Turnaround Tuesday Wipes Out Massive Stock Gains; Oil Lower; Gold and Silver Nearly Unobtainable

Turnaround Tuesday certainly lived up to its advance billing as stocks performed a midday about-face, giving up expansive gains - the Dow gave up over 900 points from its intraday peak - to end near the flatline, only the NYSE Composite finishing in the black.

With a massive gap up at the open, equities were riding the crest of Monday's monstrous wave of buying, on the false hope that the worst of the coronavirus pandemic was behind them. At 11:25 am ET, when New York City announced its death toll for the prior day as the highest one-day total to date with 731 fresh corpses, bringing the state total number of coronavirus fatalities to 5,489, surpassing those lost on 9/11, a wave of gloom descended on Wall Street and in trading offices worldwide. Once the news circulated, stocks embarked upon an afternoon of desperate selling.

Whatever it is that fuels the animal spirits of the investor class, it is misplaced and widely mis-pricing stocks presently, and has been for much of the past 11 years. Now that stock buybacks are no longer going to spike the punch in lower Manhattan, the Fed has stepped in with a variety show of programs and debt options, none of which will eventually be proven sufficient to stem the coming tide of lowered expectations, defaults, earnings misses and downright deplorable economic data.

All the Fed is doing is throwing more bad money atop a raging fire. They cannot print enough money globally to stop the coming self-inflicted Greater Depression, though they will surely blame everything on COVID-19, the convenient scapegoat.

Now that stocks have briefly recovered from the March selloff, all of the programs brought to light by the Federal Reserve will be viewed skeptically, as real values make their return to the former fantasy world of finance. Instead of the Dow resting comfortably above 22,000, the true value, when all is said and done will be much closer to 12,000 and likely far lower.

At current levels, the major indices are still higher than they were in 2007, before the Great Financial Crisis nearly wiped out the global economy. The ongoing crisis will assure that everybody loses, particularly the Baby Boomer generation, which was forced into stocks by the Fed's insistence on interest rates near zero for almost all of the current century.

Portfolios which were valued as retirement savings are going up in smoke and they will continue to do so as the crisis and antecedent solutions tear to shreds the dreams and aspirations of the enormous, aging generation. Unless one has already departed the stock market, anticipated losses will be catastrophic.

Elsewhere, bond yields ticked slightly higher on Tuesday. Gold and silver remain in a nascent bull market, as a global scramble for precious metals has left major dealers with dwindling or already depleted stock. Spot and futures prices are diverging in gold, but that's not even the real story, as premiums are going through the roof for gold and silver bars and coins. If one is fortunate enough to find a dealer with goods for sale, wait times for delivery are now averaging a month for silver in quantity, and five to 10 days for gold.

In times of panic, precious metals are desirous as a hedge against catastrophic circumstance, but, already, many have arrived at the decision to acquire such stock too late as prices have become unaffordable and physical delivery unobtainable.

On the oil front, the spasm of price hikes from last week has faded badly, with WTI crude down again, backing into a $24 handle per barrel. As they say in the trade, it's a fluid situation.

Finally, and this is not to be taken lightly, an astute commentator on a popular financial website posted the following cryptic message:

I don't think any bankers will go to jail, but I assure you they will meet with other, more horrible circumstances as this all plays out.

Citi, BofA, JPM Chase, Wells, Goldman Sachs, and others are all underwater, have already been bailed out (for the past 11 years), and will soon be insolvent when millions of Americans (and a host of foreigners) default on credit cards, car loans and leases, commercial leases, student loans, personal loans, business loans, and more.

There are a lot of biblical posters around here who quote Revelations and such, but they are off the mark. Judgement Day for the major commercial banks was delayed in 2008-09, but, when the full temper of anger from the American public is released - and that is not far off - their branches will be firebombed, their insurance cancelled, their stocks worth less than zero.

They've had it coming and whether they've calculated the enormity of unintended consequences or not, they're going to get skewered for good.

It will be a feast like no other, and a jubilee.

At the Close, Tuesday, April 7, 2020:
Dow Jones Industrial Average: 22,653.86, -26.13 (-0.12%)
NASDAQ: 7,887.26, -25.98 (-0.33%)
S&P 500: 2,659.41, -4.27 (-0.16%)
NYSE: 10,537.04, +21.80 (+0.21%)

Stocks Rocket Higher on Hopes COVID-19 Threat Has Peaked; Gold Silver Remain in Short Supply with Hefty Premiums

According to Wall Street, the COVID-19 coronavirus crisis is all but over.

Stocks were being bought as if there weren't going to be any more available on Monday, as news spread that the coronavirus outbreak may have peaked in New York, which has been the epicenter of the crisis. Of the 367,758 confirmed cases in the United States, 130,689 are in New York state, mainly in the most populous part, New York City.

The state of New York accounts for 35% of the total cases in the US.

4,758 of those have resulted in death, a full 44% of the entire US death toll of 10,831.

What triggered the giddiness in the markets was the number of confirmed cases in New York falling for three straight days, though the 8,000+ increase from April 5 to April 6 was still a very large number.

There's no need for analysis of how the stock algorithms took the headlines. The 7.73% gain on the Dow Jones Industrial Average is proof enough that investors (or, at least the algos that guide the trades) believe the worst of the crisis is past.

This could be a case of some whistling past the graveyard, however, as the aftereffects from a near-nationwide lockdown and closure of many businesses have yet to be felt. The promised $1200 checks for most Americans haven't even begun to be distributed, which is causing more than a little consternation in many households which have been forced to work from home.

Along with kids out of school and assorted other odd conditions of voluntary confinement, millions of ordinary Americans have put up with the condition for over three weeks and are finding that states which did not impose "stay-at-home" recommendations have some of the lowest reported case numbers in the country.

Arkansas, Iowa, Nebraska, Oklahoma, North Dakota, South Dakota, Utah and Wyoming are the eight remaining states without statewide orders after South Carolina's governor, Henry McMaster, ordered all residents of the state to remain at home except for visits with family members or essential outings to get groceries, medicine or exercise, to help slow the spread of the coronavirus on Monday.

South Carolina has 2,232 recorded cases of the virus, comparable to neighboring states North Carolina (2,870), Georgia (7,558), and Tennessee (3,802), all of which have had stay-at-home or similar orders in place for weeks.

Wyoming, with 210 cases documented, is the least-affected in the lower 48 states (Alaska, 191), and has issued only local ordinances. North Dakota (225) and South Dakota (288) are the next-lowest states. Neither of the Dakotas have any restrictive orders in place. The data suggests that the virus, while easily transmitted, is not gaining much traction in places that are sparsely populated and mostly rural. It remains to be seen whether these states will eventually see a huge outbreak from the virus. Only time will tell on that account.

For the majority of people outside of city centers, the virus has proven to be an annoyance, exacerbated by public officials wishing to appear concerned and active in fighting the spread.

With a death toll not even having approached the usual count from ordinary flu (about 40,000 in a typical season), there's growing pressure on the White House and governors to lift some restrictions and get people back to work. According to recent timelines, the country as a whole is within two weeks of the peak, if not already having reached that point.

With more than 10 million having already applied for unemployment insurance over the past two weeks, it's a near certainty that the number will ratchet higher when new claims numbers are released this Thursday.

The White House - which originally was considering a death toll of two million - has lowered its estimate on the number of deaths to 100,000 to 200,000 as the pandemic takes its toll. If the final tally comes in under the low of 100,000, there will likely be widespread criticism of the government effort, which may have saved some lives but crippled the economy, almost certain to enter a recession.

On the day, oil, after blistering gains last week, settled down, pricing around $26.40 per barrel for WTI crude. The price peaked Friday at $28.86.

The big move in stocks helped stall the rally in treasuries, though not significantly. The benchmark 10-year note moved five basis points, as yield increased from 0.62% to 0.67%.

Gold rallied throughout the day, ending at $1660.70 in New York, while silver also caught a bid, rising from $14.40 to $15.01 on the spot market. Prices for physical metal at the biggest dealers remains well above those quoted prices and delivery - due to a shortage - can take as many as 30 to 45 days. Many dealers report sold out inventories of the most popular coins and bars.

The US Mint is offering 2020 one ounce proof Silver Eagles for $64.50 and 2020 one ounce gold proof Eagles at $2,275. Ebay remains the most reliable source for coins and bars with fast delivery times (one to three days, typically).

At the Close, Monday, April 6, 2020:
Dow Jones Industrial Average: 22,679.99, +1,627.46 (+7.73%)
NASDAQ: 7,913.24, +540.15 (+7.33%)
S&P 500: 2,663.68, +175.03 (+7.03%)
NYSE: 10,515.24, +634.61 (+6.42%)

WEEKEND WRAP: COVID-19 Crisis Will Peak Within Three Weeks, but the Economic Crisis Will Continue for Years

(Simultaneously published at Downtown Magazine)

OK, this was a long week, and stocks got clobbered again, but it could have been, and should have been, worse. The main indices were down between two percent (S&P 500) and three percent (NYSE Composite). For most citizens of the world who are under forced quarantine, the week was a painful experience. The vast majority of people would just like to be back at work, earning a living to support their families. The partially-manufactured COVID-19 crisis is keeping most of the developed nations' economies and people in lockdowns, on purpose, to impose government will over everyday people.

It's a shame how many will be cowed by government and led to believe the many lies that have been perpetrated during this period.

The beginning effects of the Fed backstopping companies has already been noticed. Some dime-store variety stocks were being bid up as the rest of the market was heading lower through the week. Companies (no names, for now, until more than a few weeks data is collected) evidenced buying at stop loss triggers. Not many were allowed to fall to anywhere near the recent lows.

Stocks should get another taste of selling in the coming week, as most of the news will be about overloaded hospitals, stressed out medial workers, press conferences by the president and his "team." It will be interesting to note how hard the Fed works to stave off a return to 18,212 on the Dow and similar drops on the other indices. They will likely keep losses to a minimum. It would not surprise at all would stocks stage another rally.

The treasury yield curve is about as flat as it can be, signaling nothing good. 115 basis points, or, just more than one percent, covers the entire complex from one-month bills (0.09% yield) to 30-year bonds (1.24%). The 10-year note is flatlining at 0.62%. The Fed, via its SPVs (Special Purpose Vehicles) is desperately buying commercial paper, in addition to treasury bonds, agency mortgage-backed securities, ETF paper, and municipal bonds. They're busy buying up the world's debt with the only currency that matters, the US dollar, conjured up daily out of thin air. The Federal Reserve's balance sheet has ballooned to nearly $6 trillion in their attempt to blow the global credit bubble a lot larger.

Oil caught a huge bid after President Trump supposedly brokered a deal between the Saudis and the Russians, making a record gain on Thursday and another huge leap forward in price on Friday. While there is rampant skepticism over whether there is any kind of deal afoot (the Saudis denied it), the recent price jump - WTI crude went from $21.76 per barrel on Wednesday to a high of $26.35 Thursday, and closed out Friday at $28.34; Brent went from $26.90 to $34.11 over the same span - is unlikely to be long-lasting. Until the Saudis and Russians have eliminated 50-60% of the shale drillers in the US, there aren't going to be any concessions. Additionally, the rampant supply glut and limited demand should keep the price around $20-24 per barrel.

Gold and silver continue to decouple from the fraudulent futures prices. Gold settled out just below $1600 the ounce, silver about $14.00. For real prices on physical silver and gold, one must go to eBay of all places, where there is a wide-open market for coins, bars and assorted bullion. An ounce of gold is ranging between $1800-$2000, while silver cannot be had for under $22 per ounce. These are the real prices, and are heading up quickly because demand is through the roof, many miners are idled, reducing supply, hoarding is rampant, and delivery times from established dealers (30-45 days in some cases) cannot match the one-to-three day deliveries by independent eBay sellers, and those prices have built into them a 10% commission to eBay and do not include shipping, which only adds to the real prices.

There's a definite possibility that the COMEX and LBMA will soon be disregarded completely and a free, open, un-manipulated market will emerge at the world's biggest online bazaar and elsewhere on the internet as fiat currencies are inflated away and real money begins to take root at the consumer level.

Random Notes and Recommendations

JP Morgan put out a study which concluded that the world will be on the downside of the case infection rate curve in two months. Rubbish. Check out this site for the US:

http://covid19.healthdata.org/projections

The United States will be peaking and on the downslope of the curve within 2-3 WEEKS, not 2 months, and European nations are already on the downslope.

All the noise over ventilators, on which two-thirds of the people die anyhow, is just wasted time and money. The small business "loans" are garbage, full of loopholes and boondoggles for small business.

As usual, Wall Street got their trillions in the blink of an eye. American citizens will have to wait until the government gets around to figuring out how to pay them their $1200. Average time, from right now, 3-6 weeks.

Gee, thanks for helping us all out.

Open up MLB. It would be nice to see the some home runs, swings and misses, stolen bases, sign-stealing, and all that good stuff by May 15 at the latest. Even a shortened season would be acceptable. Americans, average Americans are the ones who deserve all the credit. They took social distancing and stay-at-home seriously, which was very helpful in slowing the spread of COVID. We should all get $10K, and Wall Street nothing, because those companies contributed nothing, and most of the companies getting bailout money do nothing. The people should revolt once this is over.

The government, local, state, and federal are the destroyers of liberty. All of them are worthless parasites and when this is all over they'll all pat themselves on the backs for doing such a bang-up job, when, in reality, it was mostly a big hoax.

Here is an exceptional interactive chart which shows the curve (the one we're actively flattening by social distancing and other mediations) in the United States and in every state individually, with figures for numbers of beds, ICU beds, and ventilators needed and available.

It clearly shows the curve peaking between April 15 and 21. The response curve will peak first, followed quickly by the number of COVID-19 cases curve. After that, it's all downhill for the dangerous pathogen that has disrupted lives and economies worldwide.

Brent Johnson's Dollar Milkshake Theory

Brent Johnson is CEO of Santiago Capital. He has been creating and managing comprehensive wealth management strategies for the personal portfolios of high-net-worth individuals and families since the late 1990s.

If you watch no other video on money, gold, or finance, this is the one you definitely should see.



Also, Mike Maloney's GoldSilver.com is an excellent resource. Recently, Mike has been doing pretty much daily videos with consolidated information from a wide variety of sources, funneled through his intuitive, calculating mind. Here is a recent entry with some revealing charts by the incredible analyst John Hussman, another number-crunching maniac who's been studying and disseminating information on the economy in a series of market commentaries at his Hussman Funds website.

Here is Mike Maloney's April 3rd video:



Make sure to get Mike's free e-book, Guide to Investing in Gold & Silver, the #1 All-Time Bestseller On Precious Metals Investing, available at his site.

At the Close, Friday, April 2, 2020:
Dow Jones Industrial Average: 21,052.53, -360.87 (-1.69%)
NASDAQ: 7,373.08, -114.23 (-1.53%)
S&P 500: 2,488.65, -38.25 (-1.51%)
NYSE: 9,880.63, -181.77 (-1.81%)

For the Week:
Dow: -584.25 (-2.70%)
NASDAQ: -114.23 (-2.53%)
S&P 500: -52.82 (-2.08)
NYSE: -306.58 (-3.01%)

Government Deception, Corruption and Incompetence Are Killing Developed Nations

(Simultaneously published at Downtown Magazine)

A long-standing tradition in sales and business is "underpromise and overdeliver," the point being that respect comes from making good on your commitments. Analogous to that is the time-honored adage, "don't promise what you can't deliver." This is basically Business 101. Donald Trump knows that. Treasury Secretary Steven Mnuchin knows it as well.

One has to wonder at the stunning lack of discipline coming out of the White House and Treasury in response to the $1200 checks or direct deposits promised to "nearly all Americans" two weeks ago, now that a memo from the House of Representatives says that some people will have to wait as long as 20 weeks to receive their government stipend.

Meanwhile, Treasury and the Federal Reserve have been doling out trillions of dollars to unhealthy banks and corporations in a last-ditch effort to avert a complete economic meltdown and stock market crash. As is usually the case, Wall Street gets the money immediately, putting taxpayers on the hook, and the citizenry gets shafted.

It's disgusting, nauseating, criminal.

The Federal Reserve and Treasury Department are skirting the law in regards to handouts to major corporations in the form of bond-buying and other stimuli. The Federal Reserve is chartered to purchase bonds backed by the federal government. The have put the Treasury, using the Exchange Stabilization Fund, up as a Special Purpose Vehicle (SPV) in a first-loss position, to expedite the buying of commercial paper, asset-backed securities, ETF paper and the like. Blackrock will do the actual buying, even to the point of purchasing their own debt. Jim Bianco, in a Bloomberg editorial from March 27, lays out the dangerous route upon which the Fed and Treasury have embarked.

America the Beautiful is being turned into a freak show. The solutions provided at the top level of government are devoid of lawfulness, trampling on the constitution like an well-worn carpet, all over a virus, COVID-19, that can be mostly prevented with Vitamin C, D, and Zinc, and the worst effects ameliorated with chloroquine or combining hydroxychloroquine with the antibiotic azithromycin, but you won't hear that, see that, or read that on any of the mainstream media outlets, despite FDA approval of chloroquine as a treatment for COVID-19.

Markets reacted positively on Thursday to news that 6.6 million Americans filed for unemployment benefits last week. That's right. Stocks rallied off that news. Maybe if a few hundred thousand die from the disease stocks can surpass the all-time highs made in February.

What's happening in the United States and probably to a greater degree in Europe is the destruction of the global economy. Nothing makes any sense in all this. Why do Americans have to stop going to work, close businesses, and stay home for six weeks when the outcome of 80-90% of the people who are infected are mild and the overwhelming evidence shows that the vast majority (90-95%) of people who die from aftereffects of the coronavirus had other health issues - comorbidities?

America is being torn apart at the seams, all under the guise of protecting the people. That's what the American public is being told, the media is up to its eyeballs in it and the government is taking away rights and assuming more power than ever before. In six months time, the United States will have undergone a remarkable transition from a capitalist democratic republic to a fascist regime, where big business and government are bound at the hip.

There's no point in analysis of markets anymore. They're all broken. The New York Fed owns the stock market. Treasury yields have already turned negative for a time last week and will likely do so again. Gold and silver futures have completely decoupled from the reality of physical metal prices. Oil is stuck at $20 per barrel unless the president insists that he made deals with the Saudis and the Russians, two parties which are more than happy to put the screws to Mr. Trump and the shale oil drillers in America.

It was a nice country, America. Too bad it had to die this way, at the hands of psychopaths in government, many of whom, by the way, profited nicely before, during, and after the market turmoil. Practically every member of congress should be indicted for insider trading. They all knew this was coming, but allowed nearly unlimited travel into and out of this country for weeks while the virus was raging. They continue to not advise everybody to wear a mask, a solution too simple for their twisted minds to consider. The countries with the best results - China, South Korea, Japan - have 100% of the population wearing masks.

The world's people are being lied to on a grand scale. Get used to it.

All of this could have been avoided, but, that wasn't the plan. The plan is to inflict maximum pain on the citizens of every developed nation, and it's working.

At the Close, Thursday, April 3, 2020:
Dow Jones Industrial Average: 21,413.44, +469.93 (+2.24%)
NASDAQ: 7,487.31, +126.73 (+1.72%)
S&P 500: 2,526.90, +56.40 (+2.28%)
NYSE: 10,062.37, +217.52 (+2.21%)

6.64 Million Unemployment Claims; Stocks Take a Hit; Gold, Silver Selling at Premium

(Simultaneously published at Downtown Magazine)

Wednesday was April Fool's Day, appropriate for the general public, which is being actively conned into giving up civil liberties at an alarming rate, and also for those who are stuck in passive investments like college or retirement funds, as stocks got hammered again on the day.

Meanwhile, mega banks and major corporations, which gorged themselves on stock buybacks and executive bonuses over the past decade, are being rewarded for their insouciant, self-serving behavior with loans and grants from the Treasury and Federal Reserve, which are rapidly coalescing into a single entity.

Since completing a near-perfect Fibonacci retrace of 38% to the 22,500 level on the Dow (22,552.17), the blue chip index has given up more than 1,500 points over the past two sessions and are threatening to retest the lows of March 23 (18,213.65). ADP private payroll data released Wednesday showed job losses of 27,000, which did not include the end of March when most of the recent layoffs and furloughs occurred. Despite exception of the brunt of a widespread voluntary quarantine imposed by most states the number was the first time ADP reported monthly job losses since 2017. Their next data release is expected to be much more sobering.

With the Federal Reserve firmly in control of the stock and bond markets, equity prices still have a long distance to travel on a downward slope to reach any reasonable level of valuation. While most heavily-traded stocks were wildly overvalued they are still trading at unsustainable levels, especially considering that business and commerce has very nearly ground to a halt globally.

There will be questions about the level of involvement in equity markets by the Fed, especially on days like Wednesday when losses cascaded down the wall of worry. While it's certainly the case that the Fed could buy up all the ETFs, stocks and mutual funds it pleases, their main approach is in the bond market, where they are actively purchasing commercial paper through its proxy, the Treasury. Guaranteeing that the corporations represented in the NASDAQ, Dow, S&P, and NYSE are still able to finance continuing operations is of primary concern. Price levels of individual stocks or even whole indices are of a secondary nature. Massive gains will be available to the Fed and their insider (congress) associates once stocks are reduced to a massive junk heap of debt, enriched management, and damaged operations.

Currently being touted by the financial insiders is the notion that the stock market and the nation will bounce back quickly once the coronavirus is conquered, though that concept is fatally flawed for a number of reasons. First, the goal is to have zero deaths from COVID-19, a near impossibility given that the infection number has not even cracked the one percent level, with the US currently at 217,000 confirmed cases with 5,137 deaths. Second, many small businesses will not reopen when the "all clear" is given, whether that be at the end of April, or some time in July. Third, with most working-age Americans at home or out of a job, the spending level upon the return to some semblance of normalcy will be vastly reduced. GDP growth is likely to be negative for the second and third quarters and the entire year of 2020 will go down as one in which the US economy was running in reverse.

At this point, anyone who has not taken steps to remove money from the stock and bond markets is facing a world of hurt which could have been avoided. The appropriate investment stance at this juncture would likely be 75% cash and 25% in hard assets (real estate, precious metals). Sadly, the gullible American passive investment class has been conditioned to believe stocks will always bounce back and that bonds represent safety. Neither claim can be proven within the present paradigm. Stocks may bounce back, but that bounce may not occur for many years. Bonds may be safe, but at interest rates that are comparable to stuffing matresses with Federal Reserve Notes. And, it's probably not beyond the realm of probability that the almighty dollar will not survive in its current form. At the very least, as severe devaluation is in the cards.

Treasury yields were smashed lower, the curve significantly flattened on the day, with the 30-year bond at 1.27%, the 10-year note at 0.62%, and the full breadth of the curve a mere 124 basis points, down from 130 a day ago and 145 a week prior. These are serious declines, significant moves in a market that is supposed to be stable. The portent is for more dislocation, desperation, and, eventually, negative rates which will obliterate the currency as is happening in Japan and Europe.

Gold and silver are still largely unavailable from regular dealers even though prices on the futures exchanges are dropping, defying the laws of supply and demand. The best place to purchase precious metals in any form is currently ebay, where the market is brisk and one ounce gold coins can be purchased and quickly delivered for prices between $1690 and $1861 while the futures price hovers around $1590.

Silver is in an even better position for sellers, tacking on premiums of up to 100% to the posted price of $14.25 on the futures exchanges. On eBay, the lowest price for a one ounce coin or bar is currently $21.50, with most ranging from $23.00 to $29.00 and uncirculated coins fetching more, up to absurd prices in the $40 and higher range. With mines shut down in many countries, the shortage of bullion is only just beginning. A metal mania is upon us.

Oil prices have caught bids early Thursday morning, with WTI crude priced at $22.37, Brent at $27.19 at the time of this writing. With a supply glut and the Saudis pumping at nearly-full capacity and offering discounts, it's likely that these prices do not reflect reality on the ground nor are they likely to maintain their gains for long.

As another trading day approaches, regular people may be wondering when they will receive their bailout $1200 check or direct deposit from the government and how they will pay their rent or mortgage without a job or some form of assistance. It has been two weeks since Treasury Secretary Steven Mnuchin and President Trump suggested that individuals would receive money within two weeks and nobody has seen a nickel. The bill to provide such assistance was passed last week by the Senate, House, and signed into law by President Trump.

On Wednesday, Mnuchin announced that Social Security recipients who do not regularly file tax returns will receive their checks or direct deposits without having to file "simple returns" as the IRS advised, according to TheHill.com. An actual date for dissemination of the monies was not disclosed, though it may be assumed that these recipients will receive their money along with their regular monthly payments. For the rest of the country, the waiting game continues, despite corporations already having trillions of dollars available to them via loans, loan guarantees or outright purchases of private debt issuance by the Federal Reserve, most of which is outside the Fed's normal chartered activities.

As for rent or mortgage payments, those are individual decisions. It is advisable to contact the landlord or mortgagee to work out payment options. Some landlords are deferring April rent payments while most lenders (represented in the main by servicers) have remained fairly tight-lipped on general guidelines relating to mortgage payments. Deferral is a likely solution, with the principal and interest being added to the end of the amortization schedule.

Just now, the Labor Department announced that unemployment insurance claims for the week ended March 28 doubled over the previous week to 6.64 million.

April and the second quarter is off to a very discouraging start.

At the Close, Wednesday, April 1, 2020:
Dow Jones Industrial Average: 20,943.51, -973.69 (-4.44%)
NASDAQ: 7,360.58, -339.52 (-4.41%)
S&P 500: 2,470.50, -114.09 (-4.41%)
NYSE: 9,844.85, -457.05 (-4.44%)

Dow, S&P Mark Worst 1st Quarters Ever; Stocks Poised for Lower Open; Gold, Silver Markets in Turmoil

Closing out the first quarter of 2020 with a whimper, stocks opened to the downside, briefly turned positive, but the minor rally quickly fell apart sending the main indices to a close near the lows of the day. On the session, the NASDAQ was the best performer of the majors, the Dow the worst, followed closely by the S&P 500.

Thanks to the Wuhan Flu, coronavirus, COVID-19 or whatever one wishes to call the pathogen making its way around the planet, stocks really took it on the chin to start off the year. The major averages were all lower, even after making all-time highs in mid-February.

It was the worst quarter for the S&P since 2008 and the poorest quarterly performance for the Dow Jones Industrials since 1987. Both the Dow and S&P suffered through their worst first quarter ever. The Dow lost more than 23% of its value in January through March, as the S&P 500 fell 20% in the quarter. The NASDAQ didn't set any records but lost more than 14% in the first quarter.

With supply chain issues affecting companies in February and the advance of the virus in March, there's a good chance that GDP has been so negatively affected through first quarter, growth figures may have a minus sign in front of them when the first estimate of GDP will be announced on the fourth Friday of April. Mark your calendars for April 24 to see if the US will be half way to a recession or barely hanging onto some remnant of growth, any of it likely having occurred in January and early February. Any positive number would uplift the markets, but that is still a long way off and first up are employment figures for March. Wednesday, ADP reports private payrolls for the month and Friday the BLS reports on non-farm payrolls for March. Friday's number ought to be a market mover considering the massive job losses over the past week which will be figured into the calculations.

Gold got clobbered again, losing $46.30 per ounce on the day, dipping from $1623.40 Monday to $1577.10 Tuesday. Silver lost eight cents, closing out at $13.92. These prices are for paper contracts on the COMEX and other futures markets and are not aligning with current physical market dynamics. Both gold and silver are in short supply and dealers worldwide are charging severe premiums and assigning minimum purchases in some cases. Silver generally can be had for $20 to $25 per ounce. Gold is selling at roughly the $1800 level, though delivery times are delayed with waiting times up to 45 days in some cases.

As the futures prices and physical market prices diverge and decouple, it's only a matter of time before the fraudulent practices of settling contracts in cash rather than metal at the COMEX will become common knowledge and an open scandal as buyers standing for physical delivery are denied their right. As the coronavirus panic and attendant market turmoil extends, expect precious metals to rise dramatically in price as true owners of the metal divorce themselves from the bogus futures market.

The same is already occurring in the oil market with Saudi Arabia offering steep discounts to the published prices. WTI price continues to trend around $20 per barrel with gas prices across the United States, Canada and throughout Europe (using the Brent crude standard) at multi-year lows.

Experiencing more flattening across the curve, the treasury complex saw yields rise at the short and long durations, with the belly (1-year through 7-year) flatlining. As was the case with equities, bonds were little moved on the day.

ADP announces March private payrolls at 8:15 am ET on Wednesday. Futures are nearing limit down heading toward the opening bell.

At the Close, Tuesday, March 31, 2020:
Dow Jones Industrial Average: 21,917.16, -410.32 (-1.84%)
NASDAQ: 7,700.10, -74.05 (-0.95%)
S&P 500: 2,584.59, -42.06 (-1.60%)
NYSE: 10,301.87, -132.88 (-1.27%)

As Usual, Government Solutions Are Wrong, Damaging the Economy as COVID-19 Ravages the Planet

The trading desk at the NY Fed apparently bought everything, all day long.

That's not a joke. It's probably much closer to the truth than many would believe.

Since the Fed took steps to backstop every bond, loan, or financial obligation on the planet over the past two weeks, and the Congress and President passed a $2.2 trillion rescue relief bill last week, stocks have done nothing but shoot the moon higher as four of the past five trading sessions have been positive for the Dow, S&P and NYSE Composite, and three of five for the NASDAQ.

Amid a crisis condition across the country and around the globe, this kind of action - with similar moves in international markets as well - is completely devoid of any fundamental pricing structure. Simply throwing more good money after bad seems to be the only way the Fed operates, as if it were in a void zone and it's the worst kind of malinvestment, chasing away the demon of real price discovery by throwing more fake, phony, fiat currency at it.

At current levels, the major indices have achieved bear market territory and are about as likely to escape it as President Trump is to refrain from tweeting. With giant swaths of the economy shut down for the past two weeks and looking forward to another month of idleness, stocks should be going down, not up. Even down as much as 60% from their recent peak, many stocks are still overvalued and the main indices are settled in at or near levels that are 40-60% (NASDAQ) higher than prevailing levels in 2007 prior to the Great Financial Crisis (GFC), indicating that stocks, rather then stabilizing at current levels, hav emuch further to fall.

The degree of decline should be back to levels below the lows of 2008-09, since the issues which caused the crash then were never addressed in any meaningful manner, instead just kicked down the road. Banks and corporations have re-leveraged well beyond any reasonable price, using nearly-free money from the Fed to perform stock buybacks, boosting prices to extremes.

Initially, the cascading waterfall of falling stock prices as COVID-19 panic became evident was justifiable, more extreme than the beginning of any bear market including 1929, 2000, and 2008, ending nowhere near a bottom.

The Fed's bazooka-style blitzkrieg has blown up the markets, exacerbated by the rescue relief package. It won't last. Eventually, the near-term lows will be tested, re-tested, and finally exceeded as the long, slow grind of a second phase bear market assumes command. All the money in the world - and that's how much the Fed has at its disposal - cannot prevent another wave of selling, and another, and another, nor can it limit the size and scope of the global tragedy that will unfold in coming months and years.

In its latest attempt to curry favor from the masses, the CDC proposed a best-case prognosis of 200,000 deaths from COVID-19, but that number pales by comparison to the economic and social damage the policies of demand isolation, shuttering of businesses, and crushing unemployment will produce over the next 12-18 months.

Government policy promoting social distancing, travel restrictions, and business closures are misguided and harmful, will not contain the virus to satisfactory levels and are likely to foment a Greater Depression worse than 1929 in terms of unemployment, poverty, and malnourishment. Sadly, almost all other developed and developing nations have taken a similar approach, a groupthink solution that isn't a solution at all, but rather a quest for more control, more power, and more curtailment of civil liberties by the authorities currently in charge.

Other approaches are better suited to achieve better results, especially ones suggested in a brilliant essay by Percy Carlton for the Saker Blog, titled Covid-19 Derangement Syndrome: A World Gone Mad.

Carlton relies upon logic and science to achieve his solutions, rather then the over-emotional reaction of today's government incompetents. It is a must read for everyone, especially those who value freedom of choice, liberty, and thoughtful self-expression over government controls, socialized solutions, pharmacological mandates, pseudo-science, and pathological lies.

Laid bare before the American public and the world is the staggering incompetence and outrageous insolence of world "leaders." Beyond that lies an unpromising land of replete with shortages, monetary imbalances, fiscal irresponsibility, societal dislocation, rioting, looting, starvation, and death which could have been avoided.

Lack of advance planning and reliance on extreme measures adopted from China's experience with coronavirus, combined with political grandstanding and media obsession and obfuscation of facts have the world lumbering toward desperation. The longer the general public is subjected to the dictates of the administration the worse the condition will become.

Defeating the disease is the easy part. Putting back together the pieces of a broken global economy figures to be a more difficult task, one which sovereign governments and a central banking cartel are not well-suited to handle.

Meanwhile, the treasury curve flattens out, with the 10-year note yield slipping to 0.70% on Monday. Gold and silver remain difficult to obtain at prices well above the futures levels. Crude oil has fallen to 18-year lows with the price of gasoline falling in line.

The recent rally has nowhere to go under current conditions and should not have happened in the first place even under the best of circumstances, which are certainly not prevalent.

At the Close, Monday, March 30, 2020:
Dow Jones Industrial Average: 22,327.48, +690.70 (+3.19%)
NASDAQ: 7,774.15, +271.77 (+3.62%)
S&P 500: 2,626.65, +85.18 (+3.35%)
NYSE: 10,434.75, +247.54 (+2.43%)

Coronavirus Will Kill Many, but Government Response Has Killed the Economy

Theories have been floated about the coronavirus, or COVID-19, pandemic, suggesting (or outright claiming) that the infectious virus is variously a Chinese communist plot, an American false flag, a scheme by central banks or other nefarious, elitist secret society types, a message from God, an outer space concoction that has something to do with planet X, or that it's just the flu and the media, in cahoots with the governments of the world, is hyping it to the maximum degree as a cover story for the second Great Depression that was about to unfold, anyway.

At least for a change, nobody is blaming Vladimir Putin, the Russians or the Ukraine. They seemed to have worn out their scapegoat status.

Whatever and wherever the truth may lay, it's becoming apparent that the cure may be worse than the disease.

If a business were to shut down for a month or six weeks or maybe two months, the chances of it coming back to life in a healthy manner would be slim. Employees may have found new positions at other companies, customers would have had the time to find alternative sources for the product or service the shut-down business provided, bills, such as rent, utilities, and loans may or may not have been paid in a timely manner, and most of all, there would have been zero income for said business.

Now, multiply that case by thousands in one area, then expand the condition to all areas of the country and you've got a real mess, or, the current state of the global economy. Hundreds of thousands of businesses are temporarily closed and have been shuttered for as long as six weeks in some countries. Many of these operations are small businesses with a handful of employees, but the afflicted include major corporations with thousands of employees as well.

Adding to the nightmarish scenario are government orders or advisories at national or local levels telling people to stay home, to not go to work, to shelter in place, and otherwise avoid all unnecessary travel and contact with other people.

This is madness.

There is precisely zero possibility that the global economy will return to any place similar to what it was six months ago. And while that may be a good thing in the long run, in the short term it will almost completely destroy most of the economy, and rip to shreds any of the tattered fabric that remained of societies at local or national levels.

We have all of this for the sake of people getting sick, some dying, others experiencing nothing more than a minor cold, even more not contracting the virus at all. The latest figures from reliable sources put the number of confirmed cases of COVID-19 worldwide at around 750,000. The number of deaths has surpassed 34,000. In the United States, there are now 143,000 confirmed cases and just over 2,500 deaths.

These numbers may sound frightening or staggering, but knowing how many people die every day may put them into a less-panicky perspective. Globally, about 153,000 people die every day. That's 1,071,000 every week and more than 380 million annually. In the United States, about 7500 people die daily, or about 2,750,000 each year.

Sure, the COVID-19 cases and death toll are mounting, but just taking the number of deaths already presented - 34,000 - and, for the sake of argument, assume they all died within the last month, that number is minuscule compared to the 4.6 million that normally die every month. It works out to 0.75%, or less than one percent worldwide.

So why are government officials making such a big deal out of COVID-19 when 80% of cases are resolved with little to no medical attention necessary and less than two percent eventually die from it?

Good question. People die in car accidents every day and we don't ban cars. There are murders and suicides every day and people have debated how to prevent them for decades. The normal flu variant - another virus - kills 290,000 to 650,000 people every year. Coronavirus has a lot of catching up to do, yet governments insist that we must destroy our economy in order to keep it in check. And guess what? It's not working. The caseloads and deaths pile up every day regardless of whether people stay home, avoid contact, wash their hands or (and, if the CDC were serious, they would require this of all Americans) wear face masks.

The goal is supposedly to slow the progress of this highly infectious pathogen. OK, fine, let's save some lives while killing our economy. Has anybody considered the number of lives that will be damaged or ruined, or the number of people that will die or have their lives shortened because of how this is being handled?

Face the facts. Many jobs are not going to be there if and when this virus panic is concluded. Over the weekend, President Trump extended the social distancing, avoid social contact, and stay at home guidelines though April 30. That's 4 1/2 more weeks. By that time, many people will have to stay at home - if they have one - because they'll have no job and no money, and ironically, even if they do have enough dough on hand to put gas in their cars at massively reduced prices, other than the grocery store, pharmacy, or bank, there's nowhere for them to go. Everything else is closed.

So, our so-called leaders (Chris Martenson of Peak Prosperity calls them "managers," because they aren't really leading anybody) have made the decision to save some number of lives (10,000? 4 million? Who knows?)by effectively shutting down the economy, crashing the stock market, then fixing it all with a $2.2 trillion rescue attempt which includes sending checks to most people who make less than $75,000 a year. Those checks or direct deposits, when and if they do arrive, will amount to $1200 for most adults and $500 for each dependent child. If they wanted to be fair about it, they could take that $2.2 trillion and just doe out $6,666 to every man, woman and child in the country. If they took the entire amount and send money to just people who earn less than $75,000 a year - roughly 200 million - everyone would get $11,000.

However, since those roughly 200 million are going to get $1200, that's only $240 billion. The rest of that money - roughly $2 trillion, is largely going to corporations, which are going to lay people off in droves, and states, to cover extra expenses incurred in dealing with the crisis and for additional unemployment insurance. It's a rather large boondoggle, which will explode the federal budget, but who cares, since we're destroying the economy anyhow? The US is already $23 trillion in debt, what's another $2 trillion? The rest of the developed nations are in equally bad conditions, so they're planning on doing some similar bailout.

When this is all over, maybe by September, your local restauranteur will be out of business, but the McDonalds, Applebees, Pizza Huts, and Taco Bells of the world will be there to please your palette. The government's solution to COVID-19 will manage to crush small businesses and reduce the middle class to rubble.

Stock market declines will wipe out pensions.

Banks and large corporations will get loans or grants, aka, bailouts, again.

In the face of all of this, stocks went on a tear last week, having the best week since 1932, supposedly, which is ironic, because 1932 was in the midst of the Great Depression. All of the top five or seven best daily or weekly gains for stocks have come during bear markets, just as last week's did.

While some people were claiming that the bear market was vanquished last week, there's absolutely no truth to that. All major indices are at least 20% lower from the all-time highs made in February. Stocks are in a bear market and they'll stay in one no matter how much money the government and Federal Reserve throws at them. Stocks may go up for a while, but they're destined to go right back down. There's no escaping the fact that the global economy is broken, banks are largely insolvent and at some point will likely be shut down, unemployment is headed north of 20% and bankruptcy attorneys are set to make fortunes.

Gas at the pump is the lowest it's been in decades. Gold and silver cannot be purchased and delivered at current quoted prices. Most dealers are sold out. Wait times for what may be available are as long as 45 days. While gold popped back over $1600 an ounce last week, nobody can touch an ounce for less than $1800. Pricing for physical has decoupled from the fake, manipulated futures con game price at the COMEX.

The same is true for silver. It's current price is floating somewhere around $14.50 per ounce. Sales on eBay, where delivery can be as quick as two day because private individuals are selling there, have the price for an ounce of silver anywhere from $20 to $25. That market is broken. More markets will break down in coming days, weeks, and months. It might be instructive to consider the equity markets broken since the Federal Reserve can prop up the banks and other companies at will, even though their mandate allows them to buy just about everything but stocks, though that will likely change. Imagine playing poker with a guy who has $20 trillion and you have $200. That's what trading stocks is going to be like soon.

Bond prices are the lowest in history. The short-dated maturities briefly went negative last week. Expect that to be the rule rather than the standard going forward.

It's an absolute mess, a complete shame. Already, the banks are in trouble, as CapitalOne (COF) received a back-handed bailout last week, getting a waiver from the CFTC when they were caught with their pants down playing derivatives in the oil market (yes, the oil market that crashed last month). There's more to come from your friendly banking community, which gets money for nothing and loans it to the public at 20%, 25%, 29% or more.

Everything is just peachy.

Here are some recent numbers for the major indices, noting the recent all-time highs (February, 2020) and interim lows (March, 2020):

Dow High: 29568.57, Low: 18213.65
NASDAQ High: 9838.37, Low: 6631.42
S&P High: 3393.52, Low: 2192.86
NYSE High: 14183.26, Low: 8664.94
Dow Transports: High: 11359.49, Low: 6481.20

At the Close, Friday, March 27, 2020:
Dow Jones Industrial Average: 21,636.78, -915.39 (-4.06%)
NASDAQ: 7,502.38, -295.16 (-3.79%)
S&P 500: 2,541.47, -88.60 (-3.37%)
NYSE: 10,187.21, -349.07 (-3.31%)

For the Week:
Dow: +2462.80 (+12.84%)
NASDAQ: +622.86 (+9.05%)
S&P 500: +236.55 (+10.26)
NYSE: +1054.05 (+11.54)
Dow Transports: +861.46 (+12.60%)

Dow, S&P Gain Third Straight Day; Fed Buying Evident

There are signs everywhere that the Federal Reserve has taken an active role in the stock market, especially in the US, but probably abroad as well, in cahoots with their central bank partners, as stocks have recovered sharply over the past three days after being battered by fears stemming from the coronavirus global pandemic, or COVID-19.

Probably the most glaring evidence - outside of the Dow's near-500-point gain in the final 12 minutes of trading Thursday - is the ballooning of the Fed's balance sheet, which has grown by $507,323,000,000 ($507.323 billion) in just seven days, from March 18 to the 25th.

Being almost completely transparent, the Fed, in recent days has announced that they would purchase everything from municipal debt, to corporate debt, to exchange traded funds (ETFs) in the open market in order to "stabilize" the situation. There's one good reason why the Dow was up 1,351 points on a day that started with the announcement that more than three million Americans has lost their jobs in the past week, and it's because the Federal Reserve, with literally unlimited amounts of buying power, was actively in the market.

While this will come as a surprise to pretty much 90% of all Americans, central bank direct activity in equity markets has been an open secret in financial circles for at least the past decade. The Swiss National Bank (SNB) and Bank of Japan are major shareholders in many corporations, including Apple (AAPL) and many others. The BOJ has been buying ETFs in earnest since as early as 2012, when their balance sheet exploded from 150 trillion yen ($138 billion US) to 550 ($506 billion US). Today, the Bank of Japan owns stocks and bonds equal to the country's entire economic output, or 100% of GDP. In essence, the Bank of Japan owns the Japanese economy. It is the Japanese economy and a similar scenario is beginning to emerge in the United States, and likely in the European Union as well.

Other independent central banks in Australia, Canada, England, Brazil, and elsewhere are probably considering doing the same in their stock markets if they haven't already.

It's not as though central banks are complete foreigners to intervention in markets. They've completely distorted the capital markets for years, buying up agency (government) debt and mortgage-backed securities en masse before and after the Great Financial Crisis in 2007-09 to the point at which trillions of dollars in government bonds carry negative yields.

So, instead of just buying debt, why not stocks? Ask your broker. I'm sure he or she will have a ready answer after convulsing on the floor in either laughter or tears.

Elsewhere, treasury yields fell across the spectrum, the 10-year note checking in at 0.83%. Gold and silver have returned to being an afterthought in the futures market and largely unavailable in physical quantities. Gold is still testing recent multi-year highs, closing up $11.60 on Thursday to $1624.50 per ounce. Silver closed down slightly to $14.41 in the futures market. Meanwhile, dealers report widespread shortages amid massive demand for "everyman's gold."

Being that silver is so much less expensive than gold, it is available to anybody with a couple of sawbucks. Thus, it is THE prime target of central banks, as their greatest fear is to have a competing currency accepted by the middle and lower classes. It would kind of ruin their monopoly on currency. It's been going on for hundreds of years and isn't likely to change soon.

Oil was beaten down again on Thursday, with WTI crude closing out at $22.60 a barrel, down nearly two dollars from Wednesday's finishing price. Unleaded gasoline is cheap around the globe, the irony being, with so many coronavirus lockdowns or "stay at home" orders in place, gas is a bargain, but nobody can go anywhere.

At the Close, Thursday, March 26, 2020:
Dow Jones Industrial Average: 22,552.17, +1,351.62 (+6.38%)
NASDAQ: 7,797.54, +413.24 (+5.60%)
S&P 500: 2,630.07, +154.51 (+6.24%)
NYSE: 10,536.28, +574.89 (+5.77%)

Senate Approves $2.2 Trillion COVID-19 Relief Bill, Sends to House; Unemployment Claims Skyrocket to 3,283,000

Editor's Note: This edition of Money Daily was purposed delayed until after the weekly unemployment claims figures came out at 8:30 am ET Thursday. The regular report follows this headline news.

The Labor Department reported Thursday that initial unemployment claims for the week ending March 21 rose to a record 3,283,000, an increase of 3,001,000 from the previous week's revised level. An enormous jump in claims was widely expected.

Money Daily will have complete reporting on how this affected the markets in Friday morning's report.

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Simply put, Wednesday was just a replay or extension of Tuesday's rally, without as much drama or conviction on the part of investors, witnessed by the rapid descent in the final hour of trading. The Dow lost more than half of the day's gains. The NASDAQ ended up in the red after being up more than 250 points in early afternoon trading.

In other words, this rally ran out of steam via the old, "buy the rumor, sell the news" meme. The "rumor" was the Senate's $2.2 trillion national bailout and rescue plan for COVID-19 (very convenient). The "news" is that it was not passed by the full Senate during market business hours. Instead, the aged Senators stayed up well past their bedtimes again, passing the bill around 11:00 pm ET.

The fact that the Senate's 96-0 passage of the bill will coincide perfectly with the next "buy the rumor, sell the news" item - the weekly unemployment claims number at 8:30 am ET Thursday morning, will no doubt leave open to speculation that the timing was anything but coincidence.

Leaving the barn door just slightly ajar, the House of Representatives still has to vote on the measure passed by the Senate before it goes to President Trump for his signature. If he does get a crack at putting pen to paper on this one, it will allow for a huge influx of capital to individuals, families, and businesses, both big and small. It will also destroy any chance of the federal budget coming in with anything less than a $2 trillion deficit this year (fiscal year ends September 30), and next.

Most Americans will receive either a check or direct deposit in the amount of $1,200. Married couples will get $2,400, plus another $500 for each dependent child. The media says that 90% of the people in this country will get such a check, which is a telling figure. It speaks loudly to the wealth distribution in America when only 10% are making enough to not receive a check of any amount. People making more than $75,000 in 2018 or 2019 will get less than the full amount. There's a cap at $99,000 for individuals and $198,000 for married couples. Those will get nothing. In general terms, there's proof that only 10% of Americans are making more than $99,000 a year. No wonder Bernie Sanders and other democrats receive such strong support for "wealth redistribution."

All that aside, Thursday is looking like a bloodbath for the Bulls, as the unemployment figures will almost certainly be record-setting. Estimates range from 860,000 new claims (UBS) to four million (4,000,000) (Citi). The prior high was 695,000 claims filed the week ended October 2, 1982. If this were a betting game, Money Daily would be at or above the high figure provided by analysts at Citi. There's a chance it could be six million. New York alone could be over a million, ditto California.

As for other markets, bonds, precious metals, and oil were relatively stable on the day. The 10-year note seems to have found a sweet spot with a yield around 0.85%.

Gold looks to be consolidating above $1600 per ounce, though there are widespread reports that nobody can find even a one ounce bar at that price. Dealers have been scrambling for the last two weeks to fill orders and many are completely sold out. The same is true for silver, though to a lesser extent. The miners can produce silver faster than gold, so supplies are being replenished, but they will be bought up as soon as they're available.

Order fulfillment times for physical gold and silver bullion, coins, and bars are running three weeks and longer. Silver, on the spot or futures market is stabilizing around $14.50, but prices on eBay (which means almost immediate shipment) and through dealers are much higher.

Single one-ounce silver bars on ebay have been flying high, with prices ranging anywhere from $22 to as high as $41.

WTI crude is settling into a range between $22 and $24 per barrel and that price should persist and possibly go lower as the COVID-19 plague spreads and slows movement commerce worldwide. Gas prices in the US are a multi-year lows.

Stocks are not going back to record levels despite the Dow gaining ground for the second straight day. Tuesday and Wednesday were the first time the Dow saw back-to-back gains since February 3-6, when it strung together four straight wins. Finishing on the upside two days straight hadn't happened over the past 31 sessions.

At the Close, Wednesday, March 25, 2020:
Dow Jones Industrial Average: 21,200.55, +495.64 (+2.39%)
NASDAQ: 7,384.29, -33.56 (-0.45%)
S&P 500: 2,475.56, +28.23 (+1.15%)
NYSE: 9,961.38, +303.06 (+3.14%)

As Senate Seeks $2 Trillion Coronavirus Relief Package, Stocks Roar to Record Gains; Gold, Silver Rebound

When Senate majority leader Mitch McConnell announced on Tuesday that negotiations over a $2 trillion national bailout were "on the five-yard line," minority leader Chuck Schumer one-upped him, quipping that negotiations were on the two-yard line as he met and wrangled over details with Treasury Secretary Steven Mnuchin.

Presumptuously a bi-partisan effort, the back-and-forth between the administration and Senate leaders managed to lift spirts in lower Manhattan, sending stocks to record one-day gains as hope for financial relief appeared to be within reach.

The 2,113.01-point, 11.37 percent gain on the Dow Industrials was not only the greatest one-day point rise in market history, it was also the fourth-best percentage rise, following a 12.34 percent advance on October 30, 1929, when the market was just entering the Great Depression. At the time, the Industrial Average stood at 258.47, with its gain of 28.40 points.

Whether that comparison is fair or apocryphal remains to be seen, though it's a well-known fact that the greatest stock market gains occur during bear markets. Of the top seven one-day percentage gains, four were during the Great Depression, the other two occurring in the Great Financial Crisis, on October 13 and 28 of 2008. It would indeed be wise for market participants to pay heed to Tuesday's inclusion in this suspicious list.

The NASDAQ's 557.19-point rip was the second-most ever, following a 672.43-point advance on March 13, 2020, less than two-weeks ago. The 8.12 percent increase tied for seventh all-time with a similar percentage gain on April 18, 2001. At that time, the NASDAQ was well into the throes of the dot-com bust. The tech-laden index was then trading just above 2000, when a month prior it had reached all-time highs, breaking above 5000.

The story was the same for the S&P 500, which recorded the eighth-best percentage gain. The seven higher percentage gains were all made either during the Great Depression (five of them), while two happened in October, 2008. The S&P's 209.93-point rise stands second only to the 230.38-point advance on March 13 of this year.

While the Senate dithered over details, bulls were greatly relieved as they took it to the bears throughout the session. Led by Chevron (CVX) with a 22.74% increase, some of the top performers on the Dow Jones Industrial Average included American Express (AXP, +21.88%), beleaguered Boeing (BA, +20.89%), McDonald's (MCD, +18.13%), Goldman Sachs (GS, +13.80%), and 3M (MMM, +12.60%).

The outpouring of money and joy didn't stop at the corner of Wall Street and Broadway. The money flows extended into gold and silver, the two precious metals having recently been pounded below sensible levels. With one of its best one-day performances ever, gold advanced by some $84.80, finishing up at $1636.00 the ounce after a close at $1551.20 on Monday.

Silver rose from a close of 13.27 on Monday to end trading in New York at 14.36, a gain of 8.21 percent.

Oil was stable to higher, with WTI crude advancing from $23.36 per barrel to $24.01 on the day.

Generally, bonds sold off, led by treasuries with durations between one and 10 years. Yield on the 10-year note advanced eight basis points, from 0.76% to 0.84%. The largest gain of yield was found on the five-year note, which rose from 0.38% to 0.52%. The curve is still relatively flat, with yields in a narrow band of 138 basis points. The one, two, and three month bills all stand at 0.01%, with the 30-year bond checking in at 1.39%

While the Senate never did get to a cloture vote on Tuesday, the deal was eventually struck just before 1:00 am ET on Wednesday, when White House legislative affairs director Eric Ueland exited Senate Majority Leader Mitch McConnell’s office saying, according to CNN. “We have a deal.”

The full Senate is poised to vote on the package midday Wednesday. The House is expected to approve the bill by unanimous consent, sending it to the White House for President Trump's signature. The president is reportedly eager to sign the bill, sending money to individuals, families and businesses affected by events surrounding the coronavirus outbreak.

It is expected to advance direct payments of $1200 per citizen ($2400 for married couples) earning less than $75,000 a year. It is the largest stimulus bill ever made into law. With markets prepared to open shortly, futures are less-than-enthusiastic, as all of the major indices indicate a lower opening though Asian markets were up sharply overnight and European indices are mixed.

At the Close, Tuesday, March 24, 2020:
Dow Jones Industrial Average: 20,704.91, +2,113.01 (+11.37%)
NASDAQ: 7,417.86, +557.19 (+8.12%)
S&P 500: 2,447.33, +209.93 (+9.38%)
NYSE: 9,658.32, +880.94 (+10.04%)

Stocks, Bond Yields Tumble, Gold, Silver Sold Out at Most Dealers as Legislators Work on Stimulus Package

Stocks took another beating in the US on Monday, with the Dow Jones Industrial Average closing at its lowest level since the coronavirus crisis began in mid February. The close at 18,591.93 was lower than the previous low, but also lower than the intraday low (18,917.46, March 18). Intraday, the Dow was down nearly 1000 points from Friday's close (19,173.98), falling to 18,213.65.

The other indices fall in line for the most part, except the NASDAQ which was above the unchanged line most of the session and finished with a fractional loss. Being more speculative than the more stoic Dow, S&P and NYSE Composite, the NASDAQ is still experiencing some buying activity, though much of that is reserved for grocers and tech stocks.

Once again, the Fed stepped up to the plate prior to the market open, making an emergency statement about an hour prior to the opening bell U.S. to announce that Treasury and mortgage-backed securities (MBS) purchases would be expanded as much as needed. As with last Monday's pre-opening salvo by the Fed, traders were not swayed, sending the major indices into the red right off the bat.

As the trading wore on, there was some relief from the selling midday, as Senate majority leader, Mitch McConnell, and minority leader, Chuck Schumer, hinted that they were close to a deal on the $1.5 trillion relief package that would include a payment of up to $1200 (plus $500 per child) for most Americans making less than $75,000 a year.

When the measure failed to reach cloture on a 47-47 tie, stocks quickly reversed course and headed to the lows of the day. Any bill coming out of the Senate for a COVID-19 stimulus bill will need at least 60 votes to pass. The two parties are far from reaching compromise, especially after House Democrats released their $2.5 trillion plan that was much more generous. The Democrat bill calls for monthly payments of $2000 to nearly all Americans and $1000 per child under 18. It also provides provisions to shelter people who cannot make rent, mortgage, credit card, car leases or loans, or student loan payments, calling for forbearance without penalty for as long as the crisis is deemed a national emergency, plus 120 to 180 days after that.

In what would be essentially a debt jubilee, Democrats' are offering much more to individuals and families than are the Republicans. Their plan has many flaws, however, in that one could, conceivably, buy a new car, rent a swanky apartment, pay for neither and have use of them for up to a year, possibly longer. The bill would make whole all creditors harmed by the measure, presumably at some later date. It's a complete boondoggle that would crush the economy rather than help it.

Legislators will be back at it on Tuesday, looking for a bill that will satisfy both their constituents and their major campaign funders (corporations, banks).

Bonds were bid nearly across the board, with the one-month bill plummeting to 0.01 and the 30-year bond losing 22 basis points on the day, closing out with a yield of 1.33%. Yield on the 10-year note also crumbled, falling form 0.92% to 0.76%.

Precious metals were bid higher. Spot gold ended the day at $1551.20. Silver finished at $13.27 the ounce at the close of trading in New York. However, both were up significantly overnight. Silver adding 97 cents to $14.24, while gold was up $96 to $1647.20, as both metals, quoted in futures contracts, are actually selling far above those prices for physical. Buyers are paying up to 100% premiums on silver and $300-600 more for an ounce of gold and having to wait as much as a month for delivery as major metals dealers are simply overwhelmed with buyers and generally out of stock.

Oil closed at $23.36 per barrel. Gas prices in the USA have been seen as low as 99 cents at one Kentucky outlet. Most states are seeing the price at the pump under $2.00 per gallon and falling.

With trading set to resume in the US in a matter of hours, futures are looking absolutely dashing, suggesting that this Turnaround Tuesday could be one for the record books. Then again, futures have often been optimistic, only to see waves of selling throughout the open trading session.

At the Close, Monday, March 23, 2020:
Dow Jones Industrial Average: 18,591.93, -582.07 (-3.04%)
NASDAQ: 6,860.67, -18.85 (-0.27%)
S&P 500: 2,237.40, -67.52 (-2.93%)
NYSE: 8,777.38, -355.78 (-3.90%)

WEEKEND WRAP: Wall Street Suffers Worst Week Since 2008; Economy in Shambles and Worsening; COVID-19 Wrecking Central Banks, Sovereign Governments

My, oh, my, what a week this was!

The numbers are sufficiently horrifying to speak for themselves, and they're speaking loudly.

Stocks suffered their worst week since 2008. Yes. The week just past was worse than anything since the Great Financial Crisis, and beyond that, the dramatic drop that kicked off the Great Depression in 1929, is comparable.

The three top indices had their worst weekly performances since October of 2008. The Dow dropped 17% for the week, the S&P 500 tumbled 15% and the NASDAQ lost more than 12%. Friday's losses were widespread, the biggest losers were utilities (-8.2%) and consumer staples (-6.5%).

Since the beginning of the COVID-19 crisis, the main indices are down anywhere between 30% (NASDAQ) and 35% (Dow).

Here are the stark, raving-mad numbers from the peaks to Friday's close, with dates:

Dow Industrials: peak: 29,551.42 (2/12), close 3/20: 19,173.98, net: -35.12%
NASDAQ: peak: 9,817.18 (2/19), close 3/20: 6,879.52, net: -29.92%
S&P 500: peak: 3,386.15 (2/19), close 3/20: 2,304.92, net: -31.03%
NYSE Composite: peak: 14,136.98 (2/12), close 3/20: 9,133.16, net: -35.40%

Bear in mind, these numbers are all higher than they were prior to the collapse of 2008. For reference, here are figures from August 2008, followed by the bottoms, all recorded March 9, 2009.

Dow Industrials: 8/11/09: 11,782.35; 3/9/09: 6,926.49
NASDAQ: 8/14/09: 2,453.67; 3/9/09: 1,268.64
S&P 500: 8/11/08: 1,305.32; 3/9/09: 676.53
NYSE Composite 8/6/09: 8,501.44; 3/9/09: 4,226.31

What are the implications from these figures? Pretty simple, really. Since nothing was really fixed from 2008-09 (i.e., none of the major commercial banks - Lehman and Bear Stearns notwithstanding, as they were investment banks - failed), nobody went to jail, the GFC was mostly the deflation of a housing bubble, and all of the gains in stocks were the product of buybacks and/or massive infusions of cash by the Federal Reserve, it stands to reason that stocks will fall below their lowest levels of the GFC, or sub-prime crisis.

As almost all bear markets prove, there are steep losses in the initial phase, followed by a longer, slower, gradual decline, ending in complete capitulation wherein nobody wants to be holding equity shares at any price. Stocks go bidless. There are no buyers, and that is the condition to come.

The years 2009 through early 2020 can readily be construed as what's often referred to as the "everything bubble," in which all financial assets were inflated. In the simplest terms imaginable, gains in stocks during the past 11 years were a chimera, a figment of Wall Street's great imagination and greed.

An arguable point is that all of the major corporations who feasted on stock buybacks and easy money from the Fed are bankrupt. A corollary to that is the the commercial banks - Citi, Bank of America, JP Morgan Chase, Wells Fargo, Goldman Sachs, and Morgan Stanley - being either major shareholders of the Federal Reserve and/or many major corporations are also bankrupt, insolvent, as is the Fed, which, for all intents and purposes, just creates whatever money is needed out of thin air, with no backing other than the faith of the people and institutions using their fiat currency, and that faith is fading fast.

WTI crude oil concluded its worst week since the 1991 Gulf War, settling -11%, at $22.43/bbl as part of its 29% meltdown this week.

Precious metals continued to be under pressure, even though buyers of physical gold and silver are paying high premiums and silver buyers are waiting as long as a month for deliveries from major coin and bullion dealers. Many online outlets are out of stock on almost all silver items. Scottsdale Mint is advising buyers that silver purchases are 15-20 days behind. Spot silver was as low as $11.94 per ounce, ending the week at $12.59. Prices for coins and bars are ranging between $17.50 and $25.00.

Gold traded as low as $1471.40 on the paper markets. It finished up Friday at $14.98.80

Bonds were all over the map and ended with lower yields overall. Yield on the 30-year was as low as 1.34% and as high as 1.78%. It ended the week yielding 1.55%, crashing 23 basis points on Friday. The 10-year note yield ranged from 0.73% to 1.18%, closing at 0.92%. The curve steepened through the week to 151 basis points from the 1-month bill (0.04%) to the 30-year bond, though yields are lower than ever in history. Money has lost nearly all of its time-value, especially at the shorter end. The two-year is yielding a mere 0.37%.

The point is that the Federal Reserve, with ample assistance from other central banks around the world, particularly, the ECB, BOE, BOJ, and SNB (Swiss National Bank), blew an enormous stock bubble around the world, and, since it is deflating rapidly, are trying to blow an even bigger bubble. It will not work. Never has, never will. It might for a time, but in the end there will be massive defaults from individuals all the way to sovereign states and central banks themselves. There is a limit to how much fiat currency (not money, which would be currency backed by gold or silver or some other tangible, not-easily replenished asset) and how much complexity the world can handle. We are at those limits and hastily exceeding them.

What's worse is that the governments and central banks of planet Earth are doing this to themselves, or, rather, to their sovereign citizens, who will bear the brunt of rash decisions based on faulty economics and radical monetary and fiscal policies. The Fed will print trillions of dollars. The government will run debts to the tune of 20-25% of the gross national product, if there is any left after the shutdowns, slowdowns, quarantines, and eventual rationing.

Profligate spending and corruption at the highest levels of business, finance, and government has led to an inevitable dead end, ruining lives, destroying businesses, and deflating, then inflating bogus currencies.

This is the end of the fiat currency era, but it doesn't have to be the end of the world. Money Daily has been warning its readers for more than a decade that this kind of economic carnage would eventually come, urging people to invest in hard assets, real estate, precious metals, machinery, food supplies, arable land and produce, and more.

There will be winners and losers in all of this, and it is the intention of Money Daily to provide information and instruction on how to win.

Some random links:

Gregory Mannarino says, in a very emotional and exasperating video, that it's OVER, just as Money Daily has been suggesting for weeks.

Here's a beach-loving Seeking Alpha commentator who thinks we've seen the worst.

Marketwatch notes that the Dow is on track for its worst month since the Great Depression.

Sending checks to every eligible American is being debated in congress. Treasury Secretary quipped early in the week that President Trump and he would like to get money into the hands of Americans within two weeks. The current proposals being argued in congress are looking at early April as a timeline to get money to needy citizens. That's a lot longer than two weeks, but, when the banks and hedge funds need billions and trillions of dollars from the Fed, they get it the next day, if not sooner. It's about as unfair as banks getting money at near zero interest and charging 17-29% interest on credit cards.

The house of cards (no pun intended) is tumbling down.

At the Close, Friday, March 20, 2020:
Dow Jones Industrial Average: 19,173.98, -913.21 (-4.55%)
NASDAQ: 6,879.52, -271.06 (-3.79%)
S&P 500: 2,304.92, -104.47 (-4.34%)
NYSE: 9,133.16, -328.15 (-3.47%)

For the Week:
Dow: -4011.64 (-17.30%)
NASDAQ: -995.36 (-12.64%)
S&P 500: -406.10 (-14.98%)
NYSE: -1718.82 (-15.84%)

Stocks Bounce As News Suggests Possible, Readily-Available COVID-19 Treatments May Be Effective

Considering the extreme levels of volatility lately, Thursday's trading was relatively calm. Though the VIX remained elevated, it came down from over 80 to near 70 as the day commenced.

Stocks initially were lower, but found solid footing and ramped higher by mid-morning, the NASDAQ leading the way with speculators eyeing stocks that had cratered over the past three weeks, and began establishing positions at levels they considered to be bargains.

The S&P, Dow, and NYSE composite followed gamely but trailed the red-hot NASDAQ by more than a percentage point throughout the session. It was the first in many days that stocks had not ventured more than three percent in either direction for the last nine sessions, so some might argue that volatility is cooling, though still near record levels.

Moving 900 points from the morning lows to the close, the Dow's move was impressive, considering it has been absolutely damaged the prior session with Boeing (BA) leading the way down on Wednesday with a loss of some 25%. The aircraft manufacturer was down a mere four percent on Thursday, and is sporting a positive sign in pre-market trading Friday.

Thursday's unemployment claims numbers were 281,000, up by 71,000 over the prior week, but were for the week ending March 14, so much of the coronavirus-related data had not been tabulated, but will appear next Thursday.

Goldman Sachs’ Jan Hatzius wrote in a note to clients on Thursday night, “state-level anecdotes point to an unprecedented surge in layoffs this week.” The analyst claims that figures for the week ending March 21 will show initial claims rising to roughly 2¼ million, which would be the largest increase in initial jobless claims and the highest level on record. That's not unlikely, as major cities - San Francisco and New York in particular - are at or near lockdown levels of activity with many workers furloughed or otherwise idled by warnings or edicts from city and state officials.

Philly Fed’s manufacturing activity index crashed to an eight-year low of -12.7 in March from a three-year high of 36.7 in February. This follows the NY Fed’s Empire State Manufacturing index, which also dropped at a record pace to an 11-year low.

In a research report published on Thursday, Bank of America economists predicted the U.S. economy would lose 3.5 million jobs and GDP plummeting at a 12% pace in the second quarter, also probable figures given the severity of the reaction to COVID-19.

What's keeping Wall Street open for business and possibly ending the week with a positive tone are actions taken by the Fed which are too numerous to list, but include opening swap lines to other central banks, injecting billions of dollars via repo and QE, and wide open credit lines to primary dealers.

Also, President Trump's mention of a possible treatments for the virus in his now-daily news briefing, has been getting a great deal of attention. Specifically, the president mentioned a number of possible drugs that showed promise in tests, including Gilead Sciences' remdesivir (Money Daily mentioned Gilead's product back in January as a promising treatment and the stock has responded with a run from 63 to 78 since then) and chloroquine, an inexpensive drug long used to treat malaria, which is widely available and has proven to be an effective anti-viral in clinical trials done recently in China and France.

Thus, while COVID-19 is still making its way through the population, potential treatments are promising and - in the case of chloroquine - readily available in mass quantities at extremely low cost (less than 10 cents per pill in some countries). Also emerging is data from South Korea, Italy, the United States, and elsewhere that show the vast majority of cases that result in death are people over the age of 60 with underlying health conditions such as heart conditions, diabetes, or otherwise compromised immune systems.

That's the kind of news Wall Street traders can get behind, because, if successful treatments become widely available, people could be back at work within weeks, rather than months. While various governments - including California, which late Thursday announced a state-wide stay-at-home recommendation - are trying to limit transmission via social distancing and "soft" quarantines, communities that develop "herd immunity" quickest will be fastest to recover, meaning that the virus spreads readily and renders most of the population immune.

As the opening bell approaches, stock futures have lost some of their momentum, but still point to a positive opening Friday, which also happens to be a quadruple witching day.

Investopedia.com defines quadruple witching as "...a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December."

These dates are normally volatile, but should fit snugly into the current trading regime.

At the Close, Thursday, March 19, 2020:
Dow Jones Industrial Average: 20,087.19, +188.29 (+0.95%)
NASDAQ: 7,150.58, +160.74 (+2.30%)
S&P 500: 2,409.39, +11.29 (+0.47%)
NYSE: 9,461.30, +76.71 (+0.82%)

Wall Street Endures Another Wicked Day of Losses; Oil At Multi-Decade Lows; Gold, Silver Decoupling

There is nothing good that can be said about market action on Wednesday, March 17, except that it could have, and probably should have, been worse. A late-session rally brought all US indices off their lows of the day, to finish with spectacular, though not record, losses.

The Dow Industrials were down by as much as 2,320 points, the NASDAQ had fallen 648 points, and the S&P had fallen by 249 points before the late-day surge. The losses were spread across almost all sectors and stocks, some retail operations, grocery chains, and consumer favorites, such as Dow components, Wal-Mart (WMT) and Walgreens (WBA), enjoyed gains of 2.78% and 6.47%, respectively.

Oil was beaten to multi-decade lows, with WTI crude falling to $20 per barrel and Brent hitting the $25 mark.

Most of the financial carnage was caused by effects of the COVID-19 pandemic and efforts by governments and medical professionals around the world to control its spread. Worldwide, the virus has infected more than 220,000 and caused over 9,000 lives. In the United States, the numbers are growing rapidly with widespread testing becoming available. Cases are up to nearly 10,000 and 150 deaths have been attributed to the disease.

Where Wall Street and international markets go from here is plain for all to see. With financial assets having been boosted relentlessly after the Great Financial Crisis (GFC) of 2008-09, stocks are being sold off as though they had little to no value, which may, in fact, be the correct assumption.

With many companies and cities shut down indefinitely, people are more concerned about their personal health and welfare than what's in their 401k or retirement accounts. Financial stocks and airlines have thus far led the cascading declines, but they are being joined by stocks of all stripes.

Overnight, the Senate approved a bill sent by the House of Representatives and ready to be signed into law by President Trump for over $100 billion in relief to various segments of the country. The bill includes provisions for free coronavirus testing, paid sick leave and emergency leave for some individuals, food relief and enhanced unemployment benefits, which are probably going to be needed with an expected spike in new claims.

The European Central Bank approved a 715 euro stimulus package aimed primarily at bond repurchases and other assorted financial plumbing.

At 8:30 am ET, the US Labor Department updated the most recent new claims for unemployment insurance of 281,000, an increase of 70,000 from the previous week, though that number is for the week ending March 14. Claims are expected to surge to over 500,000 next week and some estimates are projecting job losses of more than three million by July, a number that is likely to be seen as conservative.

Gold and silver continue to be sold off as holders of paper contracts sell to make margin calls. The paper prices of the metals feel again on Wednesday, leaving gold at $1474.40 and silver closing n New York at $11.89.

Physical precious metal prices have broken away from the futures, with dealers charging extensive premiums as demand has skyrocketed. Silver is selling for $17 to $20 and more per ounce, with some dealers imposing 100% premiums. Prices on eBay for single ounce purchases of silver are ranging from $18 to $24 and higher.

Gold, partly because its high price holds down demand, is being sold in a range of $1580-$1675 per ounce with widespread shortages at online dealers. While the premiums for gold are still in the 10% range, they are significantly higher than just a few weeks ago. One would expect the gold price to be rising amid the buying surge, and decoupling from the paper price of the metals - which has already occurred with silver - may be imminent.

Bonds were sold at the long end of the treasury yield curve, sending the 30-year bond to 1.77% yield and the 10-year note to a yield of 1.18%, while the shortest durations, 1, 2, 3, and 6-month bills were hot tickets, ending the day with yields of 0.04, 0.03, 0.02, and 0.08%, respectively.

As Wall street steadies for another day of wicked trading, European markets are marginally lower. Asian markets felt even more pain in early Thursday trading. Indonesia's Jakarta Composite Index was down 5.20%; South Korea's KOSPI Composite was off 8.39%; the Straits Times Index off 4.73; Japan's NIKKEI fell by a mere 1.04%, and the Hang Seng, Hong Hong's index, was down 2.61%.

At the Close, Wednesday, March 18, 2020:
Dow Jones Industrial Average: 19,898.92, -1,338.46 (-6.30%)
NASDAQ: 6,989.84, -344.94 (-4.70%)
S&P 500: 2,398.10, -131.09 (-5.18%)
NYSE: 9,384.60, -678.76 (-6.74%)

Stocks Gain Tuesday, Busy Fed Monetizes Stocks Amid Spreading COVID-19 Virus: Boeing Wants $60 Billion

On the heels of Monday's knee-knocking losses, Tuesday's trade to the upside was somewhat predictable, in that a dead cat bounce usually follows massive losses, so the major indices continued along their path of one step forward, two (or three, four, or five) steps back.

There has not been back-to-back gains on the majors since a four-day stretch from February 4-7, as stocks rose relentlessly to new highs, the general top coming on February 12, in itself a surprising date, since the coronavirus was already in the process of devastating China and its economy, already having disrupted the global supply chain. How could investors have been so short-sighted? Greed has a certain blinding element to it, as does the opposite market reaction, fear, which has taken firm hold in the US markets and around the world.

Tuesday's events surrounding the viral outbreak were more of the standard fare of shutdowns, closures, government-imposed rules, as Europe closed its borders, every nation inside the EU locking down, as did the city of San Francisco, soon to be followed, most likely, by a similar "shelter in place" order in New York City, hinted at by Mayor Bill DeBlasio, shutting down all commerce for the foreseeable future.

The global case count has no exceeded that of mainland China and continues to outpace it. China's figures are still suspect, as they claim to have all but conquered the virus, the number of new cases since February 18 having grown by only 7,000, leveling off in the 81,000 range, a minuscule percentage of China's 1.4 billion population. However, China did lock down more than half of the country, especially in the province of Hubei, he original epicenter. There's probably never going to be any way to verify China's figures, since they announced Tuesday that reporters from The New York Times, The Wall Street Journal and The Washington Post would have their media credentials revoked, essentially barring them from reporting on anything.

With the March FOMC meeting underway, the Fed was very busy, boosting QE, extending credit for commercial paper to businesses large and small, and, after the market closed, re-instituting a loan facility to primary dealers from the 2008-09 crisis.

Officially called the Primary Dealer Credit Facility, or PMDF, the program will supply primary dealers of equities and other financial instruments loans of up to 90 days for at least the next six months, essentially monetizing stocks by allowing the 24 primary dealers to use stocks as collateral for short-term funding.

Also making headlines were Secretary Steven Mnuchin and President Trump, who were touting a plan to send $1000 checks to most Americans, specifically singling out millionaires, who, according to their statements, would not receive any handouts.

Boeing (BA), besieged by their own errors, is asking for a $60 billion bailout from the federal government. Boeing stock has fallen from a high of 440.62 to 124.14 currently, but the aerospace and airplane manufacturer should not be afforded such generosity, given that the company has been derelict in its corporate money management. Over the past 12 years, Boeing has repurchased at least $40 billion of its own shares, so, if it is in need of capital, it should just sell those stocks in the open market.

Boeing's stock buyback scheme worked to enrich shareholders and top executives as the share price soared as available stock was taken out of circulation and dividends were increased. Instead of reinvesting their profits, Boeing executives showered themselves with lavish bonuses and stock options. Now that a rainy day has arrived, they come begging for money from US taxpayers.

The same is true of major airlines, who spent almost all of their free cash flow on stock buybacks since the Great Financial Crisis of 2008-09. It's a travesty beyond compare.

While stocks held their own private party, other parts of the economic landscape obviously didn't share in the celebratory mood. Crude oil was sent to fresh lows, WTI crude cratering to $26.95 on Tuesday, and falling even more, to $26.04, in early Wednesday trading.

Gold and silver have been ravaged for days, though gold rallied sharply on Tuesday while silver fell to new lows, sending the gold-silver ratio to unimaginable heights. The last spot silver price in New York was $12.56 per ounce. Gold settled Tuesday at $1527.90, leaving the ratio at 121.65, an unbelievable figure, far and away the highest level in the 5,000 years of gold and silver being used as money.

As investment grade (IG) spreads have blown out to crisis levels, the treasury curve steepened dramatically on Tuesday, as the short end was bought and longer-dated maturities were sold. The total spread from 1-month bills out to 30-year bonds increased from 109 basis points on Monday to 151 Tuesday, the 30-year yield spiking 29 basis points to 1.64%, the 10-year note yielding 1.02%, also 29 basis points higher. At the short end, the 1-month bill yields 0.12%, falling from 0.25% on the day.

Thus, with millions of Americans at home for the next two weeks, with no sports, little work, and high anxiety, high finance drama continues to play out daily in the markets, which, for better or worse, remain unfettered and open for business.

The world is witnessing a financial calamity in real time.

At the Close, Tuesday, March 17, 2020:
Dow Jones Industrial Average: 21,237.38, +1,048.86 (+5.20%)
NASDAQ: 7,334.78, +430.19 (+6.23%)
S&P 500: 2,529.19, +143.06 (+6.00%)
NYSE: 10,063.36, +495.83 (+5.18%)