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Something Is Not Working And It's Called Price Discovery

On Thursday, stocks closed the day essentially flat, with the exception of the NASDAQ, which seems to go up continually, no matter what the news, data or geopolitical conditions.

Oil slipped a little after being pumped and dumped. Precious metals were slammed without mercy, another annoying feature of the central banking control clique.

There seems to be a missing mechanism somewhere in this busted system, such as the one that transfers money from corporations to worthy shareholders or that can actually present a rational value for gold and silver.

It's called price discovery and there hasn't been an honest mechanism for such since 2009, probably earlier.

Like everything else, including the senate testimony of one former FBI Director James Comey, the stock market is built upon a mountain of flimsy propositions, most of which make little to no economic sense, unless, of course, one believes that borrowing insane amounts of money and printing even more will bring prosperity.

Hogwash.

At the Close, 6/8/17:
Dow: 21,182.53, +8.84 (0.04%)
NASDAQ: 6,321.76, +24.38 (0.39%)
S&P 500 2,433.79, +0.65 (0.03%)
NYSE Composite: 11,676.79, +9.06 (0.08%)

Crude Oil Sinks on Continuing Glut, Slack Demand, Alternatives

While stocks have zigzagged and gone nowhere the first three days of the week, oil has been more consistent in direction, with WTI crude dropping by two dollars a barrel on Wednesday under $46, a nine-month low.

There's been a glut of oil on world markets for some time now, but it's been especially painful to producers since the market riggers lost control in 2015, sending the price from imaginary levels - forced upon the planet by the myth of "peak oil" - around $100 per barrel to where it stands today.

Oil's recent swoon brings up a good question. With all the oil sloshing around and a myriad of factors leading to lessened use of the "fossil fuel," what exactly is fair value for crude?

There are many arguments with which to weigh the answer, whatever that may be, but one element that is undeniable about the current condition, is that producing nations aren't exactly in love with what they're being paid for a barrel of the slippery stuff. That's because many of the producers - OPEC and Middle East nations, primarily - had budgeted for steady sales around the high-water mark of $100/barrel.

Since that price turned out to be completely unsustainable, these countries have had to adjust their spending and programs, leading to some degree of discontent among their citizens. Americans, who benefitted from fracking and shale drilling, have been the biggest beneficiaries, seeing the price of a gallon of gas fall from an average near four dollars to today's prices in the low two dollar range.

One of the largest factors contributing to the glut is purely demographic. Many established economies - Japan, US, Europe - are aging, and older people simply don't drive as much. Add to that the improvements in fuel economy, plus alternatives such as cars which run on natural gas or electricity and he trend becomes more pronounced.

As the price of crude continues under pressure, alternative fuels, such as increased use of coal, solar, and wind in the United States, will only exacerbate the condition.

Back in the good old days of the 70s and 80s, oil used to be under $20 per barrel. Then along came the "peak oil" sham, which sent the price through the roof and consumers to the poorhouse. The true price may or may not be found in the current regime of futures prices, a system that has and probably continues to be gamed, but the real price, taking into account the massive amounts of oil on and off the market, the stagnation of the global economy, and emerging alternatives, is likely to be found at levels well below what it is pinned at today.

Try thinking of oil at about $32-36 per barrel and gasoline at $1.60 and you're probably on the right track.

At the Close, 6/7/17:
Dow: 21,173.69, +37.46 (0.18%)
NASDAQ 6,297.38, +22.32 (0.36%)
S&P 500 2,433.14, +3.81 (0.16%)
NYSE Composite: 11,667.73, -3.73 (-0.03%)

A Disturbance in the Farce? Stocks End Lower Second Straight Session

Stocks turn red for the second straight session, this being the first full week of June, suggesting that there may be a revised adage for the new Wall Street, "Sell in June and avoid the swoon?"

Obviously, two days of smallish losses does not constitute a trend. Three days might. A close on the Dow below 20,600 would. Not only would that be a nearly three percent decline (OMG!), but it would be below the previous low close, a line of demarcation that could signal the oncoming of a bear market.

Those who deny the possibility of a bear market are either under the age of eight and have never seen what one looks like, or has forgotten prior bear markets, which generally occur when stocks are overstretched, overvalued and/or overbought.

To imagine that after eight years of somewhat spectacular gains that investors might disinvest and actually pull some of their support from the lofty prices of stocks on the Dow, NASDAQ, S&P, et. al., is not so far-fetched. It's happened before. It will, in all likelihood, happen again.

Trying to time such an event is the task of fools. With the FOMC ready to raise interest rates again, despite the incongruous activity in the bond markets (10-year-note yield at seven month lows, 2.15%), continued declines may become not a nuisance, but a feature this summer, one of the big hits that Hollywood will miss completely.

At The Close, 6/6/17:
Dow: 21,136.23, -47.81 (-0.23%)
NASDAQ 6,275.06, -20.63 (-0.33%)
S&P 500 2,429.33, -6.77 (-0.28%)
NYSE Composite: 11,671.46, -22.22 (-0.19%)

Unconvincing Open To the Week; Inflation/Deflation Debate Grows; Oil Continues Slide

In the ongoing inflation/deflation scrimmage, it's a draw, but, depending on where you've placed your bets, the victories may be huge.

For the investing crowd, stocks are golden and likely will continue to be so. Rough spots ahead include the June FOMC meeting (next Tuesday and Wednesday) and the coming fight in the congress over President Trump's proposed tax plan, which would constitute not only a major victory for the president, but also a big one for the American people, so it's far from a sure thing.

Congress, in case nobody has noticed, remains, for the most part, useless. Unless one is interested in hearings which lead to nothing or vacation time for rich Senators and soon-to-be-rich members of the House, neither the Republicans nor Democrats seem willing to actually legislate upon anything that will benefit anybody outside the District of Columbia. Truly, congress has become a closed loop between special interests represented by K Street lobbyists and insider deals that benefit one's own district (and that's becoming something of a rarity).

Noting that the government - outside of President Trump's ongoing efforts for change - remains powerless to do anything positive, Wall Street is probably giddy over the prospects, being that the major corporations which own, buy, and sell debt and equity are well insulated against any untoward legislation or outside shocks within their own cozy club.

Thus, it makes little sense to do anything except invest in the only asset class returning gains and/or dividends. Precious metals have floundered for the past four years, and oil has been in the dumps over the past two.

The slide from the low $50 range for WTI crude continued on Monday, dipping as down to 46.86 before recovering late in New York into the low $47 range.

So, in a nutshell, food and many other consumer staples remain without pricing power, restaurants are varyingly in a race to the bottom or towards diversifying menus with many of the large chains offering enticing deals. Retail overall is a basket case, now that online shopping has gone mainstream and will soon overtake brick and mortar from a gross revenue standpoint.

It's stocks for appreciation, though the wizards of Wall Street are somewhat blind to the disinflation, deflation and decimation of Main Street.

At the Close, 6/5/17:
Dow: 21,184.04, -22.25 (-0.10%)
NASDAQ: 6,295.68, -10.11 (-0.16%)
S&P 500: 2,436.10, -2.97 (-0.12%)
NYSE Composite: 11,693.65, -25.04 (-0.21%)

Stocks Gain Again With No End in Sight

The rally continued this past week, despite a weak outlook for employment with the May NFP data coming in well short of estimates and the prior two months (March and April) revised lower.

As has been the case for the better part of the last eight years, stocks charted their own course, without regard to underlying fundamental data. As the market entered the first full week of June, the ancient adage of "sell in May and go away" did not apply. Stocks were higher (the DOW, NASDAQ and S&P all making new all-time highs) the past two weeks and up in eight of the last 11 overall.

Bonds are telling an odd story as well, with the 10-year note falling below 2.20% yield on Friday, the lowest level since the election. The action in bonds is unusual, considering that the Fed is prepared to and has hinted at raising the federal funds rate another 25 basis points at their June FOMC meeting, which will be held next week, on the 13th and 14th.

Entering Monday's trading, futures are pointing lower, though that means little, except that the expected levitation will be delayed a few minutes or maybe even a few hours.

At The Close, 6/2/17:
Dow: 21,206.29, +62.11 (0.29%)
NASDAQ: 6,305.80, +58.97 (0.94%)
S&P 500: 2,439.07, +9.01 (0.37%)
NYSE Composite: 11,718.70, +18.91 (0.16%)


For the week:
Dow: +126.01 (0.60%)
NASDAQ: +95.60 (1.54%)
S&P 500: +23.25 (0.96%)
NYSE Composite: +86.83 (0.75%)

To Start June, Stocks Soar Without Reason; Dow, NASDAQ Set New Marks; NFP Disappoints

Just because...

At The Close, 5/1/17:
Dow: 21,144.18, +135.53 (0.65%)
NASDAQ: 6,246.83, +48.31 (0.78%)
S&P 500: 2,430.06, +18.26 (0.76%)
NYSE Composite: 11,699.79, +101.76 (0.88%)

Updating, at approximately 9:00 am ET:

May Non-farm Payroll data disappointed, coming in well below expectations of 185,000 net new jobs, at 138,000.

April was revised lower, to 174,000. The May figure is the second-lowest since November 2016, and is the sixth month of the last eight that job creation was less than 200,000, dating back to October, 2016.

Is this showing the real nature of the US economy? That job creation is still stagnant or slowing, with the economy remaining in favor of large corporations with significant barriers to entry by smaller firms.

This is the turret of the US economy. The myriad of regulations and laws, engineered and gamed by lobbyists for major firms, favor big business at the detriment to small business and entrepreneurism. The rules, regulations, licenses, and filing requirements for business favors larger firms because they - due to their vast monetary advantages - can pay the onerous fees, lawyers, accountants and compliance costs without much of a dent to their bottom line.

Smaller firms lack the financial resources to deal with the myriad of federal, state and local laws, finding themselves at such a disadvantage that many people considering starting up their own business, do not, once they research the complications of tax laws and other regulations. Thus, the number of self-employed people in the USA is lower today than it was in 1990.

That figure is depressing because there are 72 million more Americans now than there were in 1990. Worse yet, according to Michael Snyder's Economic Collapse blog:

...the percentage of “new entrepreneurs and business owners” declined by a staggering 53 percent between 1977 and 2010.

So, while Wall Street funds the well-heeled huge corporations, Main Street and small town America is still stuck in the depression that began in 2007 (some say 2000) and has not ended, despite the "recovery" meme from the past eight years.

If working for some gigantic global corporation at slave wages and having 40% of your paycheck stolen from you in the form of taxes and contributions is any American's idea of freedom, growth, or prosperity, one wonders what a recession or depression really looks like.

Americans could have and should have destroyed the corporate-government partnership back in the sixties, but, after the youth revolution was crushed by the military-industrial complex, the Baby Boomer generation blindly went along their merry way, co-opted into the system. Now they are all retiring, wondering if the $500,000 or $1 million they've squirreled away over the years will last them the rest of their lives.

Meanwhile, the country they were born into and suckled upon no longer resembles the one of their youth. They will leave to future generations a small shadow of a once-great nation, Donald Trump or no Donald Trump. Sadly, to this point, the evidence points to the president favoring big business over small. Perhaps that is just perception, or maybe it's too soon to judge him on the small business front, because, after all, he was - long ago - a small business - and has dealt with many small business owners in the past.

There may yet be hope for small business in America, but the rules favoring big business are choking it down.

A Brief Look at the Fall of the Roman Empire and Comparisons to America

This is simply priceless.

Just after the market open (9:45 am ET), Chicago PMI was reported at 55.2

U.S. Midwest factory activity index retreats in May - Chicago PMI
NEW YORK U.S. Midwest manufacturing activity fell more than forecast in May from its strongest level in more than two years, an index jointly developed by MNI Indicators and ISM-Chicago released on Wednesday showed.

A couple of hours later (after the Dow was down 87 points):

Updated: Chicago PMI Increases in May
Earlier, the Chicago PMI was reported at 55.2. That has now been corrected to 59.4. This was above the consensus forecast.

So, not only do US (and, by way of inference, all other equity markets, globally) equity markets have the backstopping mechanism of central banks buying stocks, and the Plunge Protection Team at work, but now routine data releases are changed when they don't exactly fit the narrative.

Fake news, fake money, fake boobs, fake everything. Better check your pulse. It may be fake and you are actually dead.

These's only one way to report on finances anymore, with tongue planted firmly in cheek.

A major reset is coming. The sustainability of the current construct probably has a pretty short shelf life. However, in financial and historical terms, that could be months, years or decades. The fall of the Roman Empire was a slow-motion wreck that took over 300 years, roughly from 117 AD to 476.

Wikipedia has an interesting opening line on the Fall of the Western Roman Empire:

The Fall of the Western Roman Empire (also called Fall of the Roman Empire or Fall of Rome) was the process of decline in the Western Roman Empire in which it failed to enforce its rule, and its vast territory was divided into several successor polities.

-emphasis Money Daily

Note the wording, "failed to enforce its rule..." which would coincide roughly with the greatest fiasco related to the most recent election campaign, wherein FBI director James Comey laid out specific crimes by Hillary Clinton, but concluded that "no reasonable prosecutor would bring charges." Add to that the short meeting between former president Bill Clinton and then-Attorney General Loretta Lynch on the tarmac of the Phoenix airport just a few days prior to Comey's televised statement and you have a textbook case of "failing to enforce its rule."

So, the fall of the American empire may be in its earliest days. You can breath a sigh of relief now.

Well, maybe not.

Looking at the decline of Rome another way would be to examine its currency, which was gold and silver. The devaluation of the currency predates the earlier given date of the beginning of the fall at 117, when Emperor Nero fiddled with the silver content in the denarius, reducing it from 100% silver to 85%, during his reign from 54-68 AD. By the time Emperor Severus ruled (193-211 AD), the coinage was down to 50% silver. Eventually, Roman coins would contain less than 1% silver or none at all.

From that perspective, we could be almost at an end. These days, life moves faster than it did in Roman times. Romans didn't have instant communications, computers, cell phones or any of the "essentials" which we today take for granted. Consequently, technology has made it possible for everything outside of nature (animals, climate, insects, geology, etc.) to move at a much faster pace.

Thus noted, the American empire may be collapsing much faster than mainstream economists are willing to admit. The US Mint stamped its last gold coin in 1932. It stopped 90% silver coinage in 1964. Nixon took the US off the gold standard in 1971. Since then, our money has had no backing beyond the "full faith and credit" of the federal government, which, as many are now aware, has overextended its credit, causing a severe loss of faith by its loyal subjects (eh, that would be us, homey).

It's probably close to a majority of people living today in the United States which are clueless concerning the value of their currency, which is basically the paper upon which is printed numbers, words, pictures of dead presidents, and other indicia of America's greatness. Anybody born in 1971 would be 46 or 47 now; anybody born after that date would be, obviously, younger. All of those people have been living in a world of fiat currency, backed by absolutely nothing except empty promises from a federal government which can't balance its own books.

Making matters worse, US currency (or legal tender, to be correct) may be technically unconstitutional. The arguments concerning the constitutionality of the Federal Reserve to print paper money - granted that right by Congress in 1913 - are vague, various, contentious, and too deep for this limited discussion. But, a great many people have and some still do believe that money not backed by gold or silver or some other base commodity is, well, garbage.

104 years of the Federal Reserve ruining our economy has devalued the US dollar by 98%. So, where are we headed?

On the other hand, perhaps modernity consists of allowing such counterfeiting and fakery by central bankers and the tacit approval of the populace. In other words, don't rock the boat, keep with the status quo; the modern mores and normalcy bias will prevail. In that regard, Americans are a pretty complacent bunch, like the traders, movers, and shakers of Wall Street. We all go along to get along, or, in the words of a Russian during the Soviet era, "we pretend to work, and the government pretends to pay us."

We're deep down the rabbit hole, folks, and it appears that we're going deeper.

BTW: No "window dressing" on the final day of the month. Also, hat tip to Zero Hedge for inspiring this article.

At the Close, 5/31/17:
Dow: 21,008.65, -20.82 (-0.10%)
NASDAQ: 6,198.52, -4.67 (-0.08%)
S&P 500: 2,411.80, -1.11 (-0.05%)
NYSE Composite: 11,598.03, -3.28 (-0.03%)

Stocks Gain, Bond Yields Continue Lower in Fed-inspired Environment

Opening the week with across-the-board losses, the major indices took a little off the top Tuesday, the penultimate trading day for the month of May.

The losses were limited in scope, however, as speculators seem reluctant to forego gains in a bull market that has shown few signs of slowing.

With optimism on Wall Street approaching a state irrational exuberance, the issue becomes one of not when the market will reverse course, but at what speed. A sharp downturn could expose many hedgers and options players, though the Fed and their cohorts at the ECB, BOJ, and the PPT would likely quash any rampant selling by putting an artificial floor on the market, a tactic they've employed over the last eight years of fake recovery.

Unlimited upside is the overarching theme of the decade, despite the Fed's promise to raise interest rates four times in 2017. Despite the threat of tighter money, the 10-year treasury note closed out the day at 2.22% and shows no sign of reacting negatively to any Fed jawboning nor actual policy directives.

While the bull market remains intact at eight years and running, the bond rally is at 30 years. Liquidity and solvency have been the main catalysts since 2009, with central banks coordinating bond (and equity) purchases in order to prevent a complete collapse of the global financial system, which almost fell apart in 2008-09.

Complete control of all markets being the ultimate goal of central banks, the money-printers are close to achieving just that. Even if economic data remains sluggish, weak, or troubling, the Fed and friends will be at the rescue. Stocks have been unable to extend any losing streak to frightful lengths, thanks to central bank intervention, fearing losing control.

Whatever the outcome of the June FOMC meeting, it's almost a slam-dunk that stocks will gain. It's simply the way the market is currently composed.

At the Close, 5/30/17:
Dow: 21,029.47, -50.81 (-0.24%)
NASDAQ: 6,203.19, -7.00 (-0.11%)
S&P 500: 2,412.91, -2.91 (-0.12%)
NYSE Composite: 11,601.31, -30.56 (-0.26%)

Stocks Up for the Week; Murky Outlook Going Forward

The last full week of May was a solid one for stock pickers, with all the major averages posting excellent weekly gains, despite a somewhat subdued session Friday.

The NASDAQ and S&P notched new all-time highs a couple of times, though the question remains as to just how much higher stocks can ascend given the weakness in macro data and tension in geopolitics.

The start of June is generally a quiet time for markets, but, with central banks backstopping any selloff with unlimited funding, the fun may last some time longer. June's FOMC meeting has been heralded as one in which the Fed may raise the federal funds rate to 1.00-1.25%, which would be a high-water mark since the GFC of 2008-09.

Money Daily disputes to contention of many analysts - 83% of which see a June rate hike - that a rate hike is imminent, due to glaringly obvious poor results in housing, personal income and spending, and industrial production, to name just a few.

Futures are pointing to a negative open in this holiday-shortened week.

At The Close, 5/26/17:
Dow: 21,080.28, -2.67 (-0.01%)
NASDAQ 6,210.19, +4.94 (0.08%)
S&P 500: 2,415.82, +0.75 (0.03%)
NYSE Composite: 11,631.87, -7.43 (-0.06%)

For the week:
Dow: +275.44 (1.32%)
NASDAQ: +126.49 (2.08%)
S&P 500: +34.09 (1.43%)
NYSE Composite: +89.18 (0.77%)

Rally Continues; Assimilation Of Entire Global Economy By Central Bankers Is Nearly Complete

Just for the heck of it, look up a couple of things on your favorite search engine (ours is Bing; we've supplied the links):

The Crime of '73

Creature From Jekyl Island

President's Working Group on Financial Markets

Bank for International Settlements (BIS)

If it's not already obvious, the international cartel of banking has been at this game a long, long, long, time.

Just for fun, here's an article from FEE.org (Foundation For Economic Education) by Robert Higgs: Wartime Origins of Modern Income-Tax Withholding.

If you allow (and who hasn't?) the government to take your money before you ever see it, you're owned. Sure, your retirement fund looks good, but try adding up all the taxes you've paid the last ten years (spoiler alert:: you'll be shocked).

That's all for today, including new record closes for the S&P and NASDAQ.

At the Close, 5/25/17:
Dow: 21,082.95, +70.53 (0.34%)
S&P 500: 2,415.07, +10.68 (0.44%)
NASDAQ: 6,205.26, +42.23 (0.69%)
NYSE Composite: 11,640.73, +19.50 (0.17%)

Stocks Rage into the Close; PPT Mentioned on CNBC

Good stuff on Zero Hedge, when Asher Edelman brought up the PPT (Plunge Protection Team) on CNBC's "Fast Money."

People really don't mention the Plunge Protection Team much anymore, ever since the Fed and their central bank cohorts began their financial asset buying spree in 2009. The Fed money-printing machine puts the PPT (otherwise known as the President's Working Group on Financial Markets) to shame.

The Federal Reserve added liquidity to markets by directly intervening through outright asset purchases of mortgage-backed securities and treasury bills and notes. Known as Qualitative Easing (QE), those in the know simply call it "money printing" or "creating money out of thin air." Both are correct, and, despite all the best intents of Keynesian economics, those actions are supposed to create inflation, which has occurred in stocks, housing and elsewhere, but not in the many and varied consumer staples and discretionary items.

Most consumer prices (and incomes) have somewhat stagnated since the Great Financial Crisis of 2008-09, and, with the Fed threatening another rate increase in June, they probably won't be moving soon. The dislocations in the housing market and the massive transfer of wealth from the poor and middle classes to the very rich, however, have been direct results of Fed action.

So, it's somewhat funny that the commentator would single out the PPT, though he's probably spot on in his general assessment. The bigger issue would be the almost total control of the equity markets by key players, notably, central banks and large commercial firms, i.e., Goldman Sachs, Morgan Stanley, et. al.

Whatever method was in play today, it certainly worked wonders as stocks levitated after 2:00 pm ET into the close.

At The Close, 5/24/17:
Dow: 21,012.42, +74.51 (0.36%)
NASDAQ: 6,163.02, +24.31 (0.40%)
S&P 500: 2,404.39, +5.97 (0.25%)
NYSE Composite: 11,621.23, +16.61 (0.14%)

Central Banks Have Schemed Markets To Unforeseen Heights

If you're 16, eight years seems like a long time.

It's different if you're in your 50s or 60s, because you've lived longer, so eight years might be just 1/7th of your lifetime, or 1/8th, or more. When you're 16, eight years is half of your current lifetime.

Eight years (and two+ months) is also the length of the current stock market rally, and whether that seems like a long time or not, it's significant, being that this bull market has run longer and higher than even the most optimistic people might have predicted.

Who knew, when the Dow was in the dumpster, closing at 6,547.05 on March 9, 2009, that the index would continue to rise, without so much as a 15% correction, uninterrupted, to its current level of 20,937.91, more than tripling in value since the Great Financial Crisis?

Even the engineers and planners behind the massive, central bank asset buying spree had no idea where this was heading, though they were fairly certain that their actions would take stocks much higher. And, it is also likely that the new genii at the Fed has no clue either. Global markets have indeed been in uncharted territory since at least March, 2009, but it's getting to the point - just like the current and ongoing spate of fake news - that nobody even cares anymore.

One might look at his or her quarterly or monthly pension portfolio or 401k and see that the money keeps rolling in and not give a second thought as to why. Life is good, one would assume, and retirement will be even better!

It's this kind of naive thinking that has led many a bull market or bullish stock picker to ruin, but, it does really seem different this time, because it truly is. Never before have the central banks from nearly every developed country coordinated in such a manner to produce such an ungodly financial bubble.

Bubbles eventually burst. Big ones make loud noises.

At the Close, 5/23/17:
Dow: 20,937.91, +43.08 (0.21%)
NASDAQ: 6,138.71, +5.09 (0.08%)
S&P 500: 2,398.42, +4.40 (0.18%)
NYSE Composite: 11,604.62, +19.41 (0.17%)

Markets Continue Boom; Dow Up Third Straight Day

Remember that 372-point drop last week? All gone. Well, almost.

On Tuesday, May 16, the Dow Jone Industrial Average closed at 20,979.75. The following day, the close was 20,606.93.

Ouch.

After three straight days of gains, however, the Dow closed Monday at 20,894.83. So, another 85 points and last week's fallout will be all but forgotten, the band-aid removed, only a small scab remaining.

Don't fight it. Even though you know stocks are overvalued, TINA (There Is No Alternative) says, "Love me."

At The Close, 5/22/17:
Dow: 20,894.83, +89.99 (0.43%)
NASDAQ: 6,133.62, +49.92 (0.82%)
S&P 500: 2,394.02, +12.29 (0.52%)
NYSE Composite: 11,585.21, +42.52 (0.37%)

Despite Friday's Gains, Stocks Finish Week Lower; About To Get A Wedgie?

Major US equity indices finished the week strong, with solid gains across all, but the weekly view gives another picture, despite the NASDAQ diverging radically from the others.

Looking especially at the NYSE Composite, the broadest index available (also the one nobody ever mentions) a rising wedge pattern appears from a May (11,254.87) 2015 top, to a bottom (8937.99) in January 2016, to this week's close at 11,542.69. Though the overall gain from the bottom last January is massive - more than 2100 points), the overall increase from the top in 2015 is fewer than 300 points, a return of less than three percent over a two-year span.

Apparently, this is why no self-serving analyst or financial news commentator ever speaks of the "Comp" in glowing terms because it reveals the truth behind this runaway bull market: that it has been concentrated among a few select stocks, leaving the bulk of issues behind, in much the same manner as wealth is distributed among individuals. Most of the money goes to the top 5%, the rest lag behind.

None of the other indices present such a pattern. They are all higher by double digits over the same period. Thus, the market shows a heavy weight toward highly speculative tech stocks in the NASDAQ, dividend-payers in the DOW, and, naturally, the 500 largest US-based companies (S&P 500).

Breadth being a hidden issue, this central bank campaign of feeding the leaders should continue as we head into what are traditionally the weakest months of trading (i.e., sell in May and go away). Internal squabbling among the FOMC board members may address this issue as the approach to an expected rate hike increase in June quickens.

The Fed has more or less signaled three rate hikes this year, though this second of the proposed three may have to hold off until September, after second quarter GDP and earnings are revealed in the latter half of July and into August. May non-farm employment - which will be announced prior to the FOMC June meeting - will also have significant impact.

After two consecutive down weeks in the S&P, Comp., and Dow, the Fed, and the markets, can ill afford another week of losses, so close attention is warranted. This week may mark a true turning point, if there ever is one to be had.

At the Close, 5/19/17:
Dow: 20,804.84, +141.82 (0.69%)
NASDAQ: 6,083.70, +28.57 (0.47%)
S&P 500: 2,381.73 +16.01 (0.68%)
NYSE Composite: 11,542.69, +108.62 (0.95%)

For the Week:
Dow: -91.77 (-0.44%)
NASDAQ: -37.53 (-0.61%)
S&P 500: -9.17 (-0.38%)
NYSE Composite: -4.57 (-0.04)

The Market as The Matrix; Most People Took The Blue Pill

In case you’re not sure just what a “dead cat bounce” is, imagine taking a dead cat up to the top of a three-story building and dropping it to the ground.

It will bounce, but not much. This is precisely what occurred in US stocks on Thursday, the market getting a reprieve after Wednesday’s bloodbath.

One can try mightily to dissect the various moving parts of the market and arrive at pure conjecture as to what is happening any given day, but these days, reality has become stranger than fiction by massive degrees, even in such hallowed enclaves as financial markets, supposedly not prone to manipulation, fakery, or thievery, but that’s exactly what is on the table.

To say that the Fed, in conjunction with other central banks and their commercial bank proxies, own the market is likely a basic truth. To think that once owned, these players would not mold the narrative and the movement to exactly their liking, is the essence of naivety.

Since 2000, the markets have been owned, even more so since the Great Financial Crisis (GFC) of 2008-09. Based on fiat money and dictates from money printers, the stock markets are the complete tool of enslavement. Governments, pensions, retirement funds, school districts, and all other manner of group investment are tied to “the market,” controlled by the Fed to never stop climbing, lest the debt-slavery of the American public become known.

If markets collapse, so to the deep state system of inflation and skimming, so don’t count on anything changing soon, President Trump or no President Trump, which is exactly why the deep state and the current residents of congress so oppose Mr/ Trump’s every move. He’s a threat to their control of the system.

It’s right out of the film, “The Matrix.” Most people took the blue pill.

Here's a short clip of Laurence Fishburne (Morpheus) explaining the Matrix to Keanu Reeves (Neo).


At The Close, 5/18/17:
Dow: 20,663.02, +56.09 (0.27%)
NASDAQ: 6,055.13, +43.89 (0.73%)
S&P 500: 2,365.72, +8.69 (0.37%)
NYSE Composite: 11,434.06, +10.53 (0.09%)

Wall Street Tumbles Most This Year; Treasuries, Gold Rally

Sure enough, being the contrary indicator for which Money Daily has become legendary, as soon as this blog issued the "all clear," circa the past two days - citing that the Fed has Wall Street's back - then the bottom falls completely out of the market.

While today's massive declines could be nothing more than a case of jitters over the Washington establishment's fixation on making President Trump's life a living hell, or, a simple matter of profit taking, there's some indication that both may be partially true.

As usual, with everything related to stocks and finance since roughly the year 2000, there's insufficient information upon which to make a decisive call. One day's worth of declines by no means indicates anything fundamentally wrong, and it's likely that this current bout of market indigestion will blow over with the next data release.

Moreover, given that the mainstream media is chock full of creeps, fabricators and liars, it wouldn't be beyond the pale for financial media to be right in the middle of the "fake news" mix. To the point, the headline on Yahoo Finance at today's market close screams, "Stocks tumble as Trump worries Wall Street," as if it's the President himself causing consternation among international financiers, when in fact, it is the news media itself promulgating questionable narratives surrounding the President and his administration.

Thus, there may be something more compelling afoot. Perhaps some of the more recent data releases haven't been particularly rosy, or maybe somebody deep inside the global financial establishment knows something of which the general public isn't keenly aware. That insiders would know more than the public is undeniably true; whether or not there's something big about to occur - and this was just cover for a deeper dive - is a matter of great conjecture.

On the surface, that doesn't seem to be the case. Tuesday's releases showed that capacity utilization and industrial production both beat expectations, but housing starts and building permits missed the mark. Wednesday's release of crude inventories (a drawdown) and mortgage applications (off by 4.1%) shouldn't have catalyzed the market into this kind of paroxysm.

What we do know is that the dollar index (97.456) fell again today (fifth straight decline) and has been below 100 for a full month. That's sent gold soaring (up nearly two percent today), with silver tagging along, though without as much gusto (+0.73%, 16.87/oz.). A falling dollar should be good for US companies, though that correlation hasn't always held true, because US imports in other countries' currencies would cost less.

We also know that today's losses were the worst of the year for the major indices and Treasuries were rallying, with the 10-year yield falling to 2.22% and the two-year moving down to 1.24%.

Thus, the crystal ball remains cloudy. Thursday's market action may be more telling. It's never too late to take a profit, nor is it ever too early to cut losses. Maybe Wall Street has come to its senses.

At the Close, 5/17/17:
Dow: 20,606.93, -372.82 (-1.78%)
NASDAQ: 6,011.24, -158.63 (-2.57%)
S&P 500: 2,357.03, -43.64 (-1.82%)
NYSE Composite: 11,423.54, -182.95 (-1.58%)

Political Theater Weakening The Dollar; Silver, Gold Up

After setting new record all-time highs (again, and again, and again) yesterday, core investors in the S&P 500 took a back seat to the NASDAQ nutcases who pushed the index to another record close.

While this is beginning to be reminiscent of the 1999-2000 tech bubble and bust, we're still in the bubble stage, so hang on to whatever you're not trading. If you must, get some protection in cheap NASDAQ put options to protect your position.

In case you're not invested in stocks or are more interested in baseball, the NBA playoffs or the current political circus in Washington, a close eye on the dollar index might be a suggested tonic, which goes well with either gin or vodka.

Wiht the dollar index down, gold and silver registered nice gains on the day, but, as soon as the crooked dealers at the COMEX get wind of it, that will change. Gold and silver bugs keep hoping that the current fiat system implodes, which would likely enrich them, though that's an old conclusion not necessarily in order these days.

Taking close to a one percent hit on the day (could it possibly be because even Republicans are now openly in opposition to President Trump, along with the requisite fake outrage from Democrats?) the political climate in Washington is beginning to sour experienced traders and geo-political watchers, mostly because it doesn't take a break. The opposition to the current sitting president is outrageous and loud, and the fear is that something is going to break, if not the President's tweeting pattern, then maybe blood vessels on house minority leader Nancy Pelosi's forehead.

Then again, majority leader Paul Ryan's sound bites on the "Trump gave Russia top secret info" fake news has to make one wonder just what the deep state has on him. He looks like a square guy, but he acts like a Democrat, unless, of course, Trump pushes through a healthcare reform bill or something along those lines. Then he's all glad-handing and giddy. The guy has no political future, and, unless the press and the Democrats begin conducting themselves in more decorous manners, neither does the country.

At the Close, 5/16/17:
Dow: 20,979.75, -2.19 (-0.01%)
NASDAQ: 6,169.87, +20.20 (0.33%)
S&P 500: 2,400.67, -1.65 (-0.07%)
NYSE Composite: 11,606.49, -7.75 (-0.07%)

With the Fed Pledged to Complete Wall Street Backing, There's No Top In Sight

At the Close, 5/15/17:
Dow: 20,981.94, +85.33 (0.41%)
NASDAQ: 6,149.67, +28.44 (0.46%)
S&P 500: 2,402.32, +11.42 (0.48%)
NYSE Composite: 11,614.23, +67.18 (0.58%)

Welcome to the asylum.

Just for reference, a random look at stocks from a one-year perspective.

On May 16, 2016, here's where the major averages closed.
Dow: 17,500.94
NASDAQ: 4,769.56
S&P 500: 2,052.32
NYSE Composite: 10,250.49

OK, so those look like nice gains, right? How much, percentage-wise, through today's close:
Dow: 16.59%
NASDAQ: 22.45%
S&P 500: 14.58%
NYSE Composite: 11.75%

The obvious question is, how long, with the current bull market more than 8 years long (second longest in market history) can this continue?

Skeptics posit that the entire global financial structure is a massive Ponzi scheme based entirely on fiat money backed by nothing, while realists may refer the old "go with the flow" ideology.

With the Fed continuing to be accommodative via historically low interest rates and the continued buying of financial assets by central banks, there may be no better time to be in the market.

Whoever it was who coined the term, "don't fight the Fed," should be sainted immediately by Pope Francis. This bull market could last another two years or end in two weeks. For now, nearly the entire investment community (approaching 100%) is bullish on stocks, which typically signals a turn of fortune. However, this time truly is different. Never has there been the levels of accommodation and asset purchasing by central banks, who eventually, if current patterns play out, will own the entire market, at inflated prices.

Then what?

Global hyperinflation? It could happen, but that will take time.

Stay the course. This is the age of easy money.

Stocks Little Changed For Week With Tech Titans Continuing Leadership

Taken as a whole, the week on Wall Street was about as exciting as a Gheorghe Zamfir concert, without the music.

Stocks gyrated through very narrow ranges, extending a pattern that have prevailed - with only minor aberrations - since late March. In that span of time the major averages are roughly even on a daily and weekly basis, the major exception being the NASDAQ, which continues to climb without regard to fundamentals, driven largely on an odd combination of momentum, hope, faith, greed and a noticeable absence of fear, pricing out major tech companies, especially Alphabet (GOOG), parent of Google; Amazon (AMZN); Apple (AAPL); and Facebook (FB).

Those four companies have outperformed the broader market and carried the whole of Wall Street with it. In an investing environment largely devoid of critical analysis, these "no-brainers" of tech 2.0 or 3.0, or whatever moniker one wishes to place upon the rapid multiple expansion in this space, a few stocks make for giddy headlines.

The facts be damned; all of the investment money from funds and pension plans are routinely flowing into this small piece of the pie, crowding out smaller firms which operate without the largess of the Wall Street elite connected by the hip to the Federal Reserve.

It's a troubling scenario which bears watching closely as the bull market continues to run at its own pace. With the Fed and central bank cronies underwriting the entire market, there's a fakery here that is reminiscent of the tightly-held mainstream media.

Happy hunting!


At the Close, 5/12/17:
Dow: 20,896.61, -22.81 (-0.11%)
NASDAQ: 6,121.23, +5.27 (0.09%)
S&P 500: 2,390.90, -3.54 (-0.15%)
NYSE Composite: 11,547.05, -16.55 (-0.14%)

For the week:
Dow: -110.33 (-0.53%)
NASDAQ: +20.47 (0.34%)
S&P 500: -3.54 (-0.15%)
NYSE Composite: -68.54 (-0.59%)

Retailers Post Losses, Send Stocks Reeling Before Late-Day Recovery

Stocks finished lower, but well off the lows set earlier in the day, as Macy's and other retailers continue to under-perform the broader market.

The retailer reported earnings well below expectations. Kohl's, Penny's, Sears, Nordstrom and Dillards were also big losers on the day. Macy's same-stare sales plummeted 5.2% in April.

The demise of brick-and-mortar retailing is a continuing trend that shows no sign of abating as Americans turn to online retailing as their preferred buying methodology. Store closing in malls and shopping centers around the country have only accelerated as company CEOs seek ways to cut costs and salvage what remains of a buggy-whip-type industry.

Alongside retail, cable companies and network broadcasters could be next, as consumers, enraged over continued increases in television subscription services, cut the cord and elect to go completely wireless.

These trends should continue until most of North America sees malls and cable and phone lines as mere remnants of a wired, consumer-driven past.

At the close, 5/11/17:
Dow: 20,919.42, -23.69 (-0.11%)
NASDAQ: 6,115.96, -13.18 (-0.22%)
S&P 500: 2,394.44, -5.19 (-0.22%)
NYSE Composite: 11,563.60, -35.38 (-0.31%)

Why Is The Internet Such A Pain In The Behind?

Why can't we get what we want from the internet?

Three things that are frustrating:

1. Yahoo Finance - all I wanted was an orderly listing of the Dow, S&P, NASDAQ and the NYSE Composite. I have it in my portfolio watchlist, but Yahoo Finance can't seem to understand that I want those items on the sidebar when I open the Finance home page. Instead I get "Recently Viewed," which is garbage, since I seldom look at stocks on their horrifically-slow, impossible-to-navigate website. I tried to customize my view - three &*@#$%@#) times - without success. Why did Verizon buy this price of junk? And for how much? They'll need 50 coders working full time for a year to unscramble this spaghetti code. ArgHHHH!

2. Cell plans - I broke down and went with an unlimited plan via a hotspot because I'm out in the sticks where theere is no cable. It's just over $100 a month, but, the kicker is that if I wanted to add my phone, it would have cost another $20 a month. Seriously? I hardly use my phone, so I kept my super-cheap pay-as-I-go plan, which costs me about $6 a month, since I have grown increasingly reluctant to talk to anyone unless absolutely necessary. I have a flip-phone.

3. Ebay, Amazon, and other online "marketplaces" - All I want is a place where I can list my items for sale and link back to my website, which is a price guide for what I sell. I'm not trying to circumvent paying fees; I'm just trying to get more traffic. There's no way to do it, anywhere, without paying through the nose, and even then, as in eBay's unbelievable terms of service (TOS) - which runs about 90 pages (no, really) - I might be fined, listings removed and/or banned. If the internet was built primarily to LINK information in an organized fashion, why do these enormous data=hogging public companies insist on restricting user access?

It's a mess, thanks to greedy, useless, overpaid CEOs and their mindless lackeys.

Otherwise, everything is rosy. Buy stocks.

At The Close, 5/10/17:
Dow: 20,943.11, -32.67 (-0.16%)
S&P 500: 2,399.63, +2.71 (0.11%)
NASDAQ: 6,129.14, +8.56 (0.14%)
NYSE Composite: 11,598.99, +31.47 (0.27%)

Apple Tops $800 Billion Market Cap; NASDAQ Closes At All-Time High

Stocks were basically flat on Tuesday, but the NASDAQ finished at a new record high, paced, in large part by Apple (AAPL), which topped $800 billion in market cap on the day's gains.

Apple's most recent rise is likely due to two major investors, the Swiss National Bank (SNB) and Warren Buffett's Berkshire Hathaway, which has taken a major position in the world's richest company by market cap.

That's not surprising, given Buffett's record of success over the years, though it is hardly a genius pick. After all, if Buffet knows the Swiss National Bank is one of Apple's largest shareholders and continues to buy, why not join the party?

Buffet is well-connected and pretty bright, but owning Apple is pretty much a no-brainer in these days of central bank asset boosting.

At the Close, 5/9/17:
Dow: 20,975.78, -36.50 (-0.17%)
NASDAQ: 6,120.59, +17.93 (0.29%)
S&P 500: 2,396.92, -2.46 (-0.10%)
NYSE Composite: 11,567.52, -27.74 (-0.24%)

Stocks Gain, But Nobody Should Be Surprised Thanks To The Swiss National Bank

Today's comment is going to be very brief, because, as stocks finished ever-so-slightly in positive territory (excepting the NYSE Comp.), that should not be news since central banks continue to purchase financial assets at a record pace, the latest paper-printer being the Swiss National Bank (SNB), one of Apple's (AAPL) major shareholders.

iYodelee-hoo.

At the Close, 5/8/2017:
Dow: 21,012.28, +5.34 (0.03%)
NASDAQ: 6,102.66, +1.90 (0.03%)
S&P 500: 2,399.38, +0.09 (0.00%)
NYSE Composite: 11,595.26, -20.35 (-0.18%)

Stocks Rally Friday to End Week Positively

The reaction wasn't immediate, but Wall Street eventually responded to the April non-farm payroll result, registering solid gains into the close of trading Friday.

The BLS reported a gain of 211,000 jobs for the prior month, well above estimates which called for a figure of 180,000. Coupled with the Fed keeping interest rates on hold for the time being, stocks finished the week with solid gains, marking the third straight week that stocks finished positively.

Some skepticism remained as the March payroll numbers were downgraded further, from 98,000 to a disappointing 79,000.

Still, the solid showing on Friday put all the major indices into positive territory for the week, all closing near all-time highs.

How long the love-fest with stocks can continue is anybody's guess, but it appears nobody is giving up gains at this juncture.

At The Close, 5/5/17:
Dow: 21,006.94, +55.47 (0.26%)
NASDAQ: 6,100.76, +25.42 (0.42%)
S&P 500: 2,399.29, +9.77 (0.41%)
NYSE Composite: 11,615.61, +80.90 (0.70%)


For the Week:
Dow: +66.43 (0.32%)
NASDAQ: +53.15 (0.88%)
S&P 500: +15.09 (0.63%)
NYSE Composite: +79.51 (0.69%)

FOMC Keeps Fed Funds Rate Unchanged; Stocks Look Elsewhere

As expected the FOMC of the Federal Reserve took no action on interest rates Wednesday, concluding their two-day May meeting.

The federal funds rate remained at 0.75-1.00% for now, though analysts expect the Fed to raise rates twice more this year, most likely at the June and September or December meetings.

While the Fed wants to raise rates in order to have some ammunition to stave off any chance of a recession, the thinking is somewhat backwards. One would normally raise rates in good times, to keep the economy from overheating. Increasing the cost of borrowing in a stable environment might produce exactly what the Fed is fighting - an economic downturn.

Skepticism is high over the Federal Reserve's actual control of the economy beyond their massive "investments" and liquidity injections over the past eight years since the GFC. Now that the Fed has done its job, the ECB and Bank of Japan have picked up the slack with hefty asset purchases. How these central bankers intend to wind down their bloated balance sheets without causing severe oversupply is a question that remains unanswered, thus the nervousness within what is, after all, the second-longest bull market in history.

At the end of the day, only the Dow finished positive. The other major markets were marginally on the downside.

At the close, 5/3/17:
Dow: 20,957.90, +8.01 (0.04%)
NASDAQ: 6,072.55, -22.82 (-0.37%)
S&P 500: 2,388.13, -3.04 (-0.13%)
NYSE Composite: 11,529.66, -21.64 (-0.19%)

Wall Street Frowns Over No Government Shutdown, 0.7% GDP Growth

The morons elected officials occupying the nation's capitol decided to punt on Friday, issuing a continuing resolution to keep the federal government operating for another week, rather than risk a government shutdown (which isn't really a shutdown), but Wall Street seemed unimpressed by their shenanigans.

Stocks closed lower on Friday, possibly as a form of relief after massive gains earlier in the week, finishing with minor losses, but with their second straight weekly gain.

After what promised to be a week of rancor and argument turned into a mere smattering of name-calling and finger-pointing, investors seemed unfazed by what didn't happen in Washington. The first estimate of first quarter GDP also added to the disappointment, coming in at the worst in three years, showing paltry 0.7% growth. That probably had more to do with Friday's decline than anything the government did or did not do.

The poor reading on the economy follows a similarly bad reading in the March non-farm payroll report, which showed the US economy stalling out a bit, adding just 98,000 jobs, a big miss on rosy estimates.

If the overall economic figures continue to flag, it will be difficult for the Fed to raise interest rates any further and probably not at the May FOMC meeting, which happens to be this week, Tuesday and Wednesday, May 2 and 3. A stalled-out economy may also keep the Fed on hold until the fall. The FOMC meets on June 13-14 and again on July 25-26. After that, they don't meet again until September.

The politicians have failed to pass any meaningful legislation, ObamaCare is still the law of the land, the congress continues to borrow money despite the highest tax receipts in history, and, if not for steady winnings in stocks, the American people would be up in arms over the lack of purpose and dignity in the halls of congress.

If, by some stroke of good fortune, the government would cease to exist on a semi-permanent basis, it might spark a rally on Wall Street the likes of which have never been seen. Since what the current federal government consists of does nothing for the betterment of the American citizen, perhaps it should declare itself ineffective and incompetent, and finally shut itself down.

We can only hope...

At the Close, 4/28/17:
Dow: 20,940.51, -40.82 (-0.19%)
NASDAQ: 6,047.61, -1.33 (-0.02%)
S&P 500: 2,384.20, -4.57 (-0.19%)
NYSE Composite: 11,536.08, -42.44 (-0.37%)

For the week:
Dow: +392.75 (1.91%)
NASDAQ: +137.08 (2.32%)
S&P 500: +35.53 (1.51%)
NYSE Composite: +146.95 (1.29%)

Wall Street Stalling As DC Politicians Fight Over Nothing, Threaten Shutdown

The NASDAQ recorded another record close (6,048.94), but stocks struggled to remain positive Thursday as politicians in Washington continued to wrangle over funding the government and a potential vote on a replacement for Obamacare.

Democrats have called for a government shutdown if the Republicans bring a health care bill to the House floor before passing a continuing resolution for federal government funding.

This seems to be all that the politicos in Washington - and, apparently, the wizards of Wall Street - care about at present, though first quarter corporate earnings continue to be largely impressive.

Amazon (AMZN) and Alphabet, parent of Google (GOOG), released impressive first quarter results. Both stocks were up sharply on the day, but there was little luster elsewhere.

With gridlock having become the norm for the sacred cows of congress, investors need to begin looking beyond the sham that is government, which loses money all the time and is generally a burden to taxpayers rather than a benefit, for other catalysts to keep the eight-year bull market ramping along.

Nothing good is going to come out of Washington, DC, for the foreseeable future. Investors should turn a blind eye toward the nation's capitol and focus in on business, the true creator of capital.

At The Close, Thursday, April 27, 2017:
Dow: 20,981.33, +6.24 (0.03%)
NASDAQ: 6,048.94, +23.71 (0.39%)
S&P 500: 2,388.77, +1.32 (0.06%)
NYSE Composite: -11,578.52, -14.39 (-0.12%)

Stocks Rally As No Government Shutdown Seen; NASDAQ At Record High

Closing at as record high, the NASDAQ powered through the 6000 mark while the Dow and S&P 500 had their best back-to-back sessions of the year.

Investors appear to be pleased with the progress in Washington toward a peaceful resolution to the budget, in which the congress must fund the government by Friday night or be forced to close down parts of the federal apparatus.

Key to the negotiation has been President Trump's masterful handling of the situation, saying he can wait until later in the year to get congress to partially fund the building of the wall between Mexico and the United States on the US southern border. Democrats have already cried wolf over the measly $1.3 billion that would need to be appropriated to get the project into planning stage. Trump, knowing that a government shutdown would be blamed on Republicans, backed off his demands in order to attain at least a limited peace with the obstructionist Democrats.

This master stroke by Trump left investors giddy with confidence that the government will function without interruption. Also aiding the rally was a spate of earnings, notably by McDonald's, which suggested the economy is on a solid, growing footing.

Though the bull market which began in March of 2009 seems to be getting long in the tooth, the expansion due to Trump policies may just be starting.

At the Close, Tuesday, April 25, 2017:
Dow: 20,996.12, +232.23 (1.12%)
NASDAQ: 6,025.49, +41.67 (0.70%)
S&P 500: 2,388.61, +14.46 (0.61%)
NYSE Composite: 11,603.28, +71.49 (0.62%)

Stocks Make Third Weekly Gain In Last Seven; Government Shutdown Looms; Central Banks On Buying Spree

Stocks fell softly to close out the week, but ended with the third weekly gain in the past seven, the major averages having hit something of a speed bump of late what with the wranglings and do-nothings in Washington DC, heightened military potentialities in the Mideast and Pacific Rim (North Korea), sloppy economic data, the passing of the income tax filing deadline, and the non-stop media parade of fake news mostly designed to undermine the presidency of one Mr. Donald J. Trump.

While the overall tone of the market is nothing to get aroused over, the upcoming week could bring some more sobering developments as congress returns from a two-week vacation (a vacation from doing nothing) coinciding with Spring Break. One wishes the congresspeople well enough, but actually doing something to benefit the American public for a change would be welcome. While President Trump is trying his level best, the Democrats and their trainers in the media complex are simply playing in an alternate universe and at times coming close to treasonous actions by working against the best interests of the Republic and focusing solely on what they consider the primary interest of their party.

As the coming week progresses, the level of rancor and obtuseness could reach a fever pitch as the government faces a deadline on April 28 for some kind of budget agreement, or, more likely, another in a too long series of continuing resolutions. Both sides of the debate over what to overspend upon are already well-suited in their peculiar ideological jumpsuits, the Democrats desperate to hold onto the last vestiges of failed socialism (called progressive by the liberal left and ultra-left media), the Republicans - in congress at least - looking to cement their dicey majorities in both houses.

At the outside looking in is the current administration, bent on keeping at least some of the promises Mr. Trump made during the campaign, though reneging against the American people has become so common in the post-Vietnam era that it's almost laughable that anyone would believe a word coming from the lips of any politician in Washington.

Thus, a government shutdown looms a real possibility, though more likely a dramatic, last-gasp, late-into-the-night-made-for-TV deal is probably what's driving the phony debate. As the politicians pose and posture, many American citizens are becoming keenly aware that federal government budgets are a laughable charade, being that deficits continue on and beyond the horizon, the national debt already within $16 billion of $20 trillion, a condition only humans could have created and something only a government with all the fiscal discipline of a 12-year-old with dad's credit card could continue.

At the end of the debate, shutdown, or partial farce, the world will continue spinning, Americans will be the bag-holders of the century and the central bank ponzi will continue.

Holders of stocks should worry the least, since the Bank of Japan (BOJ) and the European Central Bank (ECB) "invested" over ONE TRILLION US DOLLARS in global financial instruments in the first four months of the year, a record amount. Certainly, the Fed and Bank of England - not to mention the Swiss National Bank - are quietly doing their part to keep the liquidity flowing in the background, using all manner of underhanded tactics to undermine every national currency available.

The policy of central bank asset-grabbing is unprecedented in financial history, though rather a common theme since the meltdown of 2008-09.

In the end, 98% of the world's population will own almost none of the assets, the central banks having snatched up anything that hasn't already been bolted down, and they're sure to use wrenches and sledgehammers to take whatever remains as well.

Though the times are trying, central bankers continue buying.

At the Close, Friday, April 21, 2017:
Dow: 20,547.76 -30.95 (-0.15%)
NASDAQ: 5,910.52, -6.26 (-0.11%)
S&P 500: 2,348.69, +-7.15 (-0.30%)
NYSE Composite: 11,389.13, -37.78 (-0.33%)

For the week:
Dow: +94.51 (0.46%)
NASDAQ: +105.37 (1.82%)
S&P 500: +19.74 (0.85%)
NYSE Composite: +65.60 (0.57%)

Stocks Surge, But Indecision Remains

This market cant seem to make up its mind.

At least that's the impression from the past few days of trading - or even the past eight weeks - which has seen the major averages whipsawed by varying reports of Trump administration plans, key industry data, jobless claims, and the all-important stance by the Federal Reserve on raising the federal funds rate.

On that last point, the recent March non-farm payroll data should have put the kibosh on any rate hikes until at least July, and that's the thinking of most of the Wall Street analysts, who actually get it right some of the time.

With just Friday remaining, unless stocks are donw close to one percent on the day, the week will finish positive, though it would be only the fourth positive week in the last eight, another sign of indecision.

At the Close, Thursday, April 20, 2017:
Dow: 20,578.71, +174.22 (0.85%)
NASDAQ: 5,916.78, +53.74 (0.92%)
S&P 500: 2,355.84, +17.67 (0.76%)
NYSE Composite: 11,427.73, +85.31 (0.75%)

Stocks Split, But Down On The Main; Valuation Could Be At The Root

Something is upsetting the markets, but it's difficult to find an appropriate culprit for the current nausea.

Maybe it's an overhang from tax filing day, even though that is now two days in arrears, still, the amount of taxes Americans pa to federal, state, and local governments has probably never been higher. If taxes rates are not the largest they've ever been, they're certainly close to being so.

It takes 113 working days for the average American worker to earn enough money just to pay off the taxman. That day arrives - for most people - around mid-May, so perhaps the realization that one hasn't yet worked enough just to stay even with the bloated governments that regulate every conceivable activity might be a cause for upset.

Falling stock prices cannot be attributable to the current employment situation because we've been told over and over again that there are plenty of jobs in America. What we're not told is that many of those jobs are part time,
or low-paying, or otherwise dissatisfying. So, maybe it could be that.

One doesn't see to many corporate CEOs suffering, so there is virtually no possibility that these titans of industry are panic selling their shares.

What could it be?

Maybe the idea that stocks are currently trading at some of the highest valuations in history is giving some with more savvy investing skills than the average fund manager cause for concern. These people have seen tops and bottoms before, so they might just be looking for an exit and these high prices seems like a good place to take one's leave, or, as the case may be, profits.

If that's all there is to the sideways trading since mid-March, then it's probably not much to worry about, unless one is looking for a place to invest. In that regard, buying would be quite out of the question, thus solving our quandary: there are more sellers than buyers.

It could be that simple.

At the Close, Wednesday, April 19, 2017:
Dow: 20,404.49, -118.79 (-0.58%)
NASDAQ: 5,863.03, +13.56 (0.23%)
S&P 500: 2,338.17, -4.02 (-0.17%)
NYSE Composite: 11,342.42, -36.16 (-0.32%)

Stocks In Spring Funk, Well Off All-Time Highs

Monday's big rally failed to inspire much confidence as the major averages fell sharply on Tuesday, giving back most of the gains from the prior session.

If it seems that stocks have hit a wall or are in stall mode for the present, it's because they are. The last all-time high close on the Dow Jones Industrial Average was March 6, when the bellwether ended the day at 20,954.34.

The other averages have been in similar holding patterns, though the markets overall - despite their closeness to record levels - do not appear very fragile. It's just that there isn't very much velocity or volatility, and even with first quarter earnings thus far somewhat positive, they haven't supplied a catalyst to move stocks out of a Spring funk.

Without a clear case for an upside move, speculators may be looking more to politics for a positive tone, but the rancor in Washington has been at near-deafening levels since the inauguration of Donald Trump in January and the Democrats seem to be dug in to obstruct any and all of the President's agendas.

China and Russia moving troops to the borders of North Korea, along with US warships steaming towards its coast, probably has dampened investor appetite as well.

But that's all for the time being. Economic data is pointing to more of the same, a slow, dolorous economy that isn't making anybody happy, least of which are the governors of the Fed, who wish to see more robust job creation and some pricing power by corporations, but, exclusively in the latter case, are seeing the opposite. Consumers are no longer the suckers they once were, and are beginning to demand value for their dollars. Retailers and restaurants - the front lines for consumer inflation - have been feeling the pinch, with many regional and national chains already engaged in a pitched price war.

That kind of activity can only go one way, and it's not the way of inflation. Bond sellers are a happy bunch for this, with prices for their offerings high and yields down.

Trump may want to make America great again, but it may have to start with better deals for consumers.

At the Close, Tuesday, April 18, 2017:
Dow: 20,523.28, -113.64, (-0.55%)
NASDAQ: 5,849.47, -7.32 (-0.12%)
S&P 500: 2,342.19, -6.82 (-0.29%)
NYSE Composite: 11,378.58, -48.50 (-0.42%)

Stocks Bounce Higher After Long Weekend; Bond Yields Smashed

Apparently, there was so much pent up demand for overpriced stocks that all the major averages posted nearly one percent gains.

Surely, this has something to do with the failed North Korean missile launch on Sunday, though there might be some Russian involvement in stocks going higher.

Then again, it just might be that speculators are taking one final dive into equities before this year's official federal income tax deadline (April 18), getting all they can out of super low interest rates.

Speaking of interest rates, the officials over at the Federal Reserve must be highly perplexed, with the 10-year note resting comfortably at around 2.20% yield. Somebody's happy, but surely not the millions of retirees who pine for the days when banks paid five percent interest on savings.

Those days are long gone, but the party continues. Hyperinflation for the win?

At The Close, Monday, April 17, 2017:
Dow: 20,636.92, +183.67 (0.90%)
NASDAQ: 5,856.79, +51.64 (0.89%)
S&P 500: 2,349.01, +20.06 (0.86%)
NYSE Composite: 11,427.08 +102.55 (0.91%)

If The Fed Is Upset On The CPI Drop And Stubbornly-Low Interest Rates, It Must Be A Good Friday

It's Good Friday and some of us have just finished doing our taxes (such as this writer), so, some of us are wondering what's so good about this particular Friday.

Aside from the generally-obvious religious conventions (Shouldn't it be called Bad Friday because it's the day Jesus Christ was crucified, and that doesn't seem so good?), there probably are some good things afoot.

First, the financial markets are closed, always a bonus. Second, the Labor Department announced today that the Consumer Price Index (CPI) dropped 0.3 percent, the first decline since February 2016. They said that lower cell phone service and gasoline costs outpaced higher rents and a slight increase in food costs (0.3%).

If those food costs are to be believed, since the amount of food most people eat (and buy) can be self-regulated, higher food costs aren't really an issue at all, especially since practically nobody in America is starving at the present time.

This CPI number brings up some interesting possibilities. If the United States is actually experiencing deflation (or, as the TV pundits like to call it, because deflation is bad, you know, "disinflation") then prices are going down, everything is going to cost less. That's the bane of a strong dollar. Imports are cheaper, and, in an economy that relies on lots of imports, that drives domestically-produced goods and services down as well.

It's a win-win-win for everybody, except, possibly, the Federal Reserve, banks and bond investors who are getting anxious and perhaps a bit desperate for higher interest rates.

Well, crocodile tears are the order of the day for them. Higher interest rates are not going to happen unless the economy is strong, meaning many excess jobs are being created, pushing wages higher, and producers are experiencing strong pricing power. Both of those items - jobs and pricing - seem to be going in reverse over the short term. Bond prices have been soaring because yields have been stubbornly opposed to any kind of rise, the now nearly constant urging and jawboning from the genii at the Federal Reserve, Janet Yellen, Stanley Fisher, et. al. notwithstanding.

The 10-year note is hovering around 2.25% yield. That doesn't bode well for inflation. No, not at all.

Stocks were lower for the week, but they're still within a few percentage points of all-time highs. Rich people and people with 401k or pension plans are probably not very concerned with their stock holdings.

In conclusion, this may actually be a pretty good Good Friday after all. Cheaper gas and phone service is a plus and eating a little less is probably not a bad idea in a nation of fatties. Plus, if the people over at the Fed are perplexed or constipated or otherwise annoyed or agitated, that's a huge bonus.

Happy Easter. Don't eat too much ham, lamb, or hard-boiled eggs.

At The Close, Thursday, April 13, 2017:
Dow: 20,453.25, -138.61 (-0.67%)
NASDAQ: 5,805.15, -31.01 (-0.53%)
S&P 500: 2,328.95, -15.98 (-0.68%)
NYSE Composite: 11,324.53, -98.64 (-0.86%)

For the Week:
Dow: -202.85 (-0.98%)
NASDAQ: -72.66 (-1.24%)
S&P 500: -26.59 (-1.13)
NYSE Composite: -121.05 (-1.06%)