessing, tomorrow will be interesting, but the top will not hold.

BREEEEEMAIN! PLEASE!
S&P 500: 2,113.32, +27.87 (1.34%)
Dow: 18,011.07, +230.24 (1.29%)
NASDAQ: 4,910.04, +76.72 (1.59%)

Crude Oil 49.27 -1.68% Gold 1,268.70 +0.44% EUR/USD 1.1310 -1.03% 10-Yr Bond 1.74 +3.20% Corn 398.50 +0.19% Copper 2.15 -0.42% Silver 17.42 +0.36% Natural Gas 2.69 -0.44% Russell 2000 1,172.22 +2.02% VIX 17.25 -18.52% BATS 1000 20,677.17 0.00% GBP/USD 1.4578 -2.92% USD/JPY 104.9800 -1.53%

Too Much Drama: Brexit/Bremain And US Presidential Elections Are Sideshows To Be Ignored

Kids love drama. That's why they put on little shows for their friends, parents, grandparents, other siblings. They are also expert at throwing tantrums and acting out to get their own ways on things they like and/or don't like, or want to or don't want to do.

Typically, kids don't like certain foods (think vegetables), going to bed early or being cooped up in a classroom for 6-7 hours a day from the time they're six until seventeen or eighteen. If kids decide to go on to college, they may actually find themselves in classrooms until they're 21, 22 or even longer should they decide to attend graduate school, become a lawyer, doctor, or pursue a doctorate in any field of endeavor.

Of the three things kids don't like, it can be readily assumed that at least two of them are actually good for them, even after they cease being kids. For instance, vegetables (especially the non-GMO varieties) are proven to be good for overall health, vitality and longevity. Getting a good night's sleep is also a very healthy, albeit numb in the main, activity.

Going to school for a significant percentage of one's formative years is questionable. A solid education is admirable and achievable, though what constitutes such in public schools may not exactly fit the billing. Thus, the love of and use of drama to achieve ends is largely unjustified in the case of the wants (not needs) of people under the age of 20, i.e., kids.

Expanding this concept - that drama is unjustifiable - into adult life and interaction with mass media, might be useful in assessing current events, particularly the upcoming vote or referendum (tomorrow, Thursday, June 23) on whether Great Britain sh
ould remain or leave the European Union (otherwise known as Brexit or Bremain, depending upon one's point of view) and the drawn out affair that has become a nearly two-year ritual in choosing a president in the United States.

In terms of both events, the media time allotted to examining, reporting, tweeting, broadcasting, dissecting, analyzing, and otherwise trying to understand the issues has been, in a word, excessive.

In other words, the media, obsessed with having to fill countless hours of broadcast time (radio, TV, internet) and print space (newspapers, magazines, internet) has committed the undeniable sin of "too much drama." The British and American people have been overwhelmed with "news" on the impact of the British referendum and the American election.

Both events will take place in the span of one day, yet the time allocated to it by the media exceeds that period by orders of magnitude.

Like kids, the media clamors for attention, trying to convince the public (and maybe even themselves) of the overall importance of these events. Truth is, neither will matter that much to the normal functioning of an average adult life. Whether Britain remains in the EU or not will not have dramatic impact on one's individual day-to-day activities, nor will the choice of Donald Trump or Hillary Clinton for Americans.

Mainstream media would rather have you and I and everyone else in the world glued to their TVs and radios and internet sites and newspapers non-stop, forever and ever, no matter how trivial or important the current crop of stories, analyses, and perceptions.

Most adults (and kids, too) have a routine in their lives which goes something like this: get up, clean up, work, eat, relax, sleep. In between those major activities - and it is possibly an amazing discovery that roughly a third of that time is devoted to sleeping, and maybe another third to working - people do everything else, including, in no particular order, having sex, voting, playing, raising kids, tending a garden, pursuing a hobby, reading, listening to or viewing things other than what the mainstream media spouts effusively, and a plethora of other mundane activities.

The point is that the elections fall into this diffuse area occupied in the large by "everything else." Brexit and the presidential elections barely even register on the life radar in terms of importance, meaning that whatever way it goes, individuals (aka, people) will go about their lives in largely the same way as before the "monumental" voting.

That the media devotes so much time, effort and money to events which are, in general terms, non-eventful, uncovers the abject failure of life in the information age. If you're in your 60s, for instance, you've lived through the administrations of as many as 12 presidents (Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, George H.W. Bush, Clinton, George W. Bush, Obama) and are now on the cusp for a 13th. Whether the choice is Hillary Clinton or Donald Trump will, in the long route of history, be conspicuously inconsequential.

From that timely perspective, each and every one of these presidents has done a fair job of keeping the American public somewhat safe, secure and happy, protected the constitution to varying degrees, and also kept the American public in check, or, kept the general population from violent rebellion. On that final point, we're probably a bit more civilized these days, choosing to simply ignore the government as much as possible than openly rebelling against it. That kind of stuff generally gets one killed, maimed, or jailed, none of which are desirable outcomes.

As for the Brits, Money Daily doesn't have much interaction with our former colonial masters, but England seems to be a somewhat genteel and fair place to live. The current living residents of England will cast their votes tomorrow, but the effects will be barely noticeable, likely for decades. People will adjust and adapt.

While Brits and Yanks alike are concerned about the deterioration of their civil liberties - a theme common to the Brexit/Bremain vote and the US presidential election - it seems a slow, drawn-out process and also one to which one can adjust. Just like eating your vegetables and getting a good night's sleep are desirable and contribute to a better life, ignoring elections and votes and avoiding government at all levels is probably the most prudent behavior.

And prudence, from Aristotle to Aquinas to Pascal, is a vastly more desirable human trait than relying on personal drama to achieve one's desires.

+++++++++++ +++++++++++

Today in the markets, perhaps taking an unattributable cue from the above essay, there wasn't much in the way of panic, fear, greed, avarice, sloth, joy, or any other emotion. Equity markets were fairly flat, owing to the unforgivable media rhetoric surrounding tomorrow's Brexit/Bremain referendum having wrung out every possible trading scheme or maneuver.

Panic? Thy Name is Brexit:
S&P 500: 2,085.45, -3.45 (0.17%)
Dow: 17,780.83, -48.90 (0.27%)
NASDAQ: 4,833.32, -10.44 (0.22%)

Crude Oil 48.95 +0.20% Gold 1,269.10 -0.27% EUR/USD 1.1294 +0.41% 10-Yr Bond 1.69 -0.71% Corn 395.00 -0.32% Copper 2.13 +0.78% Silver 17.28 -0.23% Natural Gas 2.91 -2.70% Russell 2000 1,148.97 -0.42% VIX 21.22 +14.83% BATS 1000 20,677.17 0.00% GBP/USD 1.4691 +0.15% USD/JPY 104.4400 -0.32%

Money Daily Milestone Missed; Markets Non-Functional

So busy with other responsibilities, we didn't recognize our own milestone.

Friday's post was the 2000th post for Money Daily, just in case anybody is keeping track.

The markets were very dull in advance of Thursday's Brexit vote. Even Janet Yellen testifying to the senate today wasn't market-moving, though that's not surprising. She's easily the most incompetent speaker and communicator the Fed has ever had.

Tuesday Trauma:
S&P 500: 2,088.90, +5.65 (0.27%)
Dow: 17,829.73, +24.86 (0.14%)
NASDAQ: 4,843.76, +6.55 (0.14%)

Crude Oil 48.95 -0.85% Gold 1,271.30 -0.09% EUR/USD 1.1251 +0.02% 10-Yr Bond 1.70 +1.62% Corn 396.50 +0.06% Copper 2.12 +0.31% Silver 17.27 -0.25% Natural Gas 2.99 0.00% Russell 2000 1,153.87 -0.33% VIX 18.48 +0.60% BATS 1000 20,677.17 0.00% GBP/USD 1.4668 -0.01% USD/JPY 104.7795 0.00%

Markets Get Boost On Brexit Opposition; Fake Move Fades Throughout Trading Session

When equity prices jump suddenly at the opening bell by one percent or more - as they did today in New York - the only ones who benefit are those already in the market, with positions in the "selected" stocks.

Average investors have no opportunity to partake in the market's sudden generosity. Hedgers and speculators who played properly prior to the open are the big winners. Wealth is not created in any way, shape, or form, other than in a paper manner. It's a trade and soon enough it vanishes.

Stocks, for whatever they're worth (caveat emptor), lost half of their gains over the course of the day. The NASDAQ was up 88 points and closed up 36 and change. The S&P was up 29 points - hitting the magic 2100 spot, again - before falling throughout the day to close up a mere 12 points.

Blue chips fared no better. The Dow was up a whopping 271 points by 10:00 am EDT, but ended the day disappointing to all but the HFTs, who were no doubt front-running every single trade (it's rumored that there were a few hundred bettors in the game), ahead by only 129.

Most of the euphoria at the open was due to a media frenzy over the prospect of England remaining in the European Union. Polls have been tight, but the mainstream media continues to portray Thursday's upcoming vote as a referendum on patriotism for Brits. Vote to stay in the EU, you're a good citizen; vote to leave, or Brexit, you may just be a terrorist sympathizer.

Of course, the media spin is just that, all noise and no substance. Not only would leaving the EU be better for most working Britons, it would also send a powerful message to the status quo that their form of governing is no longer working, and must go. With so many government jobs on the line, the mainstream is pushing hard for a "stay" vote.

Last laugh of the day went to silver holders. Even the best efforts of the central bank cabal could not keep gold's little brother down, closing at 17.52 per troy ounce.

On that note, Hugo Slainas Price proposes a Silver Ruble for Russia. Interesting reading for anyone considering honest money.

Stormy Monday?
S&P 500: 2,083.25, +12.03 (0.58%)
Dow: 17,804.87, +129.71 (0.73%)
NASDAQ: 4,837.21, +36.88 (0.77%)

Crude Oil 49.17 +2.48% Gold 1,292.70 -0.16% EUR/USD 1.1307 -0.11% 10-Yr Bond 1.67 +3.21% Corn 422.75 -3.43% Copper 2.09 +1.80% Silver 17.52 +0.63% Natural Gas 2.97 +2.67% Russell 2000 1,158.05 +1.17% VIX 18.20 -6.23% BATS 1000 20,677.17 0.00% GBP/USD 1.4685 +1.52% USD/JPY 103.8550 -0.84%

Yellen And Fed Fail; Market Confidence Fades; Stockman Is Right; 13 Weeks On Dow Range

It's Friday, it's summer, so this recap of the events of the day and the week will be as brief as possible.

First up, the weekend's required reading is David Stockman's Abolish the FOMC, bring back the green eyeshades, in which the former Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan proposes an elegant yet simple solution to the current and ongoing tyranny of central bank incompetence.

In as few words as possible, Stockman proposes that the market set interest rates, pining for the halcyon days of true price discovery. The post is well worth twenty minutes of reading.

As for stocks, globally, the week was something of a disaster, with massive falls in Asia and Europe, though there was something of a rebound on Thursday. US indices struggled though the opacity of another FOMC policy decision (nothing) and fell into a funk on Thursday morning, with the Dow dipping below the magic 17,000 mark, but magically rallying for a noticeable gain for the day.

Friday was not so euphoric, with options expiration afoot (we suspect most of the big players cashed out on Thursday), though it was somewhat dramatic, as all three majors traded in the red the entire session. The Dow actually touched down just above 17,600, keeping the magical 500-point range (to 18,000 on the upside) intact for a thirteenth consecutive week.

This particular range-bound trading pattern does have a precedent, that being the 23-week span from February to early July of last year, when the blue chip index traded generally between 17,750 to 18,250, making an all-time high in the process (mid-May).

So, despite the two semi-corrections in August of 2015 and January of this year, the Dow has now settled into a regime just 250 points below the previous plateau. Welcome to the world of paper games.

Friday was simply get-away day, aided greatly by the NY Fed, which lowered its second and third quarter estimates for GDP growth to 2.1%, which is still probably too high. With that, unless the fourth quarter is gangbusters, along with the 0.7% rate of growth for GDP in the first quarter, it will be tough for GDP to hit the 2.0% target (that's a joke, right?) for this year.

Maybe the elections will trigger a change for 2017. Maybe not.

In any case, it's too far ahead to look. Brexit vote comes up Thursday, which could trigger fireworks, though some of the smart money is saying the vote will be for the UK to stay in the EU, and it will be rigged.

Happy hunting!

Friday's Fallout:
S&P 500: 2,071.22, -6.77 (0.33%)
Dow: 17,675.16, -57.94 (0.33%)
NASDAQ: 4,800.34, -44.58 (0.92%)

Crude Oil 48.07 +4.03% Gold 1,296.80 -0.12% EUR/USD 1.1279 +0.46% 10-Yr Bond 1.6180 +3.45% Corn 436.25 +2.59% Copper 2.05 +0.29% Silver 17.47 -0.78% Natural Gas 2.89 +1.16% Russell 2000 1,145.11 -0.27% VIX 19.28 -0.46% BATS 1000 20,677.17 0.00% GBP/USD 1.4355 +1.03% USD/JPY 104.2060 -0.10%

For the week:
Dow: -190.31, (-1.07%)
S&P 500: -24.85 (-1.19%)
NASDAQ: -94.21 (-1.92%)

Intervention By Any Other Name; Fed Agents Clearly Trading Equities, Slamming Gold And Silver

Can there be any further doubt that the Federal Reserve is intervening - i.e., trading - in the equity markets?

Let's ask that again.

Is the Fed buying stocks?

You betcha!

Once again, today, the Dow pierced the 17,500 mark to the downside in early trading, and, has become the normal pattern, stocks took a steady advance off the lows to finish higher, and well away from the bottom of the trading range (17,500-18,000) that has persisted for three months.

Clearly, the Fed has no clue what to do except issue press releases and threaten to raise rates, all in an economic environment that is screaming stagnation and portending a nasty recession.

Also evident is the continuing manipulation of the precious metals markets. Gold and silver were both sharply higher early in the day, but were slaughtered in the afternoon for no apparent reason (other than being competition to all forms of fake fiat money). Silver fell from a high of $17.80 to under $17.20 in the course of six hours, a move of more than four percent. Gold, which had pierced the $1300 mark, was also dispatched, dropping to $1280 from a high of $1315, a $35 move, nearly four percent to the downside.

Everything is completely fake and markets (and maybe people) will only withstand the onslaught of intervention and manipulation for only so long.

How long?

When everything has gone to hell in a hand basket.

Fake, Fake, Fake, Fake!
S&P 500: 2,078.00, +6.50 (0.31%)
Dow: 17,733.10, +92.93 (0.53%)
NASDAQ: 4,844.92, +9.98 (0.21%)

Crude Oil 45.96 -4.27% Gold 1,283.70 -0.36% EUR/USD 1.1238 -0.20% 10-Yr Bond 1.56 -2.01% Corn 424.75 -0.99% Copper 2.05 -1.75% Silver 17.21 -1.67% Natural Gas 2.86 -0.63% Russell 2000 1,147.08 -0.19% VIX 19.24 -4.47% BATS 1000 20,677.17 0.00% GBP/USD 1.4213 +0.12% USD/JPY 104.3545 -1.54%

Fed Does Not Hike Rates, As Expected; Markets Dull

Not only has the Fed run out of inflation-and-recession-fighting tools and rhetoric, but the US central bank seems to be running out of mental acuity and moral purpose.

What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.

The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.

Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.

The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.

At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.

While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.

The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.

The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)

Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%

Slump Continues For Stocks; Oil Lower As Discontent Grows

While the world awaits an edict from the high halls of the Federal Reserve on Wednesday, when the FOMC concludes their two day meeting and announces no change in the federal funds rate, investors appear increasingly nervous, not over the expected nothingness dictum from the Fed, but from the overall malaise that has captured markets, otherwise known as stagnation.

What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.

Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.

Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).

Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."

The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.

Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.

The policies and practices of the past 20 or 30 years cannot continue indefinitely.

The time is coming for major change.

Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)

Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%

Markets Lower On Brexit And Rate Hike Fears

Of the various events that might cause investors to give pause to buying stocks, or, worse, start selling en masse, the two most terrifying are probably the threat of the UK leaving the European Union (aka, Brexit) and the ongoing dialogue from the Federal Reserve concerning raising the federal funds rate.

Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.

The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.

As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.

For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.

What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.

There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.

Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)

Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%

As Expected, Dow Falls Back Into Sub-18,000 Range

Editor's Note: Apologies are in order for the tardiness of the extended post, but the publisher has been trying to cope with an unfair labor situation and other troublesome issues. Those are now past. This blog shall forge ahead.

The week ended on a down note, as stocks fell across the board on the US indices.

While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.

More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.

US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.

Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.

The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.

None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.

The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.

Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.

For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.

The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.

For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)

Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)

Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%

Dow Touches 18,000 Agains, Fails

After a shaky start, the Dow - and the other equity averages - erased the morning's losses and finally managed to end the day with just minor losses.

The industrials punched through the 18,000 mark again, but could not sustain the rally, closing just shy of that critical, psychological marker.

This pattern has been in play more often than should be mentioned, prompting belief that the Federal Reserve itself is intervening in stocks, something - in this dystopian reality - that should surprise nobody.

In any case, if the Fed has "the back" of all market plungers, then why not just go ahead and buy your ticket to the good life, via Amazon, or Google, or Apple, perhaps even taking a flyer on the occasional small cap or some oil driller?

If it were only so easy. A wise man once said, "if it was that easy, we'd all be rich." For the monied gangsters doing business on the South end of Manhattan island, perhaps it is so. But, they have other problems, like margin calls, undersized genitalia and assorted mental maladies.

The world of finance is especially rigged to make certain people rich. For the rest of us, it's pretty much a crap-shoot, which is why so many, especially since the economic calamity of 2008-09, have opted to not play any more.

Tomorrow is Friday, and, for much of the expanse of the great United States of America, the weather should be pleasant, if not outright spectacular. Punch in, punch out, grab an adult beverage and had for the patio. Fire up the grill and cook something.

Money doesn't buy happiness. There is surely more to living than counting your shekels. Besides, did you see the gains in silver the past two days?

Something is afoot.

Thursday's Troubled Trip:
S&P 500: 2,115.48, -3.64 (0.17%)
Dow: 17,985.19, -19.86 (0.11%)
NASDAQ: 4,958.62, -16.03 (0.32%)

Crude Oil 50.42 -0.28% Gold 1,271.90 -0.06% EUR/USD 1.1314 -0.04% 10-Yr Bond 1.68 -1.52% Corn 426.00 -1.22% Copper 2.04 0.00% Silver 17.28 +0.10% Natural Gas 2.95 +3.19% Russell 2000 1,181.20 -0.65% VIX 14.64 +3.98% BATS 1000 20,677.17 0.00% GBP/USD 1.4462 +0.02% USD/JPY 106.9945 +0.03%

Dow Closes Above 18,000; SPX Within 15 Points Of All-Time High; Silver Rockets Over 17; Cruce Oil At 11-Month High

No commentary required.

S&P 500: 2,119.12, +6.99 (0.33%)
Dow: 18,005.05, +66.77 (0.37%)
NASDAQ: 4,974.64, +12.89 (0.26%)

Crude Oil 51.52 +0.57% Gold 1,266.90 +0.36% EUR/USD 1.1402 +0.02% 10-Yr Bond 1.71 -0.41% Corn 432.50 +1.11% Copper 2.07 +0.34% Silver 17.11 +0.77% Natural Gas 2.85 -0.28% Russell 2000 1,188.95 +0.76% VIX 14.08 +0.21% BATS 1000 20,677.17 0.00% GBP/USD 1.4522 +0.03% USD/JPY 106.8950 0.00%

Stocks Rally, Then Fall, In Late-Day Trading

Roughly 2:15 pm EDT, all of the major indices in the US began selling off, apparently for no reason.

Probably more to the point is that the Dow Jones Industrial Average poked above the magical and mysterious 18,000 mark a few times during the session, but could not sustain a rally beyond it.

As has been often suggested and sometimes proven, if the stock market is made up more of psychology than fundamental reality, 18,000 is a price too far to pay for the Dow, even for the most bullish bulls in the china shop that is the NYSE and the NASDAQ.

In any case, stocks closed well off their highs and only a little closer to all-time highs, last seen more than a year ago.

This doesn't appear to be a positive sign for stocks; the truth is that stocks are selling at historically high valuations, a condition that normally precedes a sharp selloff. With the Fed heavily "invested" in stocks, today's sudden reversal of fortune does not bode well, either for the Fed's monetary gimmickry nor for rate increases any time this year.

Those who believe that stocks are the only game in town - and, there's an acronym for that: TINA (There Is No Alternative) - hang on to your hats, gents. The drop may be sudden and deep.

Ouch! That Might Leave A Mark:
S&P 500: 2,112.13, +2.72 (0.13%)
Dow: 17,938.28, +17.95 (0.10%)
NASDAQ: 4,961.75, -6.96 (0.14%)

Crude Oil 50.38 +0.04% Gold 1,247.30 +0.02% EUR/USD 1.1358 +0.04% 10-Yr Bond 1.71 -0.58% Corn 427.00 -0.06% Copper 2.05 +0.17% Silver 16.41 +0.07% Natural Gas 2.86 +1.82% Russell 2000 1,179.97 +0.26% VIX 14.05 +2.93% BATS 1000 20,677.17 0.00% GBP/USD 1.4540 +0.02% USD/JPY 107.3025 -0.03%

Janet Yellen And The Fed Are Dangerous To Your Well-Being

Apologies for the blaring headline, but this is getting a bit ridiculous. Truthfully, the headline suggested by our ace writer, Fearless Rick, had a definite Donald Trump tone to it, so it was scrapped in favor of the watered-down version.

For seven years - since the great collapse of 2008-09 - we've been listening to the babble coming out of the mouths of various Federal Reserve governors, and none of it was believable nor helpful. The US economy is circling the toilet drain, and various economies around the globe have already been flushed down the sinkhole of fetid monetary policy.

Here is just one quote from Janet Yellen in her address to the World Affairs Council (another bunch of clueless monetarists) that speaks volumes about what she knows and doesn't know:

I see good reason to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones.

If Mrs. Yellen would care to elaborate on just what those positive forces could be, it's expected that almost nothing would come out of her mouth, because she's doing what she does best, spout nonsense, in the best tradition of the Maestro himself, the venerable former Fed Chairman, Alan Greenspan. In all honesty, just what positive forces are there supporting employment growth after last week's disastrous non-farm payroll report for May, in which the US economy created a paltry 38,000 jobs when 164,000 were expected.

Additionally, Chair Yellen believes inflation is good for the economy, when most people in the real world would like to see some softening of prices and/or an increase in their wages. On the one hand, deflation in consumer prices stretches one's money; on the other, wage hikes usually occur when the economy is growing robustly. Since Americans can't have both at once, it is supposed that we'll get the former, and like it.

Naturally, the bozos on Wall Street took all of it in stride and just bought more overpriced stocks:


S&P 500: 2,109.41, +10.28 (0.49%)
Dow: 17,920.33, +113.27 (0.64%)
NASDAQ: 4,968.71, +26.20 (0.53%)

Crude Oil 49.69 +2.20% Gold 1,247.70 +0.39% EUR/USD 1.1362 -0.02% 10-Yr Bond 1.72 +1.12% Corn 426.75 +2.03% Copper 2.12 +0.31% Silver 16.49 +0.73% Natural Gas 2.81 +1.41% Russell 2000 1,176.62 +1.07% VIX 13.61 +1.04% BATS 1000 20,677.17 0.00% GBP/USD 1.4455 -0.14% USD/JPY 107.6200 +1.10%

Weak Jobs Number; Worst In Six Years Rattles Market

At the end of the day, the weakest jobs number since 2010 didn't deter stock traders much, though the damage was more severe earlier in the session, another carbon copy of the previous two, with a deep drop at the open, followed by relentless pumping towards the positive.

While Friday's effort left much to be desired, it has now become all-too-obvious that there is no such thing as a fair and open market in US stocks, especially in the face of negative economic data. The federal government and agents of the Fed are adamant about painting a rosy picture of the economy, even though the metrics - especially manufacturing and non-farm payrolls this week - are using a strikingly different palette.

The 38,000 new jobs created in May, as reported by the BLS, was miles below the consensus estimate of 164,000 and gives the Fed much more thinking material as concerns a rate hike, which now appears to be off the table for June, at the very least.

What the number suggests is that despite all the howls from the president, his advisors and others on TV, the economy is in a precarious state, not one in which overheating is even a remote possibility. This would be no time to raise interest rates.

While stocks held their own during a tumultuous week, Friday saw gold and silver rally back, perhaps an indication that all is really not well in the kingdom of Obama.

On The Week:
Dow: -66.16, (-0.37%)
S&P 500: +0.07 (0.00)
NASDAQ: +9.01 (+0.18)

For the Day:
S&P 500: 2,099.13, -6.13 (0.29%)
Dow: 17,807.06, -31.50 (0.18%)
NASDAQ: 4,942.52, -28.85 (0.58%)

Crude Oil 48.90 -0.55% Gold 1,246.50 +2.80% EUR/USD 1.1366 0.00% 10-Yr Bond 1.70 -5.91% Corn 418.25 +0.72% Copper 2.12 +2.42% Silver 16.44 +2.59% Natural Gas 2.76 -0.54% Russell 2000 1,164.14 -0.55% VIX 13.47 -1.17% BATS 1000 20,677.17 0.00% GBP/USD 1.4515 0.00% USD/JPY 106.5450 0.00%

Wealth Building Suggestions In The Age Of Idiocy

Here are some pretty simple ideas for building and preserving wealth. When it comes to debt, not all is bad, though excessive debt is a non-starter for most people. Manage debt wisely. Any business will tell you they needed a loan or an equity partner to make money; people aren't very different.

Here are a few suggestions:
1. Buy silver (dollar cost average; buy a certain amount, be it $20 or $2000, per month, regardless of price.
2. Hide silver (self-explanatory) and don't touch it. This is your secret stash, outside the govenment's hands.
3. Find a business you can operate from home, even if it's a little more than just a hobby. Deduct all allowable expenses. I've been telling people to do this for years and the number who have listened and done it approaches ZERO. The tax code makes it easy to deduct substantial portions of your expenses.
4. Read "The Richest Man In Babylon." Follow the book's advice. Here's's a PDF online.
5. Never buy prepared foods at a grocery. Total junk, and a huge ripoff. Cook meals at home.
6. Have a garden. Even a 6x6 garden can produce a significant amount of produce.
7. Never stop learning. Knowledge is power.
8. Spend money like you don't have much. Always ask for a discount or deal.
9. Never, ever hire an investment advisor. If you think you don't know enough about investing, see #7 and educate yourself. The fact that you are reading this post makes you a candidate for being your own investment advisor and money manager.
10. Be a Boy Scout. Their motto is "Be Prepared."
11. Never panic, in either buying or selling situations. Trust your gut.

There are many more...

As far as the markets are concerned, Thursday was a repeat performance (by agents of central bankers) of Wednesday, with early losses rapidly erased and the major averages making a diagonal line from lower left to upper right on the charts.

Truly disturbing behavior from some exceptionally disturbed people.

Viola!
S&P 500: 2,105.26, +5.93 (0.28%)
Dow: 17,838.56, +48.89 (0.27%)
NASDAQ: 4,971.36, +19.11 (0.39%)

Crude Oil 49.15 -0.04% Gold 1,213.10 +0.04% EUR/USD 1.1149 -0.04% 10-Yr Bond 1.81 -1.90% Corn 414.75 -0.12% Copper 2.07 +0.17% Silver 16.00 -0.16% Natural Gas 2.78 0.00% Russell 2000 1,170.58 +0.65% VIX 13.63 -4.01% BATS 1000 20,677.17 0.00% GBP/USD 1.4405 -0.10% USD/JPY 108.9500 +0.08%

Suspicious Behavior In Stocks Leads To Belief That Fed Is Buying

After dismal data out of Japan and some troubling manufacturing numbers in the US, stocks opened sharply lower on Wednesday, reversing the short-covering faux rally into Tuesday's close.

But, the trauma was short-lived, ending abruptly, absolutely minutes after the open. Some people surely got caught short at the wrong moment, thinking, wrongly, that the era of central bank noise and confusion was about to meet a fitting end. Stocks continued an inexorable ascent throughout the day, based on nothing other than front-running computer bots and anti-competitive algos run by criminal banks.

Of course, no such thing would happen. The signs of a collapsing global economy have been with us for the past seven or eight years now, but somehow, stocks continue to pace along, and lately, they just fluctuate in a narrow zone.

This trading conundrum - in which outflows from equities has been ongoing for seventeen weeks - has to be the work of the central bank, or banks, acting in concert to keep asset prices from collapsing to where they might belong, about 40-=0% lower than where they currently reside.

Since the Bank of Japan has been spotted owning a hefty percentage of the biggest companies on the Nikkei, it shouldn't surprise anybody that the Federal Reserve is working behind the scenes to keep US equities floating on vapors.

It's a disgusting, completely inappropriate condition. The Fed is engaged in the worst form of market manipulation, in secret, buying selectively to keep prices from collapsing, in a most offensive manner.

While Money Daily considers this kind of activity to be nothing short of criminal behavior at best and immoral destruction of the whole economy at worst, others are entitled to their opinions, such as the corrupt Keyenesians and insiders on Capitol Hill who profit handsomely from Fed interventions.

Their opinions are typically based on nothing other than self-interest, greed and keeping their jobs. They should all be out on the street. Hope springs eternal.

Maybe by November.

Oh, Happy Day!
S&P 500: 2,099.33, +2.37 (0.11%)
Dow: 17,789.67, +2.47 (0.01%)
NASDAQ: 4,952.25, +4.20 (0.08%)

Crude Oil 48.91 -0.39% Gold 1,215.20 -0.19% EUR/USD 1.1188 +0.02% 10-Yr Bond 1.85 +0.65% Corn 412.00 +1.79% Copper 2.07 -1.07% Silver 15.98 -0.12% Natural Gas 2.74 +0.84% Russell 2000 1,163.04 +0.71% VIX 14.20 +0.07% BATS 1000 20,677.17 0.00% GBP/USD 1.4411 -0.01% USD/JPY 109.4650 -0.03%

A Beginning And An End: Stocks And Oil Hit The Skids

Tuesday marked a beginning and an end in more ways than just the day and date.

On the one hand, today was the start of the trading week, shortened by Monday's Memorial Day holiday. On the other, it was May 31, the final trading day of the month, a date normally associated with the buying of stocks as "window dressing," wherein funds pad their holdings with the most favored stock offerings.

As days go, this one was a downer for stocks, with the major averages taking a deep dip before a late-session rally brought the S&P and NASDAQ respectively closer to breakeven and into positive territory. The Dow suffered the worst, losing nearly 150 points before ripping off a significant portion of the losses in the closing hour, ending with a drop close to 1/2 percent.

Thus, the day's trading may have marked the start of another downtrend for stocks, following the massive gains of the prior week. Notable was trading in WTI crude oil futures, which tested the $50 mark before falling off to close more than a dollar lower. Oil has been on a tear since bottoming out at $26 per barrel in mid-February.

An astonishing feat of market movement, the price of crude has nearly doubled in just over three months, but the phony pumping may have come to a quick end. Time will tell if $50 turns out to be a price too high to bear and whether stocks will begin a hasty retreat, having tested the top of the short-term range.

Investing and market-watching alike have become spectator sports of sorts for many, depending upon the level and length of financial repression one can endure, both of which have been in play for far too long.

S&P 500: 2,096.96, -2.10 (0.10%)
Dow: 17,787.20, -86.02 (0.48%)
NASDAQ: 4,948.05, +14.55 (0.29%)

Crude Oil 48.83 -1.01% Gold 1,217.50 +0.07% EUR/USD 1.1133 +0.03% 10-Yr Bond 1.83 -0.92% Corn 406.50 -1.51% Copper 2.08 -1.40% Silver 16.00 -1.65% Natural Gas 2.71 +1.61% Russell 2000 1,154.79 +0.38% VIX 14.19 +8.16% BATS 1000 20,677.17 0.00% GBP/USD 1.4486 +0.04% USD/JPY 110.7115 -0.03%

The Federal Reserve Faces Insolvency As It Attempts Impossibile Rate Hikes

As has been posited here on Money Daily and elsewhere, the Federal Reserve is facing a severe solvency crisis, due primarily to the bank bailouts from 2008-09.

In a headline story on - of all places - Yahoo! Finance, the Fed faces a real, dangerous situation if and when they try to normalize rates - something many economists say is nearly impossible to do without destroying the entire monetary system of the United States, and, ostensibly, the world.

The article fleshes out how US taxpayers could be on the hook for the Fed's bad debts, stemming from overpayment on mortgage and treasury note, bills and bonds in years past, specifically during the various QE sessions from 2009-2014.

It's long been held that the Fed was buying bad mortgage notes and bonds at par, when the true value of these slips of counterfeit are more than 30-70% lower. This effectively puts the Fed itself in a condition known to many in the world of finance as either insolvent or bankrupt.

Insolvent is the operative term here, since there is no functioning body by which the Fed can go to for a reorganization or liquidation, as do businesses or individuals in bankruptcy.

The solution would be to dissolve the Federal Reserve, extinguish all debts (which is anything numerated in US dollars), and have the US government - as is required by the constitution - issue a new currency, with gold and/or silver as backing, as opposed to the "full faith and credit" backing to which Americans have become accustomed.

This, as the presidential race looks to be one which a certain maverick billionaire, Donald J. Trump, has a solid chance of winning, could be the beginning of the end to the financial repression initiated by the Fed and its member banks and a start toward a return to honest money.

Capping off the week was a speech by Fed Chair Janet Yellen, characterized by the media as being "hawkish" for a rate hike in June or July.

Apparently, investors either disagreed or threw caution to the wind in the face of the three-day Memorial Day weekend, boosting stocks late in the session, ending what was a banner week for US stocks, especially the high-leverage, high-flying NASDAQ.

On the week:
Dow: +372.28 (+2.13%)
S&P 500: +46.74 (+2.28%)
NASDAQ: +163.95 (+3.44%)

For the day:
S&P 500: 2,099.06, +8.96 (0.43%)
Dow: 17,873.22, +44.93 (0.25%)
NASDAQ: 4,933.50, +31.74 (0.65%)

Crude Oil 49.42 -0.12% Gold 1,213.20 -0.78% EUR/USD 1.1114 -0.71% 10-Yr Bond 1.85 +1.54% Corn 412.25 +0.98% Copper 2.11 +0.38% Silver 16.21 -0.81% Natural Gas 2.16 +0.65% Russell 2000 1,150.45 +0.94% VIX 13.08 -2.61% BATS 1000 20,677.17 0.00% GBP/USD 1.4613 -0.37% USD/JPY 110.3725 +0.56%

Flat Is Good Says Yahoo! Finance, Which Should Know

"Why a flat day is good for the markets" screams the headline on Yahoo! Finance at the close of trading on Thursday.

Of course closing flat is good. Up is good, down is good, flat is good. Darn, the markets are even good when they're closed.

It's all about the narrative, with the financial media desperately trying to keep convincing an ever-shrinking number of "home-gamers" (trtaders with their own individual accounts), 401k holders, and other interested parties that the economy - and the stock market in particular - have never been better, or at least to convince themselves that they are convincing somebody.

It's a complete crock.

The global economy is, and has been, on its knees since the fall of 2008. Everything after that is a facade, made possible by trillions of dollars spent by the Federal Reserve and matching amounts of yen, yuan, euros and rupees by corresponding central banks, stock buybacks, income sheet fraud, mark-to-fantasy accounting, high valuations and the lack of any real price discovery mechanism.

It's a sham.

Central bankers are idiots who have walled themselves off from the general population and can't seem to find their way out of the boxed-in condition they've created for themselves.

So, we have Trump and Sanders (forget Clinton, she's a has-been, and a poor candidate who cannot win in a general election) vying to be the most powerful man in the world (don't tell Mario Draghi or Janet Yellen, though), an economy that can't produce nominal growth of more then two percent, stupid wars, uncontrollable mass migration, and a host of other problems.

But, a flat day is all good, all the time. Glad Yahoo Got the memo. They've been flat (or down) for a long time. Love ya some Marissa Mayer (Yahoo CEO). She's cute. She's smart. She's blonde. She's... no, don't go there.

She's an idiot, a poser, a fraud. Just take a look at Yahoo's performance since she became CEO. Courtiers to the company are looking at a take-under sometime late this year or early next. The $35-ish share price is a bit rich for their tastes. Something more like $18-24 may be more like it.

Flat Is In... Again!
S&P 500: 2,090.10, -0.44 (0.02%)
Dow: 17,828.29, -23.22 (0.13%)
NASDAQ: 4,901.77, +6.88 (0.14%)

Crude Oil 49.33 -0.46% Gold 1,220.00 -0.31% EUR/USD 1.1193 +0.31% 10-Yr Bond 1.82 -2.51% Corn 407.75 +0.74% Copper 2.10 -0.05% Silver 16.34 +0.52% Natural Gas 2.15 -1.51% Russell 2000 1,140.39 -0.06% VIX 13.67 -1.65% BATS 1000 20,677.17 0.00% GBP/USD 1.4665 -0.25% USD/JPY 109.7650 -0.39%

Smooth Sailing As Stocks Approach Top Of Range

It's such a sham, there's little to say other than 18,000 on the Dow approaches, a level the genii marketeers have yet been able to surpass.

The likelihood is that any rally over 18,000 will be sold off within days, if not minutes.

Tomorrow's headline will scream about the Fed raising rates, thus scaring investors. Friday, Federal Reserve Chairwoman, Janet Yellen, speaks at Harvard, which should provide what the talking heads are calling "clarity."

Harumph.

Happy Motoring!
S&P 500: 2,090.54, +14.48 (0.70%)
Dow: 17,851.51, +145.46 (0.82%)
NASDAQ: 4,894.89, +33.84 (0.70%)

Crude Oil 49.74 +2.30% Gold 1,224.20 +0.03% EUR/USD 1.1154 -0.03% 10-Yr Bond 1.87 +0.59% Corn 404.00 +1.64% Copper 2.10 +0.02% Silver 16.33 +0.42% Natural Gas 2.16 +0.75% Russell 2000 1,141.02 +0.50% VIX 13.90 -3.61% BATS 1000 20,677.17 0.00% GBP/USD 1.4701 -0.01% USD/JPY 110.2160 +0.01%

Stocks Rock, Regain 17,500+ Range

Why not?

Presented without commentary.


S&P 500: 2,076.06, +28.02 (1.37%)
Dow: 17,706.05, +213.12 (1.22%)
NASDAQ: 4,861.06, +95.27 (2.00%)

Crude Oil 49.24 +1.28% Gold 1,227.50 -0.14% EUR/USD 1.1142 +0.01% 10-Yr Bond 1.86 +1.14% Corn 398.50 +0.19% Copper 2.07 +0.05% Silver 16.24 -0.09% Natural Gas 2.14 -0.19% Russell 2000 1,135.31 +2.15% VIX 14.42 -8.85% BATS 1000 20,677.17 0.00% GBP/USD 1.4622 -0.02% USD/JPY 110.0165 +0.04%

Stocks Finish Red As Global Economic Data Exhibits Slowdown

News out of Japan, Europe and the US put a negative spin on markets to open the week.

After the Dow closed exactly at 17,500 on Friday, there was fear that a further decline below the level - which had held for more than two months (March 17 was the last time the Dow closed under 17,500) - might trigger a more precipitous decline.

However, with bad news all around, traders figured that the Fed would have enough sense to pause on a rate hike at their June meeting.

Japan experienced deep declines in both imports and exports to major trading partners such as the USA and China. It was the seventh consecutive monthly decline in exports from Japan.

Europe's Manufacturing PMI was below estimates; the US had similar results, with the lowest Markit Manufacturing PMI (50.5) since the financial crisis in 2009.

Stock traders put on a stern face, keeping the major averages in the green most of the day, but stocks slumped in he final hour of trading, with all three majors losing ground.

Now, it appears that not only is the Federal reserve intent on raising rates sooner rather than later, but it is also becoming crystal clear that the general global economy is ailing as well and may be approaching recessionary levels.

This is not exactly how the masters of the universe wanted to start the week, though they have nobody except themselves to blame for whatever erosion of the global economy and their precious stock certificates occurs in coming months.

Stormy Monday:
S&P 500: 2,048.04, -4.28 (0.21%)
Dow: 17,492.93, -8.01 (0.05%)
NASDAQ: 4,765.78, -3.78 (0.08%)

Crude Oil 48.12 -0.60% Gold 1,249.50 -0.27% EUR/USD 1.1222 +0.03% 10-Yr Bond 1.84 -0.59% Corn 397.75 +0.82% Copper 2.06 +0.02% Silver 16.41 -0.77% Natural Gas 2.06 +0.05% Russell 2000 1,111.37 -0.08% VIX 15.82 +4.08% BATS 1000 20,677.17 0.00% GBP/USD 1.4484 -0.16% USD/JPY 109.2430 -0.81%

THE FRAUD IS COMPLETE: Dow Closes Exactly At 17,500

Wowsers! Those agents of the Federal Reserve really know how to put markets in a fix of a fix of a fix.

Best to ignore them, if one knows what's good for oneself, because they are pernicious, pecuniary, petty imbeciles who share a false belief that they can control all markets.

And there's the rub. They do. They can. Governments allow them, or, rather, governments are bought and sold by them.

Current economics more resembles a Kafka-esque dystopian parallel universe or perhaps the totalitarian nightmare of George Orwell's 1984 (you'll have to look that one up for yourself, grasshopper), than orderly markets relying on simple supply and demand dictates.

It is one thing to complain. Another would be to change.

More to follow...

On the day:
S&P 500: 2,052.32, +12.28 (0.60%)
Dow: 17,500.94, +65.54 (0.38%)
NASDAQ: 4,769.56, +57.03 (1.21%)

For the Week:
Dow: -34.38 (-0.20%)
S&P 500: +5.71 (0.28%)
NASDAQ: +51.88 (1.10%)

Shocking!

Crude Oil 48.26 -0.84% Gold 1,252.40 -0.19% EUR/USD 1.1221 -0.01% 10-Yr Bond 1.8490 +0.22% Corn 393.50 +0.90% Copper 2.06 -0.29% Silver 16.53 +0.25% Natural Gas 2.06 +0.93% Russell 2000 1,112.28 +1.60% VIX 15.20 -6.92% BATS 1000 20,677.17 0.00% GBP/USD 1.4509 +0.06% USD/JPY 110.14 0.00%

End The Fed; Hawkish Tone Sends Dow Below Key Level; Gold, Silver Mercilessly Hammered

While it may seem nothing but a triviality, Money Daily has been following the most recent renge on the Dow Jones Industrial Average (DJIA) as it bounced its way between 17,500 and 18,000 since mid-March.

Today, the most widely-watched equity index in the world crossed below the lower end of that range, exclusively due to hawkish jawboning from various Federal Reserve operatives, who have spent the better part of the last seven years engaged in radical interest rate and money-creation policies, putting the entire global finacial system at risk.

To the uninformed masses - those 90-plus percent of the adult population who doesn't care or isn't bright enough to comprehend the ramifications of a global central banking system - life goes on. A debt-ridden, over-taxed population in the developed world plays giddily along as private banking interests push them one way or another. A few have escaped to off-the-grid lifestyles, some have prospered in the fiat money world of counterfeit currencies, but most are forced to take what is given, or rather, keep the small scraps the banks and governments leave on the floor after their orgy of inflation, deflation, false promises, fake data points and market mayhem and manipulation.

Thanks to the Fed and their fellow central bankers in Japan, Europe, and now China, the global population is left without price discovery mechanisms which make $30,000 cars with seven-year payment plans sound "affordable", homes which have skyrocketed in value due to artificially-low mortgage rates, fuel prices that are anything but transparent and/or stable and a general climate that continues to be counter to general principles of economy and thrift.

The Fed (and their central banker brethren) is pernicious, malevolent, deceitful, dishonest, greedy and carnivorous. They seek nothing but complete dominance without competition, a monopoly on the medium of exchange. Governments are more than willing to accept their bribery and thievery in order to retain feigned positions of power, selling out their constituents with nary a care toward the ultimate consequences of their actions.

Mandated to enact policies that promote full employment and stable prices, the Fed openly does neither, or, at best, adheres to their promises only as occasion allows, in fact promoting an inflation rate of two percent per year, which is anything but stable for prices.

So intent is the Fed on controlling every last aspect of financial activity, that they have undermined the best open markets of the world, in bonds, stocks, commodities and anything else they can get their greedy hands upon.

Markets no longer move on supply and demand or fundamental forces, but are solely and completely tethered to proclamations and idle talk of agents of the Federal Reserve, the Bank of Japan (BOJ), the People's Bank of China (PBOC), and the European Central Bank (ECB).

It's all rigged, all the time and readers are urged to do their own research into financial matters. Unless and until the fraud of banks and the agents of the Fed and other central banks are brought entirely to light there will be no financial freedom, only crony capitalism, fascist rhetoric and insane, unbalanced economic polices.

May the Farce Be With You:
S&P 500: 2,040.04, -7.59 (0.37%)
Dow: 17,435.40, -91.22 (0.52%)
NASDAQ: 4,712.53, -26.59 (0.56%)

Crude Oil 48.68 -0.20% Gold 1,255.70 -1.47% EUR/USD 1.1203 -0.12% 10-Yr Bond 1.85 -1.86% Corn 390.00 -2.38% Copper 2.07 -0.63% Silver 16.51 -3.63% Natural Gas 2.04 +1.75% Russell 2000 1,094.78 -0.74% VIX 16.33 +2.38% BATS 1000 20,677.17 0.00% GBP/USD 1.4609 +0.09% USD/JPY 109.9550 -0.20%

Fed Jawboning Flattens Stocks, Boosts Dollar, Sends Treasury Yields Soaring

Hearing all this Fed-speak, one might pine for the days of old, when central bankers were seen and not heard, when their meetings were the stuff of secrets and rituals and transparency was reserved for a type of adhesive tape.

The current roster of the federal reserve is a lineup of chattering old men and women more suited for a Sunday festival than the stuff of high finance.

Regardless of one's opinion of the federal reserve, one thing is certain: they have Wall Street on edge. With the release of the minutes from April's FOMC fiasco, the dollar surged - in the main against the yen and euro - stocks tanked back to break-even for the day and the 10-year note yield shot up like a rocket, ending the day at 1.88%, a move of nearly seven percent.

Oil and PMs fell, as planned. It's ridiculous.


S&P 500: 2,047.63, +0.42 (0.02%)
Dow: 17,526.62, -3.36 (0.02%)
NASDAQ: 4,739.12, +23.39 (0.50%)

Crude Oil 48.40 -1.20% Gold 1,259.50 -1.36% EUR/USD 1.1217 -0.84% 10-Yr Bond 1.88 +6.88% Corn 399.50 +0.63% Copper 2.06 -1.17% Silver 16.92 -1.88% Natural Gas 2.01 -2.05% Russell 2000 1,102.95 +0.48% VIX 15.95 +2.44% BATS 1000 20,677.17 0.00% GBP/USD 1.4597 +0.94% USD/JPY 110.1950 +0.96%

Markets Continue To Not Make Sense

Up yesterday, down today.

Anybody not seeing a pattern here. Today's dipsy-doodle was assigned to a couple of Fed yakkers telling the market that a June rate hike might be in play.

So, is the market calling the Fed's bluff? Or, is it the other way around?

Your guess is as good as anyone's.

Tuesday's Trauma:
S&P 500: 2,047.21, -19.45 (0.94%)
Dow: 17,529.98, -180.73 (1.02%)
NASDAQ: 4,715.73, -59.73 (1.25%)

Crude Oil 48.53 +0.46% Gold 1,281.20 +0.34% EUR/USD 1.1312 0.00% 10-Yr Bond 1.76 +0.34% Corn 397.25 +0.06% Copper 2.10 +0.31% Silver 17.30 +0.26% Natural Gas 2.05 +0.29% Russell 2000 1,097.68 -1.66% VIX 15.57 +6.06% BATS 1000 20,677.17 0.00% GBP/USD 1.4453 -0.05% USD/JPY 109.1400 0.00%

Sideways Trade Continues As Markets Respond - Like Magic - To Nothing

There was absolutely nothing upon which to base trades upon today, other than the concept that on Friday the Dow fell to the low end of the recent range (i.e., 17,500-18,000).

Therefore, it was incumbent upon market participants - meaning the Fed and their agents, particularly, Citadel - to boost asset prices to a more reasonable level in terms of keeping the charade going.

If there was any news at all that would have affected equities, it was the Empire Manufacturing Index falling nineteen points from April to -9.0 for the May reading. It's obvious that business conditions in Andrew Cuomo's fairy-tale land of the $15 minimum wage are horrible. one only has to visit upstate New York communities such as Rochester, Syracuse or Buffalo to understand the depth of despair in the business community.

Nonetheless, Wall Street is disturbingly disconnected from the reality of Main Street America and even further removed from their upstate brethren.

Carry on.

Bad Joke of the Day: Recovery!
S&P 500: 2,066.66, +20.05 (0.98%)
Dow: 17,710.71, +175.39 (1.00%)
NASDAQ: 4,775.46, +57.78 (1.22%)

Crude Oil 47.86 +0.29% Gold 1,276.70 +0.20% EUR/USD 1.1316 -0.02% 10-Yr Bond 1.7530 +2.82% Corn 392.50 -0.38% Copper 2.09 +0.17% Silver 17.21 +0.33% Natural Gas 2.04 +0.44% Russell 2000 1,116.21 +1.25% VIX 14.68 -2.39% BATS 1000 20,677.17 0.00% GBP/USD 1.4419 +0.08% USD/JPY 109.05 -0.0046%

Friday The 13th Sell-Off Nearly Breaks Through Downside Range On Dow Industrials

Yesterday, Money Daily extolled the virtues of ignoring intra-day movement on the major indices and pointed out that the last time the Dow Jones Industrial Average (DJIA) closed below the magic mark at 17,500, was nearly two months ago, on March 18 (17,481.89).

The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.

Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.

Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.

It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.

The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.

It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.

Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.

When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).

There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.

If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.

This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.

But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.

André Maginot would be impressed.

The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.

For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)

Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)

Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%