If It Isn't Already, The Stock Market Should Be Rigged

Seriously, shouldn't stocks just go higher all the time given that the central bank has everybody's backs?

Makes sense if you are invested in establishment slave-labor and tax policies that have crippled the middle class.

After Labor Day Bonanza (stocks were down early, but we can't have that):
Dow Jones Industrial Average
18,538.12, +46.16 (0.25%)

NASDAQ
5,275.91, +26.01 (0.50%)

S&P 500
2,186.48, +6.50 (0.30%)

NYSE Composite
10,891.15, +34.23 (0.32)

August Jobs Report Disappoints, Traders Euphoric

The headline says what's so weird about markets in the central banking age: Bad news is good news.

In this instance, the August non-farm payroll report delivered only 151,000 net new jobs when expectations were for 180,000.

While it wasn't a huge miss, and, the BLS NFP report is one of the most conflated, untrustworthy, fragile and ultimately revisionist data points delivered to markets every month, it still holds water with the investing class.

The point taken here is that since there seems to be not enough jobs created to keep the economy humming along at anything more than a 1-1.5% growth rate, the Federal Reserve will not have any good reason to raise rates at their next meeting, in about two-and-a-half weeks.

Halelujah! The party continues.

Friday's Free-for-all:
Dow Jones Industrial Average
18,491.96, +72.66 (0.39%)

NASDAQ
5,249.90, +22.69 (0.43%)

S&P 500
2,179.98, +9.12 (0.42%)

NYSE Composite
10,856.92, +84.99 (0.79%)

For the Week:
Dow: +96.56 (+0.52%)
NASDAQ: +30.98 (+0.59%)
S&P 500: +10.94 (+0.50%)
NYSE Comp.: +107.59 (+1.00%)

FOMC Focus: Will Stocks Change Direction After Labor Day?

Today's headline offers a provocative suggestion, though the simple answer to the question is a flat-out "NO," simply because the overtly political Federal Reserve will not - under an circumstances - raise interest rates in September.

That is almost so widely accepted within the financial community as to make it nearly a fact, a fait accompli, a gospel truth.

There are any number of reasons why the FOMC will not raise the federal funds rate even one basis point at their upcoming meeting on September 20 and 21, not the least of which is the assumption that such a rash move would derail the presidential bid by the status quo candidate, the fair-haired-soon-to-be-liar-in-chief, Hillary Clinton.

Naturally, that's a one-sided argument which has nothing to do with economics, but the Fed has other issues behind their upcoming decision to stand pat on rates for the foreseeable future.

Among these issues are the ongoing candidacy of Mr. Donald J. Trump, who is seen as anathema to anything and everything establishment, and that means the Fed itself. A Trump victory in November would almost certainly foment much in the way of chaos, including a pre-emptive attack from the Fed itself, sensing an almost perfect opening to raise rates and crash the market, maybe even do away with the entire post-Bretton Woods arrangement via a wholesale financial collapse.

That might be fun, but the projections fro the US economy going forward are not, have not been for some time and will not be. That's the main reason the Fed is stuck at the near-zero bound, because not only the US economy, but that of almost all developed nations are not growing. Rather, they are growling with intense citizen upset, declining labor utilization rates and a demographic wall that current policies can and will never scale.

The Fed is boxed in, as are all central banks. They can't do anything except buy up more overpriced assets even though that effort has failed to produce their highly-anticipated inflation and associated growth. One might say that all the central bank coddling of the system has produced is a massive over-supply of everything and a deflationary vortex that challenges their Keynesian orthodoxy.

The Fed - unless Hillary Clinton is elected president, and even that's no clincher - is toast.

Thursday's Results:
Dow Jones Industrial Average
18,419.30, +18.42 (0.10)

NASDAQ
5,227.21, 13.99 (0.27%)

S&P 500
2,170.86, -0.09 (0.00%)
^NYA

NYSE Composite
10,771.91, +7.16 (0.07%)

Stocks Give Back On Tuesday After Explosive Market Monday

Following Monday's ramp-alooza based on absolutely nothing other than consumer spending hitting its target, stocks lost ground on Tuesday heading into the Labor Day holiday weekend.

Since this is absolutely the slowest week of the year for everybody except maybe vacation rentals, don't look for any kind of major move in either direction prior to next Tuesday.

A week of nothing, otherwise known as the pain trade. There should be some profit-taking and squaring down on risky positions, but, again, nothing overtly dramatic.

Everything has absolutely flattened out, except possibly the $/Yen pair, back up to 103 on the day.

Tuesday's Trauma:
Dow Jones Industrial Average
18,454.30, -48.69 (-0.26%)

NASDAQ
5,222.99, -9.34 (-0.18%)

S&P 500
2,176.12, -4.26 (-0.20%)

NYSE Composite
10,797.10, -14.24 (-0.13%)

Yellen Speaks, Markets More Confused After Comments By Fisher, Bullard, Lockhart

After a week-long wait for something of substance from Fed Chair Janet Yellen in her widely-anticipated speech at Jackson Hole Friday, markets were somewhat disappointed when what they got from the aging, dowdy Fed Chairwoman was more of the same, a garbled, directionless mumbling about a strengthening US economy and plenty of buts, ahs, and well maybes.

Yellen seemed to express that a rate hike was on the table in September - just as it was in February, June and July - but offered certain caveats, not the least of which was that unexpected events could derail any plans the Fed might have considered.

Adding to the dismay and confusion were three separate comments by Fed officials in the immediate aftermath of Yellen's speech.

Vice Chairman, Stanley Fischer first spoke up with a weak affirmation that a rate hike in September was possible, but quickly afterward, Atlanta president, Dennis Lockhart, and St. Louis president James Bullard offered a different view, questioning the wisdom of a rate hike in September or even December.

Since markets have been on a razor's edge since Brexit and will be until the presidential election in November, it does seem a stretch that the Fed would risk a market collapse triggered by a rate hike, such as what happened after their last 1/4 basis point increase last December.

The Fed being less stoic and more political than ever, risking injury to Hillary Clinton's election - the choice of the status quo - would be foolhardy and dangerous.

Not to say that the Fed is not both of those, but when there's a real risk that an outsider - Donald J. Trump - could ascend to the highest office in the land, the Fed will be watching its own best interests, which would imply that a federal funds rate increase in September is certainly a no-go.

Now that the Fed has wasted the better part of a month and delivered nearly nothing of substance, one wonders what they can do for an encore. Oh, that's right. Eight years of loose, experimental monetary policy and promises of more to come.

What fun.

Friday's Closing Data:
Dow Jones Industrial Average
18,395.40, -53.01 (-0.29%)

NASDAQ
5,218.92, +6.71 (0.13%)

S&P 500
2,169.04, -3.43 (-0.16%)

NYSE Composite
10,749.33, -35.04 (-0.32%)

For the Week:
Dow 30: -157.17 (-0.85%)
S&P 500: -14.83 (0.68%)
NASDAQ: -19.46 (-0.37%)
NYSE Composite: -79.83 (-0.74%)

Continued Sluggishness In Equity Markets Awaiting Janet Yellen At Jackson Hole

Investors (if that's what they're being called these days) are largely on hold in advance of Fed Chair Janet Yellen's speech at Jackson Hole tomorrow and a return to what passes for normal conditions following the Labor Day holiday.

Essentially, stocks have been treading water for the past month, since setting new all-time highs mid-July and making a double top earlier this month.

For whatever it's worth, the one bid by the Fed and its central bank allies has produced a very dull market, if that's what we're calling it these days.

Of particular note is the current odds for a rate hike in September, currently hovering around 18%. For a December rate hike, it's basically a 50-50 proposition, though neither is actually very likely considering the fragility of the global economy.

Thursday's Closing Prices:
Dow Jones Industrial Average
18,448.41, -33.07 (-0.18%)

NASDAQ Composite
5,212.20, -5.49 (-0.11%)

S&P 500
2,172.47, -2.97 (-0.14%)

NYSE Composite
10,780.23, -10.95 (-0.10%)

Stocks Stuck Until Labor Day

Editor's Note: Very rough schedule this and next week, so there may not be the usual market banter. For now, stocks seem stuck until after Labor Day. Of course, any big news will be reported upon. Enjoy the summer weather!

Nothing to write home about today, as stocks ramped early in the session and sold off the rest of the day. Sluggish is an appropriate way to call it.

Tuesday's Travails:
Dow Jones Industrial Average
18,547.30, +17.88 (0.10%)

S&P 500
2,186.90, +4.26 (0.20%)

NASDAQ
5,260.08, +15.47 (0.30%)

NYSE Composite
10,847.49, +31.57 (0.29%)

Slow Week For Stocks Ends With Losses

Despite various new highs, stocks traded in a very tight range over the course of the week.

Not surprisingly, August is the most popular time for vacations, not exclusive of stock brokers, traders, managers and all those who participate in making the markets.

Friday's trading was particularly sluggish, with all the major averages finishing in the red, albeit, slightly.

The weekly figures were hardly encouraging to either bears or bulls, with the main indices offering losses or gains of fractions of one percentage point, the S&P the least affected, down 0.18 points.

Leading into the final full week of August trading, with monthly options already having expired (Friday), another week of widespread complacency is expected.

Figures for Friday:
Dow Jones Industrial Average
18,552.57, -45.13 (-0.24%)

NASDAQ
5,238.38, -1.77 (-0.03%)

S&P 500
2,183.87, -3.15 (-0.14%)

NYSE Composite
10,829.15, -33.86 (-0.31%)

For the Week:
Dow: -23.90 (-0.13%)
S&P 500: -0.18 (-0.01%)
NASDAQ: +5.48 (0.10%)
NYSE Composite: +6.74 (0.06%)

Stocks Flail About As Investors Ponder September Rate Hike False Flag

Pretty ugly. The Dow round-tripped about 120 points, ending the session slightly on the positive side.

Fed minutes were released at 2:00 pm EDT, and offered little insight. The word is that they're going to raise rates in September.

Nonsense. They've already seen what a rate hike did to stocks the last time. They're not going to take that chance, unless they want to see Hillary lose the election come November.

Today was all about flailing about in an overpriced environment.

Wednesday's Wash:
Dow Jones Industrial Average
18,573.94, +21.92 (0.12%)

NASDAQ
5,228.66, +1.55 (0.03%)

S&P 500
2,182.22, +4.07 (0.19%)

NYSE Composite
10,824.40, +14.66 (0.14%)

Fed's John Williams Strikes The Alarm Bell; Markets, Economists Respond With Aburptness, Gibberish

President and CEO of the San Francisco Federal Reserve Bank, John Williams, released a white paper on Monday that caught the attention of just about everybody even tangentially aligned with economics or finance called Monetary Policy in a Low R-star World.

Williams, who was Janet Yellen's chief researcher when she was head of the San Fran Fed, has, with the release of this paper, struck the alarm bell with an enormous policy mallet. In effect, he's telling the world that the central banks of the world - including our own, all-powerful Fed - that the past seven years of low interest or zero interest rates have not produced the desired results, which would be a robust economic climate coupled with adequate inflation.

What the Fed and other central banks consider adequate inflation is something of a mythical, though essential, concept in Keynesian economics. Central bankers talk of a target inflation rate, figuring that two percent is about the right level to keep GDP and the associated debt burden growing.

In essence, the concept that any level of inflation is good for anybody other than central bankers is complete and absolute buffoonery, designed only to perpetuate the counterfeit of fractional reserve banking and fiat money. It should be pointed out that true inflation is always and everywhere a monetary phenomenon, strictly defined as an increase in the money supply, that being debt in every case involving fiat money. What Williams is talking about is price inflation, an entirely different animal. A price inflation rate of two percent, over any expanse of time, be it 10, 20 or 50 years, does nothing but erode the value of the currency, increasing the price of everything and impoverishing the citizenry coerced into using said currency.

It's horribly bad policy for the bulk of the population, enriching the banks, distorting the natural business cycle and inducing government spending beyond its means, causing deficits and eventually, unpayable, unservicable debt burdens, the exact condition the entire global economy finds itself in today.

Williams chooses to blame all of the central bank policy errors on an amorphous concept known as the natural rate of interest, or R*, or R-star. The conceit of his missive is where he states, "While a central bank sets its short-term interest rate, r-star is a function of the economy that is beyond its influence."

In other words, Williams is conceding that the natural flow of economics is something a central bank cannot control, manipulate, massage, or otherwise rig. It's utter nonsense. The reason the mythical R-star is so low is because central banks worldwide have been dropping key interest rates to previously-unforeseen levels, in many cases (notably the BOJ and SNB) instituting negative interest rates. Central banks have caused the massive global economic problems and Williams' propose solutions indicate that the central bank models are broken beyond repair and that their only tools remaining are empty rhetoric and finger-pointing, obviously ill-suited to stave off recessions or induce growth and prosperity.

Williams wags his finger at governments, proposing that fiscal measures be taken to combat low inflation (eventually outright deflation) with more insanity such as targeting GDP or using some kind of sliding scale of taxation based on centrally-planned, goal-sought data points such as inflation and/or unemployment.

It this were a football game, Williams could be accused of punting on second down from his own goal line. He's given up, as he - and his central bank brethren - should have eight years ago at the height of the Great Financial Crisis (GFC), allowing the market to clear out the malinvestments, cripple the broken, over-leveraged banks and allow the economy to recover on its own terms, without the aid of central bank intervention. The associated pain might have been immense, but it would have been contained and recovery would have been swift.

Instead, Williams and the central bankers of the world have brought the global economy to the brink of a mammoth financial crisis, one in which entire nations' economies will be completely torn asunder. Williams and his friends have given us the most extreme policy initiatives the world has ever seen (ZIRP, NIRP, QE) and saddled governments, businesses and individuals with outrageous debt loads.

If ever the world has been at the cusp of a debt jubilee, this is it. The central banks have failed even themselves and their clandestine shareholders and its time they be relegated to the dustbin of history, along with other failed ideologies.

A return to gold and silver as base capital in a demand economy, various barter exchanges and fixed exchange rates in foreign currencies would be far better solutions than what Williams has proposed and eminently superior to the devilish constructs of the IMF, World Bank, the European Union, futures, derivatives, federal mandates, and other complexities of modern economics.

At the end of error-prone regimes, be they in finance or governance, wild, weird, unwieldy ideas will be promulgated by supposed "experts." Williams' institutional heresy is only the beginning of the coming madness. Expect even more desperate distortions and departures from reality from the very people who created the economic mess. They're uniquely positioned to cause nothing less than global economic, political and societal calamity.

Good luck.

*************

The market response to San Fran Fed's Williams' policy punt has been swift and poignant. In Japan, the Nikkei fell 273 points. European markets were lower across the board, with the Dax, FTSE and France's CAC-40 each losing ground. US stocks opened lower and remained in the red through the session.

It worth noting that this is still August and most of Wall Street's heaviest hitters are still stupefied by drugs and booze out at their Hampton retreats. US markets hit all-time highs in recent days, akin to ringing a bell at the tippy-top of the market. Values are extreme and detached from fundamentals. The dollar was whacked and will likely continue to decline, and, as just about the only barely viable economy and bond market, US treasuries are about to head further toward zero and negative rates. The world is upside down, ripe for complete overhaul. What many have been predicting and anxiously awaiting for the past seven or eight years may finally be upon us.

Of course, to offset the negative effects of Williams' paper, NY Fed head, Bill Dudley trotted out a statement just prior to US markets opening, saying, in effect, that a September rate hike by the Fed is under consideration. There you have it: more jaw-boning and utter nonsense designed to alter perception. To say that the Fed is close to another rate hike is tantamount to thinking that the moon is about to tumble into the earth.

Gold and silver were each up sharply overnight and in early morning trading on the COMEX. Precisely at 8:00 am EDT, both were hammered lower, yet another signal that central bankers are desperate and nearly delusional.

Be prepared.

US Markets at 3:00 pm EDT (prior to close due to scheduling conflict)
Dow Jones Industrial Average
18,583.22, -52.83 (-0.28%)

NASDAQ
5,237.45, -24.56 (-0.47%)

S&P 500
2,182.27, -7.88 (-0.36%)

NYSE Composite
10,825.95, -32.54 (-0.30%)

Mid-August Monday; Who Cares? More All-Time Highs

Your editor has been feverishly putting together a couple of boffo posts for later this week... maybe next week, so today is just a place-holder for markets which continue to set new all-time highs.

Yippie! Life can't get any better than this, can it?

Here's to hoping that previous statement isn't true, because there's a sneaking suspicion that, with $13.4 trillion worth of negative-yielding bonds now infecting the global investment landscape, somethng really, really bad is going to pop and there won't be any upside, for anybody.

So, keep wishing.

Monday Muddle:
Dow Jones Industrial Average
18,636.05, +59.58 (0.32%)

NASDAQ
5,262.02, +29.12 (0.56%)

S&P 500
2,190.15, +6.10 (0.28%)

NYSE Composite
10,858.50, +36.08 (0.33)

Stock Market Losses Will Not Be Tolerated

In a world which is prodded, directed, managed, and ultimately controlled by central banks and government authoritarians, the narrative is often more important than the reality of life under the thumb.

A case in point comes today - a day after the NASDAQ, S&P 500, Dow Industrial Average each set new all-time highs - in which actual economic data diverged from the preferred narrative of "everything is peachy-keen."

Two important data sets were released prior to the opening of US equity markets, July PPI and July retail sales. Both were disappointing.

PPI came in at -0.4% and retail sales posted a sluggish 0.0% (zero) growth, with the core - ex-autos - down 0.3%. These figures not only suggest deflation, but are actually indicative of a deflationary environment, the sole condition which can awaken central bankers from sound sleep in cold sweats and is, at the same time, a relief for cash-strapped, income-stagnant workers and consumers.

According to the book of central bank policy, should one actually exist, the wants and needs of the average working Jane or Joe is to be disregarded in such an instance, preference given to fat-cat Wall Street types who do no work, produce nothing of value, but rake in billions of dollars in fees, profits, and commissions for their trading activities in the stock market casino.

So it came to be that since stocks had just made all-time highs, a major setback could not and would not be tolerated. The major indices slumped most of the session, but were boosted higher going into the close, with losses trimmed on the Dow and S&P, the NASDAQ actually closing positive, as deemed appropriate by the masters of the the universe.

The rigging of markets is never going to work out long term. Massive mis-allocation of capital has been taking place since the last financial crisis, setting the global economy up for a colossal, catastrophic, cataclysmic collapse. Maybe it won't be as bad as our alliterative case suggests, if only because ordinary people have had time to adjust and prepare, but, for anyone owning stocks at current altitudes, losses are nearly a certainty. That is, unless the entire world remains in a state of suspended animation, normalcy bias, and cognitive dissonance, and the wild-eyed central bankers of the world are allowed to continue their insane policies of negative interest rates, naked purchasing of equities (already a de facto policy of the BOJ and ECB, still a clandestine operation by the US Fed), stimulus, and maybe, if we're really lucky, helicopter money.

The week ended well for the titans of Wall Street. Have a (few, lots of, keg of) beers, enjoy the weekend, and sleep on it.

Friday's Figures:
Dow Jones Industrial Average
18,576.47, -37.05 (-0.20%)

NASDAQ
5,232.89, +4.50 (0.09%)

S&P 500
2,184.05, -1.74 (-0.08%)

NYSE Composite
10,820.79, -15.26 (-0.14%)

The weekly figures weren't all that impressive, though the NASDAQ recorded its seventh consecutive weekly gain.

For the Week:
Dow: +32.94 (+0.18%)
NASDAQ: +11.77 (+0.23%)
S&P 500: +1.18 (+0.05%)
NYSE Comp.: +37.92 (+0.35%)

S&P Rocks To Hew All-Time Highs; Oil Ramps Higher

So much for the doldrums of August.

Stocks soared to some of their highest levels ever, with the S&P 500 index closing at an all-time-high, achieving a new intra-day high (2,188.45) in the process.

There was little in the way of financial data to support the sudden spurt higher, so let it just be said that it was a decidedly rick-on session.

Macy's announced reasonably good quarterly results and pledged to close 100 stores. The stock soared by more than 17% on the day. It's getting so insane on Wall Street that even an expected earnings beat is cause for a massive uptick in share price.

S&P stocks are trading at a trailing P/E of roughly 25, approximately a 65% premium over traditional fair value.

This is truly a market only for the brave, the knave, or the naive.

Thursday's Closing Quotes:
Dow Jones Industrial Average
18,613.52, +117.86 (0.64%)

NASDAQ
5,228.40, +23.81 (0.46%)

S&P 500
2,185.79, +10.30 (0.47%)

NYSE Composite
10,843.10, +68.12 (0.63%)

The Most Dangerous Market Of Your Lifetime

Investors in equities - those imaginary certificates that signify ownership of a portion of a company or corporation - are giddy.

Stocks are near all-time highs with prosperity and class envy writ large on every tick higher.

Sure enough, these investors are shrewd operators of finance and business, many having earned their degrees from the highest academic schools in the world, the diplomas proudly displayed on the walls of their hedge fund offices and trading areas.

So, why would they possibly be worried about anything, particularly, the value of their holdings?

Simply put, there just aren't enough of them partaking at the font of wealth pouring out of Wall Street. Making matters more complicated and distressed is that the executives of the companies in which their wealth is concentrated have been buying back their shares at an unprecedented rate, making the shares of stock available smaller and smaller, but also boosting the price of those available, traded shares.

It's an easy supply and demand formula: fewer shares available makes them more valuable. In effect, if companies are inclined to take back their shares at inflated prices (a de-issuance, if you will), those remaining shares have to represent the entire value of the company.

Thus, a company could theoretically buy back all the shares but one, leaving that one share of stock to account for the full value of the company. In the case of an Apple or Google or any of the thousands of billion-dollar market cap companies, that one share would be "valued" at some absurd number, like $285 billion.

In such a hypothetical case, the problem arises when the owner of that $285 billion share of stock wished to unload it, convert it to cash or some other assets. Who would be the buyer? And would they actually pay the offered price (the ask) in such an illiquid market?

Obviously, the seller of that massive share of stock might have to offer a discount, and a big one. Instead of $285 billion, the seller might be forced to accept $140 billion, or less, in event of a liquidity crisis, which, incidentally, is what stock buybacks are creating. Since there hasn't been adequate demand for shares since the financial crisis of 2008-09, companies have resorted to buybacks just to keep their companies afloat, many of them becoming less and less profitable over time, making the price of their stock even more ridiculously valued.

When the rush for the exits begins in earnest, the big-time hedgies and fund managers will be bidding directly against each other, each with the same goal, to dump corporate paper assets in exchange for something more sturdy, ostensibly government bonds or hard, cold cash.

The markdowns, margin calls and defaults will be spectacular and this market, this unsustainable fantasy created by zero and negative interest rates, central bank stimulus, and government dumbness and numbness will be exposed to real supply and demand economics in a swan song for greed, manipulation, and wealth concentration.

That this will occur is unmistakable. Everything does not go up in price all the time, forever. The business cycle has not been abolished, neither here in the US, nor in Japan, China, the Eurozone or anywhere else.

Central banks are currently backstopping the entire Ponzi scheme of the stock market with interest rate swaps, repos, direct investment, and options manipulation.

It can't continue forever, though it can continue for a long time. It's a deadly and dangerous game, putting at risk the entire economy of the planet, or, at least that portion of the planet that wants to play along.

Increasingly, the as the musical chairs are being removed one by one, players are opting out and moving elsewhere. Largely, the lower and middle classes aren't playing at all. They're invested in necessities, cash, maybe collectibles, precious metals, and real estate.

Eventually, the sheer volume of trade by the 99% not in the stock market and incensed by government policies which seek to impoverish them further, will outweigh the phony prices for stocks listed on the NYSE and NASDAQ.

The stock market will suffer a severe breakdown at some point. The trick is not to know when that breakdown will occur, but to continue to prepare for its inevitability.

Most will not be prepared. Those who have prepared may or may not proper at the expense of everyone else, because the chaos - political, economic, social - will be astonishing.

The Boy Scouts of America issued their motto many years ago and it applies today: Be Prepared.

Be a Boy Scout.

Wednesday's Washout:
Dow Jones Industrial Average
18,495.66, -37.39 (-0.20%)

NASDAQ
5,204.58, -20.90 (-0.40%)

S&P 500
2,175.49, -6.25 (-0.29%)

NYSE Composite
10,774.98, -29.53 (-0.27%)

Stocks Ramp, Then Cramp In Late Selling

Looks like the consolidation continues. Anybody buying at these levels must be extremely selective or terminally insane.

The Day's Tally:
Dow Jones Industrial Average
18,533.05, +3.76 (0.02%)

NASDAQ
5,225.48, +12.34 (0.24%)

S&P 500
2,181.74, +0.85 (0.04%)

NYSE Composite
10,804.51, +16.50 (0.15%)

That's two slow trading days in a row. Get used to it unless there's some unseen catalyst developing to upset the slow moving wagon train of declining profits and higher prices.

Not a pretty sight (unless you're a central banker).

Stocks Flat As Dog Days Drag

Considering the huge push Hillary Clinton got from the pollsters and media over the past week, it's a wonder the stock market wasn't off to the races come Monday morning.

Instead, stocks were marginally higher at the opening bell, but spent most of the session in the red. Since stocks are trading at or near all-time highs on the major averages, perhaps this wait-and-see action was the best approach.

Volatility was very low, with stocks trading in very tight ranges. The outlier was oil, as WTI crude ramped up more than a dollar, to $42.87, though this mini-bounce is not likely to be taken seriously or signal another run-up to $50 per barrel or higher. Oil's global glut is real and serious. Only a highly structured and skeptical futures market is keeping crude from collapsing to below $30 per barrel. For now, drivers are getting the benefit of lower gas prices, a condition which used to be associated with a burgeoning economy.

Oddly enough, because of excess debt in the system, stagnation with low inflation is about the best this economy can do. For the most part, individuals are doing better than they have the past few years, but high taxes and the rising cost of healthcare have put the brakes on personal spending.

Dow Jones Industrial Average
18,529.29, -14.24 (-0.08%)

NASDAQ
5,213.14, -7.98 (-0.15%)

S&P 500
2,180.89, -1.98 (-0.09%)

NYSE Composite
10,788.01, 5.14 (0.05%)

Stocks Gallop Ahead On July Jobs Boost

While the consensus estimate was for July Non-Farm Payrolls to show a gain of 160,000, the BLS (aka Bureau of Lies and Salaciousness) blew away the number, showing the US economy grew by 255,000 jobs in the usually dolorous month of July. The unemployment rate remained unchanged at 4.9%.

That number sent the dollar screeching higher and stocks rocketing back toward or beyond (S&P 500) all-time highs.

The Dow Jones Industrial Average was up more than one percent, along with the NASDAQ, no doubt buoyed by the sensational jobs report and the trouncing Hillary Clinton was giving to Donald Trump in the majority of the latest polls. The elite status quo has their agenda in hand; Wall Street obviously a willing partner.

All major averages finished with modest gains for the week (with the exception of the NYSE Composite), despite the idea that a better economy - one that, say, produces 250,000+ jobs per month - might give the Federal Reserve cause to raise rates. For now, however, good news is good news.

On The Day:
Dow Jones Industrial Average
18,543.53, +191.48 (1.04%)

NASDAQ
5,221.12, +54.87 (1.06%)

S&P 500
2,182.87, +18.62 (0.86%)

NYSE Composite
10,781.78, +75.74 (+0.71%)

For the Week:
Dow: +111.29, (+0.60%)
S&P 500: +9.27 (+0.43%)
NASDAQ: +58.99 (+1.14%)
NYA: -2.65 (-0.02)

Stocks Drag Trhough Thursday Session; Oil Bounces

Sluggish would be a compliment to the manner of trading that took place on Thursday, with the major indices scratching out meager gains, with the exception of the Dow 30, which took it slightly on the chin but avoided a knockout blow.

Market participants are unaware of what to do without some form of guidance by or from the Fed or other central bankers. It's almost as though markets are locked up with nowhere to go, which actually might be the case as the slog through August continues.

If there was any bright spot for the markets it was in the oil patch, where WTI crude rallied off a low spot at $40 per barrel a few days ago and now sits closer to $42. It isn't much of a move, but nervous oil specs will take any gains they can get at this juncture. With crude spilling out of every known production facility at near record pace, the glut has only worsened over the summer as demand has not exactly been robust.

The price of crude - if not for material intervention by players of significant size - should be hovering closer to $30 than $40. Crude has fallen into a bear market, more than 20% off the recent artificial high of $50 per barrel, which didn't last for more than a nanosecond.

A serious sell-off in crude over the next few weeks or into October could be the catalyst for more selling of equities and another dip in the stock markets, though the power of the Fed and other central banks to prevent anything even resembling a correction before the November presidential election cannot be underestimated.

Dow Jones Industrial Average
18,352.05, -2.95 (-0.02%)

NASDAQ
5,166.25, +6.51 (0.13%)

S&P 500
2,164.25, +0.46 (0.02%)

NYSE Composite
10,707.13, +11.99 (0.11%)

Dow Ends 7-Day Losing Streak, But Who's Watching The Transports And NYSE Composite?

Markets can seem exuberant, sometimes, even over-exuberant, as has lately been the case, without reason.

The current environment is one of those times by which market movements cannot be rationally explained, or as the Maestro himself - former Fed Chairman, Alan Greenspan - so aptly put it, the markets seem to be suffering from irrational exuberance.

This needs to be pointed out in the current context of manipulation and high-stakes politics between the Nah! Brexit vote and the very real threat that Donald Trump might somehow wrangle himself into the Oval Office come November... to the absolute terror of the elite status quo, including everyone from Warren Buffet to Mark Cuban to Janet Yellen and just about every member of congress and Wall Street hedge fund slickster.

Money Daily has recently been pointing out that the any positive developments by Mr. Trump are and have been met with scurrying, rat-like selling of shares on the equity markets by those with very thin, lizard-like skins, probably your average congressional insider and self-important hedge fund managers.

On the other side of the coin, there's the relentless marauding of the Fed, the central bank which is prohibited from buying or selling of equities (unlike the Bank of Japan, which is now a top 10 holder of 90% of the stocks listed on the NIKKEI 225), but which has ample resources by which to funnel money into stocks via proxies such as Goldman Sachs, JP Morgan Chase, and Merrill Lynch, the investment arm of Bank of America, or even the Bank of Japan, which, having run out of luck in the Nikkei, is probably more than willing to buy US stocks.

It's a safe bet that the Fed and their cronies halted and reversed the post-Brexit decline, sending the Dow and S&P 500 to all-time highs via options trading and positions on the VIX, the volatility index, widely parlayed by those in the hedging business.

In fact, days before the Brexit vote, heads of the Swiss, Canadian, US and Japanese central banks were already in collusion to overcome any nasty "turbulence" in the markets, as openly reported by none other than Bloomberg.

So, it shouldn't come as any stretch of the imagination that the same types who distort presidential polls and have the mainstream media wrapped around their little fingers should also keep stocks artificially high as long as it appears that Hillary Clinton will be elected president come November 8.

Once stocks got to extreme levels, a bell went off in the heads of the big traders, telling them to take profits, resulting in a seven-day sell-off (otherwise known as consolidation), culminating in Tuesday's near-100-point decline on the Dow.

Wednesday, the Dow just barely hung on for a small gain, as did the other indices, however, the recent highs achieved by the Dow can be seen as absolute phonies, when referenced to the Dow Jones Transportation Average (DJTA), which sold-off and rebounded like other indexes post-Brexit, but did not attain new all-time highs (for the record, neither did the NASDAQ, nor the NYSE Composite, the broadest index of US stocks).

The Transports had a good run of it, topping out at 8048.09, but were 100 points shy of the all-time record, set back in April, 2015, at 8149.00.

The same is true on the NYSE Composite (NYA), which topped out recently at 10815.43, a far cry from May 2015, when the index stood proudly at 11254.87.

Taking away from this divergence in major markets is the idea that central banks and their friends can only influence so much. They often (make that, ALWAYS) leave bits and pieces of evidence of foul play scattered about. 100 or so points on the Transportation Average and over 400 points on the Composite shows just how sloppy and misguided their adventures into manipulation of not just stocks, but perceptions, have become.

Everybody watches the Dow and S&P. The transports and composite indices, not so much, or so they believe.

Dow Jones Industrial Average
18,355.00, +41.23 (0.23%)

NASDAQ
5,159.74, +22.00 (0.43%)

S&P 500
2,163.79, +6.76 (0.31%)

NYSE Composite
10,695.14, +34.01 (0.32%)

Tough Times For People Are Beginning To Appear

See-saw trading marked the first day of August, traditionally one of the quietest times for traders, so excuse your author for not offering a great deal of commentary as the "dog days" wear on through the hot month.

Stocks were up and down without direction. Japan's fiscal stimulus, largely expected to consist of some form of "helicopter money" (i.e., central bank largess via government spending and/or handouts), and, while there were some measures designed to prop up the poor and stimulate spending, it's more likely that - like everything else the BOJ has attempted the past 25 years - the plan will backfire because Japanese people are more concerned with squirreling away cash for rainy days than spending to keep the government promise of prosperity and growth.

It's the same all over the world. Governments and central banks have themselves painted into a not-so-agreeable corner, flanked by negative interest rates on one side, stagnant growth prospects on another, and a phalanx of QE, ficsal irresponsibility, crony capitalism, global income insecurity, and political instability dropping from the ceiling and oozing up through cracks in the floor.

While the political and business hoi poloi continue preaching the narrative of rosy economic successes, the average people have had enough of being lied to, cajoled and insulted by appeals by the financial authorities to their better interests, which, in truth are in nobody's good interest.

A couple of possible scenarios might emerge from the continuing diddling by the Fed and their crony central banker kin. One is that extreme lawlessness reigns, as laws are multiplied beyond the system's ability to prosecute them, or, political forces morph into ugly totalitarianism.

A good bet might be a hedge between the two, as both are already emerging in various forms, everywhere from dictatorships like the one evolving in Turkey, right down to the tin-horn generals at local levels who attempt to enforce zoning and municipal codes on wary citizens.

If there appears to be unease in every neighborhood, it's because below a calm surface is a boiling pot of anger, resentment, fear, and distrust.

Dow Jones Industrial Average
18,404.51, -27.73 (-0.15%)

NASDAQ
5,184.20, +22.06 (0.43%)

S&P 500
2,170.84, -2.76 (-0.13%)

NYSE Composite
10,730.20, -55.31 (-0.51%)

As Hope For Hillary Fades, So Will Prices of Stocks

Another listless day was had on the equity exchanges, as stocks slipped in early (rigged) trading, then magically gained ground all day, with the Dow ending in the red while the NASDAQ and S&P posted incremental gains.

Oil continued to slip further away from recent, month-ago highs of $50 per barrel, closing in NY just above $41/barrel, roughly a 20% decline in a very short time. Drivers should begin to see the effects at the gas pump, as soon as higher-priced inventories are extinguished. Expect gas prices to fall back to levels seen in early Spring. Many areas in the Midwest and South are already seeing prices below $2.00 per gallon, a level seen as a panacea for economy.

The highest prices in the country are undeniably in the West, especially California, where high taxes and regulations push the price of fuel far beyond its production and profit price. Once again, we have our beneficent government to thank for wasting our money.

Winding down tonight is the Democratic National Convention, where Hillary Clinton will accept her party's nomination for president of the United States, along with running mate Tim Kaine, whose speech on Wednesday night is being criticized as being dull and boring.

More and more, it appears that the national mood is not pleasant, a boon to the campaign of Republican Donald Trump, who advocates for change.

Expect more slippage in stock prices as the elite begins to realize that their days in power may truly be numbered. Clinton is a miserable candidate, and, while Trump is no darling of the right, he is at least forthright and hopeful.

Clinton isn't getting any bump in the polls through the convention, which is usually the case. That's a bad omen for the status quo and the left.

Dow Jones Industrial Average
18,456.35, -15.82 (-0.09%)

NASDAQ
5,154.98, +15.17 (0.30%)

S&P 500
2,170.06, +3.48 (0.16%)

NYSE Composite
10,744.16, +4.40 (0.04%)

FOMC Laughably On Hold; Gold, Silver Take Off

Market conditions are becoming strained, as evidenced by the flatness of the past two sessions, each directly related to the two-day FOMC meeting concluded this afternoon.

As expected, the FOMC did nothing, save for bloviating on about macro economic conditions, hinting that they would be on track to raise interest rates to more "normal" levels at some point in the future, depending on the data they receive.

What the Fed, via their rate-setting governors at the FOMC is effectively saying is nothing, but if one watches markets closely enough and listens carefully, here's the real message:

The Fed is not going to raise interest rates to anything even approaching normal - that is, possibly a federal funds rate (overnight) of 2 1/2 to 3 percent, a prime rate of 6 percent and a deposit rate of savings accounts of 4 to 6 percent - at any time in the next four to seven years, unless things get really out of hand, like you worthless peasants and debt slaves rise up and actually elect that uncouth slob, Donald Trump, as president, continue to grow cryto markets like bitcoin and Steem, take your money out of banks and stat paying down debt, paying for things in cash, or, heaven forbid, barter amongst yourselves.

They get it at the Fed. All they're interested in is maintaining the status quo, meaning, you go to work for feeble wages, while they and their cronies sit on their fat rumps and collect huge checks for appearing to be in control of the economic situation.

They're not in control unless the people allow them to be. Once the people lose faith - confidence - in the fiat money system, they're toast.

Another few signs that the wheels have come off the global debt Ponzi scheme were the gains in gold and silver on the day, in two separate ramps, first, at the market open (9:30 am EDT) and at the rate policy announcement (2:00 pm EDT). Silver and gold reached levels last seen during the Brexit bounce, with Gold hitting $1340.00 the ounce and silver on fire to nearly $20.40, gaining more than 80 cents on the day.

The financial, political and social fabric are becoming increasingly intertwined and fraying at the same time. Along with grabbing up sole gold, silver, lead, brass, and bottled water, canned goods are also a cheap option for securing one's future, and also quite edible, something that can't be said of nearly any other asset class.

The Wednesday Effect:
Dow Jones Industrial Average
18,472.17, -1.58 (-0.01%)

NASDAQ
5,139.81, +29.76 (0.58%)

S&P 500
2,166.58, -2.60 (-0.12%)

NYSE Composite
10,739.58, -33.41 (-0.31%)

All Quiet On The FOMC Front; Meanwhile, Rancor At The DNC

With the chance of a rate hike hovering between absolutely not and no chance at the two-day July meeting (today and Wednesday) stocks took something of a breather, finishing in mixed fashion and anticipating no rate movement from the FOMC, which will release its policy decision at 2:00 pm EDT tomorrow.

There was a sudden drop in equities across the board early in the day on Tuesday, sending the major indices into negative territory, a place they spent most of the remainder of the session.

Oil continued its relentless decline off ridiculously high levels reached last month. While today's drop was less than one percent, the price of WTI crude for September 2016 delivery fell to a three-month low as gasoline demand in the US and most other developed nations remains stubbornly low. The last traded price was in the $42.82 per barrel range.

The global glut in crude oil will continue into the foreseeable future, as production from OPEC nations continues at near capacity and US rig counts continue to creep slowly upward.

Precious metals posted small gains, but remain off their recent highs. This appears to be a time of price consolidation prior to the next leg upward, the four-year bear market now clearly in the rear view mirror and fading from view.

Besides the FOMC meeting, focus is clearly on the political front, as the Democratic National Convention enters the second of its four-day schedule. Much of the rancor over the leaked emails has subsided, though delegates and supporters of Bernie Sanders - the runner-up to Hillary Clinton in the primaries - continue to protest and clamor for their candidate.

Tonight's main event is the delegate roll-call, sure to be accompanied by loud cheers, jeers, assorted sign-waving, and yelping from the disaffected Sanders delegations. It is expected that Hillary Clinton will be awarded the delegates she needs to secure the Democratic nomination, though many Sanders supporters have not given up hope for a last-minute change of heart by some super delegates.

It's a long shot for Sanders, but he will continue his fight for social justice as a serious sideshow in the run-up to November's elections.

Tuesday's Tremble:
Dow Jones Industrial Average
18,473.75, -19.31 (-0.10%)

NASDAQ
5,110.05, +12.42 (0.24%)

S&P 500
2,169.18, +0.70 (0.03%)

NYSE Composite
10,772.99, +20.56 (0.19%)

Monday Blues: Stocks Fall; Is It The Trump, Clinton, Sanders or Putin Effect?

Over the weekend, the political climate became highly charged with the release of thousands of emails from the servers of the Democratic National Committee courtesy of Wikileaks and, as some presume, the assistance of Russian operatives. The propaganda nailing Russia as the bad guy was already underway as of the Sunday news shows. It's very likely to be completely spurious.

The leaked emails revealed a concerted effort to swing the primary vote toward the favored candidate, Hillary Clinton, and away from upstart radical, Bernie Sanders. To say the least, the emails were scandalous and disgusting, revealing just how deeply ingrained the status quo has become, and the lengths to which they will plumb in order to have public opinion bend to their will.

Suffering the most from the fallout was DNC chairwoman Debbie Wasserman Schultz, who was forced to announce her resignation as chair on Saturday. Ms. Schultz announced that she would gavel in the convention on Monday and gavel it out on Thursday.

Those plans fell completely apart on Monday as first, Ms. Schultz was shouted down as she attempted to address the Florida delegation, ironically, people from her own state. After being unceremoniously whisked from the stage, Ms. Schultz announced that she will not be associated with the convention in any way.

In two words: she's fired.

As has been mentioned on this blog in the past and as recently as the prior post which wrapped up last week, once the powers that be begin getting a whiff of a Donald Trump victory in November's presidential election, stocks will fall, leaving the Donald a mess not unlike what greeted Barack Obama in 2008.

So it is, when central banks and oligarchical politicians believe they can control not only markets, but the lives of the people investing in them.

The modern equivalent of torches and pitchforks are cellphone videos and anti-establishment signs.

Peace. It's a foreign concept in this period and the madness is swelling.

Monday's Politically-Charged Changes:
Dow Jones Industrial Average
18,493.06, -77.79 (-0.42%)

NASDAQ
5,097.63, -2.53 (-0.05%)

S&P 500
2,168.48, -6.55 (-0.30%)

NYSE Composite
10,752.43, -52.61 (-0.49%)

July 18-22: Stocks Level Out After Massive Gains

The huge run-up in stock prices appears to be running out of steam, or buyers, or both.

Since bottoming out post-Brexit, major US indices have ramped higher by nearly ten percent over just the past four weeks. The Dow, for instance, has gained over 1500 points while powering to new high after new high.

The most recent week, however, was the weakest in the last four, with the possible exception of the NASDAQ, which was up more than double its rivals in percentage terms.

This is not to say that the recent rally is over. Far from it, there is no sign of exhaustion in the ranks of central banks, especially the Fed, which will be pulling out all the stops to keep the narrative of an "improving economy" rolling through the week, highlighted by the Democratic National Convention in Philadelphia.

Following the Philly love-fest for Hillary Clinton (never mind the various email and other scandals surrounding the candidate and the rest of the Dems... they will be swept under the rug), the Fed will continue to pour money into stocks through their appointed agents right up until the election.

Setting up what could be one of the easiest buying opportunities in recent memory (though as memory serves, the past eight years haven't been too difficult for stock traders), stocks or index funds could be a very safe place over the coming three months.

A Trump victory in November would probably derail both the giddy narrative and the actual stock market rally, as the status quo would then find themselves on the defensive, with the White House in the hands of a non-politician, non-elitist, populist campaigner. Should Clinton capture the presidency, a slow decline might be the more likely scenario, as the wheels of industry continue their slow grind into mediocrity.

With so much uncertainty, investors have been seen hoarding hard assets. Paid-up real estate, precious metals, machinery and tools of trades can still be had at reasonable levels, and they should not lose much value over the longer term. In fact, they should appreciate quite nicely no matter what happens after November.

For The Week:
Dow: +54.30 (+0.2(%)
S&P 500: +13.29 (+0.61)
NASDAQ: +70.57 (+1.40)

Friday:
NASDAQ Composite
5,100.16, +26.26 (0.52%)

Dow Jones Industrial Average
18,570.85, +53.62 (0.29%)

S&P 500
2,175.03, +9.86 (0.46%)

Stocks Pause; Good Entry Point?

After setting new all-time highs for what seems to be the better part of the past two weeks, stocks finally cooled off on Thursday as somebody, ostensibly, took profits.

But, was that a wise move, or with the Republican National Convention winding down, might this not be a wise time to double down, knowing that the status quo will want to put the best lipstick on its little piggies, making every effort to make Hillary Rodham Clinton the 45th president of the United States of America.

Hillary is obviously the choice of rich bankers and well-oiled politicians who wish for nothing more than another four years of free money from the Fed, insane public policy from the politicians, and more fleecing of the soon-to-be-defunct middle class.

It would appear that with the presidency in her sights, Mrs. Clinton, for all her obvious faults, may be the best thing for equity investors since the FASB eliminated mark-to-market accounting back in 2009.

At least until late October or whenever it appears that nothing can or will stop Mr. Trump from elevating his posture into the White House, the Fed and its many backers will want to keep stocks flying high in hopes that Mrs. Clinton can lay claim to a vigorous economy (which, of course, is pure fiction, and which she had absolutely nothing to do with making it so).

Back up the truck and buy this dip. We could be looking at Dow 20,000 before long.

Dow Jones Industrial Average
18,517.23, -77.80 (-0.42%)

NASDAQ
5,073.90, -16.03 (-0.31%)

S&P 500
2,165.17, -7.85 (-0.36%)

NYSE Composite
10,758.62, -34.48 (-0.32%)

Monday, Tuesday... Minor Gains

Not much happening the first two days of the week...

Dow Jones Industrial Average
18,559.01, 25.96 (0.14%)

NASDAQ
5,036.37, -19.41 (-0.38%)

S&P 500
2,163.78, -3.11 (-0.14%)

NYSE Composite
10,751.91, -41.26 (-0.38%)

Weekend Edition: Historic Rally Stalls At End Of Week

Anticlimactic was Friday's market action after a sustained two-week, post-Brexit collapse rally sent the Dow and S&P 500 to new all-time highs.

Stocks finished with one of their their weakest performances of the month, though it may just be a pause in an otherwise relentless advance led by central bank buying.

Yes, you're reading that correctly; central banks were the leading participants in the post-Brexit rally, preventing what may have turned into a widespread financial panic had the BOJ and ECB not intervened with either direct purchases of stocks or the same via proxies.

This leads to a time-worn dilemma in market confidence otherwise bandied about as moral hazard.

It's the same as fixing horse races or weighting the balls on a roulette wheel. Rigged financial markets will sooner or later be found to be lacking in both stability and longevity, which, when dealing with life-spanning investments touted by the major brokerages, are - or should be - two major pillars of strength.

If central banks continue to play fast and loose with not only monetary policy and begin to dabble in fiscal policy (well underway) and overtly entering trading markets (also pretty obvious), it may be only a matter of time before the curtain is rolled back and the man in the booth behind the controls is revealed as a faker, a fraud, a charlatan, and the foolishly following investors taken in by the scheme.

In simple terms, caution continues to be the best friend of anyone with reasonable means. Hard assets appear once again to be not only safe, but sure.

Many in the financial arena thought that the world was ending in 2008, though afterthought now is clear that an era of unbridled intervention by central banks was only just beginning.

How and when it ends are open questions, but certainly, valuations are stretched to extremes, data - along with stock prices - is being manipulated, and individuals investors have long ago headed for safer havens.

The game may go on for years more, which is likely the path of least resistance since there's so much riding on a continuation of current politics and economics. The thought that the larger the debt and fraud (and both are enormous), the greater the fall may or may not be a truism.

What's working now may be reversed in the near future. One glance at YTD charts of either gold or silver tells you that a paradigm shift may be already underway.

Friday's Closing Numbers:
Dow Jones Industrial Average
18,516.55, +10.14 (0.05%)

NASDAQ
5,029.59, -4.47 (-0.09%)

S&P 500
2,161.74, -2.01 (-0.09%)

NYSE Composite
10,773.12, -13.51 (-0.13%)

For the Week:
Dow: +369.81 (+2.04%)
S&P 500: +31.84 (+1.49%)
NASDAQ: +72.83 (+1.47%)

Dow, S&P Post New Highs Again, But, Who's Doing The Buying?

In a market that more often resembles a three-ring circus than an amalgamation of the best corporate entities vying for favoritism among investors via increased earnings, revenue and expectations, the recent melt-up in US equities has more than just a few analysts scratching their quickly-balding heads.

It's widely known that equity mutual fund outflows have been more or less continuous for the better part of the past four months, a trend that doesn't seem to be abating, despite the recent runaway rally.

So, with mutuals (institutional investors) out of the picture - and they're a huge part of the landscape - and individuals mostly too scared to tread too deeply into the Wall Street morass since the devastation of the 2008 washout, there aren't many places from which the money to buy up all these loose assets can come, except, of course, if you're the operator of a central bank, such as the Bank of Japan, the ECB or the almighty Fed.

For verification of the central bank buying conspiracy theory (now fact), we turn to the erudite and educated Zero Hedge, which puts the matter to rest in no uncertain terms in his recent post, "Mystery Of Surging Stocks Solved—-It’s The Central Banks, Stupid!"

The Hedge cites Citi's Matt King, who publishes a must-see chart of rolling central bank asset purchases, and there for all the world to see are egregiously large buys by Japan and the ECB.

Yep! Those shifty Asians and super-smart Europeans are buying up US equities at valuations measured at a median rate of 24X. Good for them! When they awaken from their Keynesian stupor somebody must announce to them - they being economists, not investors - that the goal is to buy low and sell high, not the other way around.

Their rude awakening will coincide with the complete financial and societal implosion of their economies and their sovereignty, which, in the case of Europe, has been questionable for at least a couple of decades, and, for Japan, is only a matter of time before demographics and deflation tear the country to shreds.

What the world is witnessing (or not, depending upon how many people are playing Pokemon Go at present) is the beginning of the final phase of complete totalitarian financialization by central banks and their appointed henchmen, which will result in hemorrhaged debt defaults by individuals, corporations, and eventually (but maybe initially) governments.

Unlike people and companies, governments have a unique advantage in that they can run deficits and debt in piles as high as the moon without recourse for the most part, until, that is, the general public and business people have enough of higher taxes, worsening living conditions and runaway inflation.

Central banks are even better off, being the enabler of all debt and fiat folly via their ability to print endless scads of fiat money literally out of thin air.

Both groups, the money-makers and the politicians, are parasites, and they are killing the host, that being the good-will and capital of citizens and businesses, burying them in debt that will never be repaid.

Hope for a debt jubilee has reached new heights with the latest round of stupidity, but it is far from over.

The shackles which bind the citizenry and businesses to debt and drudgery, taxes and regulations, will tighten before they are broken.

New all-time highs are great when people and funds are doing the buying. That's a sign of a growing, robust economy. When it's central banks doing the heavy lifting, it reeks of desperation and failure.

Enjoy it while it lasts.

-- Fearless Rick

New Highs! Get 'em while you can!
Dow Jones Industrial Average
18,506.41, +134.29 (0.73%)

NASDAQ
5,034.06, +28.33 (0.57%)

S&P 500
2,163.75, +11.32 (0.53%)

NYSE Composite
10,786.63, +52.43 (0.49%)

The World According To Morons

Noting the popularity of the new smart phone game, "Pokemon Go," and its coincident release with fresh all-time highs on the S&P 500 and Dow Industrial Average, it can be safely assured that the civilized nations of planet earth have entered the final stage of self-destruction, in which morons - not zombies - take over the planet.

In some ways, the process of moron-izing the population is already well underway.

We are led to believe that voting for representatives in government actually is an expression of our freedom within a working democracy. When these representatives, from the president and members of congress on down to the local code enforcement officer, are proven to be solely interested in either re-election, amassing a fortune, or advancing their career paths and not working in the public interest we are called cynical or pessimistic.

Year after year, school budgets are increased while the quality of education is diminished. Normally intelligent-looking people vote to pay more in taxes to support a system that fails on a regular basis.

We pay good money for cable TV or other entertainment delivered to our homes or workplaces to watch people who are vastly overpaid do stupid things or play sports.

Investment professionals routinely lose money on investments with our hard-earned money and yet are hailed as experts within the financial community.

The vast majority of people can't raise a decent garden, hammer a nail or turn a screw. Still, they all complain that the infrastructure of the country is falling apart.

These are but a few examples of the lunacy that has nearly completely gripped our nation. The truth is that the people running things - politicians, bankers, CEOs - aren't all that bright. In fact, most of them are morons, versed only in maximizing their incomes, pensions and perks, but we follow them and aren't too overly distraught that they make 50-70 or 500 times what we do.

We should be, but it's getting a little late in the game to do anything about it. Besides, most of your contemporaries are morons with their noses stuck on their "smart" phones, playing the latest game app.

What can be done? Plenty.

Stand up, do something you haven't tried. Fix something that's broken. Pay less for things you usually buy, or just change your buying habits a little. Save the money, a little at a time, which will grow over time into something more substantial.

Stop voting. Period. Just stop. It only encourages bad behavior by the winners and losers alike.

Spending on frivolities is maybe a favorite of yours. As you grow older, you'll discover that spending money - often money you don't already have (credit) - is a behavior to be avoided. Spending on things you don't need, but only want, can be destructive to your finances.

A way to combat the incessant need to spend, foisted upon us by the media, commerce and ad industry, is to institute no-spend days. This can start as an experiment, as in a "No-Spend Sunday," and expanded to multiple days. It's pretty easy to do. Just buy what you'll need for a few days, and then don't spend any money over the next few.

(I'm currently in the midst of a three-out-of-four no-spend days. After a successful no-spend Saturday and Sunday, I realized I needed beer and ice on Monday, so I reluctantly spent $12.76. Today, Tuesday is a no-spend no-brainer).

It's a rewarding habit, as you end up with more cash in your pocket and a sense of accomplishment, when you actually accomplished little, other than not buying anything.

But, of course, morons won't understand this simple concept.

Until next time,

-- Fearless Rick

Today's markets were horribly dull, likely the result of central banks doing most of the trading over the past few weeks, months, years(?). They decided to not goose the markets any more, since they got over the desired all-time highs, for now. That should work until the next financial non-event, like Brexit, scares out the weak hands or causes some Alphas in the herd to take profits.

The S&P traded in a 10-point range over the entire session; the Dow, 75 points; the NASDAQ range was 33 points.

Whoopie!

At the close:
Dow Jones Industrial Average
18,372.12, +24.45 (0.13%)

NASDAQ Composite
5,005.73, -17.09 (-0.34%)

S&P 500
2,152.43, +0.29 (0.01%)

NYSE Composite
10,734.16, +7.38 (0.07%)

How Now, Dow? New All-Time Highs on DJIA, SPX

The Dow Jones Industrial Average (DJIA) added 120.74 points, or 0.7%, to close at 18,347.67, making a fresh closing all-time high, surpassing the previous closing high when it finished at 18,312.39 on May 19, 2015. The blue-chip gauge briefly hit an intra-day top at 18,371.95.

Additionally, the S&P tacked on nearly 15 points, setting another record closing high.

Continued strength in the markets may be a sow's ear, however, since the Fed might choose to tap on the brakes with a rate hike if such outlandish behavior continues. On the other hand, since the Fed is a major buyer of equities these days, the FOMC may just back away from the rate hike mania and allow markets to simply go where they will with super low interest rates backstopped by a shaky core economy and a presidential election.

There has been no sense in fighting the Fed, since they have unlimited power to print as much as they like, though the natural questions have to be "where will it end, when does it end, how does it end?"

Nobody has the answers, and nearly the same amount is asking. There's too much money sloshing around for anybody to take a step back and take a critical view of fundamental valuations, which are becoming expensive.

Signals have been shown by the markets, but, as has happened throughout history, the signals are being ignored as long as the champagne and money are flowing.

S&P 500: 2,152.14, +14.98 (0.70%)
Dow: 18,347.67, +120.74 (0.66%)
NASDAQ: 5,022.82, +34.18 (0.69%)

No Fear: S&P 500 Makes New All-Time High

Words cannot express...

Monday Mayhem:
S&P 500: 2,137.16, +7.26 (0.34%)
Dow 30: 18,226.93, +80.19 (0.44%)
NASDAQ: 4,988.64, +31.88 (0.64%)

SPX Near All-Time Highs On June Jobs Euphoria

On May 20, 2015, the S&P 500 index (SPX) reached an all-time intra-day high of 2,134.72. The following session, May 21, it set a closing record at 2,130.82.

This Friday, the S&P closed at 2,190.90, settling off the day's high of 2,131.71, so, no records were set in the first full trading week of July (when nobody's paying particular attention), but the major indices are now poised to run beyond their previous highs, set more than a year ago.

Thus, the banking and global finance cartel - which is in complete and unbreakable control of all "trading" markets - has waived any consideration that the third-longest equity bull market in the history of US stock markets was coming to an end.

Bears, those sadly depressed members of the pessimism society (this blog included) are never going to be satisfied it seems. Drops on the major indices of 10% or more (corrections) are not tolerated. 20% declines - bear markets by definition - are not open for discussion within the megalithic construct of global central bank monetarism.

Expect new all-time highs on the S&P promptly Monday morning, with the Dow soon to follow (all time highs of 18,351.36 intra-day and 18,312.39 closing, both on May 19, 2015). The NASDAQ has a bit further to travel, having made its all-time closing high of 5,153.97 on June 22, 2015, reaching its zenith two days later with an intra-day value of 5,164.36.

Whether these prices and averages are justified by fundamental measures of valuation is debatable. By many measures stocks are overpriced. The trading prices of some of the more popular stocks - especially those focused in the technology area (Facebook, Google, Amazon, Apple to name a few) - currently trade at nose-bleed valuations.

According to the financial press, what prompted the sudden jerk higher of US stock markets was Friday's non-farm payroll figures from June.

The Bureau of Labor Statistics (BLS) said non-farm payrolls rose to a seasonally adjusted 287K, from 11K in May, that figure revised lower, from 38K.

Analysts had expected U.S. non-farm payrolls to rise 175K last month, so the surprise factor was enormous. Muddying the waters beyond the mystifying May numbers as compared to June - the largest net gain in eight months, is that the BLS numbers are largely massaged, maneuvered, and mangled into whatever pretzel-logical outcome is desired at the moment.

In a word, the BLS numbers are untrustworthy.

David Rosenberg suggests that the month of June did not in fact show a massive gain, but employment actually declined by 119,000 during the month.

When the Household survey is put on the same comparable footing as the payroll series (the payroll and population-concept adjusted number), employment fell 119,000 in June — again calling into question the veracity of the actual payroll report — and is down 517,000 through this span. The six-month trend has dipped below the zero-line and this has happened but two other times during this seven-year expansion.

Here is another article (from February 2016) that breaks down the faulty, misleading methodology employed by the BLS.

David Stockman opines that the monthly BLS survey is mostly noise and needs to be veiwed over longer periods in order to offer convincing trends and that the May and June tallies, taken together, amount to nothing more than statistical numbness.

Effectively, the BLS survey figures move markets as the algos respond entirely to the headlines, which were out-of-the-park awesome in June. The details were more nuanced, but such does not have influence on stocks.

In any case, since, the Brexit vote, central banks and central planners have returned in force to control the narrative, which, in their view, must continue to be nothing but positive.

For an alternative view, look at the response of gold, silver and especially, government bonds, the 10-year note and 30-year bond in particular, both of which continued to make all-time lows this week.

For the week:
Dow: +197.37 (+1.10%)
S&P 500: +26.95 (+1.28%)
NASDAQ: +94.19 (+1.94%)

Friday's Fantasy:
S&P 500: 2,129.90, +32.00 (1.53%)
Dow: 18,146.74, +250.86 (1.40%)
NASDAQ: 4,956.76, +79.95 (1.64%)

Crude Oil 45.12 -0.04% Gold 1,367.40 +0.39% EUR/USD 1.1051 -0.09% 10-Yr Bond 1.37 -1.51% Corn 361.25 +3.66% Copper 2.12 +0.02% Silver 20.35 +2.58% Natural Gas 2.82 +1.44% Russell 2000 1,177.36 +2.40% VIX 13.20 -10.57% BATS 1000 20,677.17 0.00% GBP/USD 1.2952 +0.30% USD/JPY 100.4600 -0.27%

Banker Cartel Exercising Control Post-Brexit

Editor's Note: Summer is in full swing, and publisher, Fearless Rick, is busy working on his tan, among other various duties, so Money Daily may not be quite so daily for the next six to eight weeks. We urge all readers to get out and enjoy the good weather.

Markets have calmed considerably since the craziness of the past two weeks. Over the past two trading sessions (Wednesday and Thursday), US exchanges were very slightly elevated, but still stuck in the range they've been assigned by the banking cartel since mid-March.

Friday's non-farm payroll report for June is due out at 8:30 am EDT, though it will likely have little effect on trading as Wall Street generally slumbers through summer.

Gold and silver received their usual smack-downs, but there's little doubt that more and more people are looking for safety in precious metals and other non-financial assets.

Thursday's Tremblings:
S&P 500: 2,097.90, -1.83 (0.09%)
Dow: 17,895.88, -22.74 (0.13%)
NASDAQ: 4,876.81, +17.65 (0.36%)

Crude Oil 45.19 -4.72% Gold 1,361.00 -0.45% EUR/USD 1.1064 -0.27% 10-Yr Bond 1.39 +0.14% Corn 348.50 +0.07% Copper 2.12 -1.44% Silver 19.72 -2.39% Natural Gas 2.76 -0.83% Russell 2000 1,149.76 +0.21% VIX 14.76 -1.34% BATS 1000 20,677.17 0.00% GBP/USD 1.2910 -0.13% USD/JPY 100.7710 -0.60%

Markets Becoming More Volatile By The Day; Italian Banks, British Real Estate Hit Hard

It's getting a little scary out there in finance-land.

Following the epic exercise in individual democracy in Great Britain, the world's elitist bankers and political forces have been scampering from one impaired asset class to another, the latest and most prominent being Italian banks and British Real Estate Investment Trusts (REITs).

Since Monday, three separate REITs in Britain have shut down redemptions in the wake of panicked outflows since the Brexit vote.

On Tuesday, Standard Life and Aviva both halted redemptions in their U.K.-focused property funds, which are pooled investments that hold real estate, similar to a REIT. Later in the day, M&G Investments joined them.

As for the Italian banking sector (recall that Mario Draghi, current head of the ECB, mismanaged most of Italy's financial escapades a decade ago), FUGGEDABOUTIT!

Just today, short-selling was banned in shares of Banca Monte dei Paschi di Siena, Italy's third-largest bank. Other banks in Italy are in crisis mode, with a huge amount of non-performing loans hanging over a weakening economic picture.

Here in the new world, stocks were slammed as investors suddenly noticed that the major indices were once again closing in on all-time highs. Realizing that the fundamentals didn't support such extreme valuations, it was risk off all day, with the three biggies spending the entire session in the red.

Silver continued its impressive run, closing at 19.91 in New York (where the manipulation occurs, though lately isn't working), but gunning up as trading opened in the Far East.

Here are the results, suckers:
S&P 500: 2,088.55, -14.40 (0.68%)
Dow: 17,840.62, -108.75 (0.61%)
NASDAQ: 4,822.90, -39.67 (0.82%)

Crude Oil 46.65 +0.11% Gold 1,364.10 +0.40% EUR/USD 1.1061 -0.05% 10-Yr Bond 1.37 -6.11% Corn 356.75 -0.35% Copper 2.18 -0.21% Silver 20.28 +1.87% Natural Gas 2.78 +0.43% Russell 2000 1,139.45 -1.50% VIX 15.58 +5.48% BATS 1000 20,677.17 0.00% GBP/USD 1.2961 -0.45% USD/JPY 101.1910 -0.51%