Stocks broke off a streak of three straight winning weeks courtesy of a trend-reversing, cascading selloff Thursday that erased all or most of June's gains.
The downdraft followed two straight days of minor losses and may have put a punctuation mark on the market's 11-week rally. The NASDAQ, which made a fresh all-time closing high on Monday (9,924.75) and crested over 10,000 on Wednesday, took a 517-point collapse on Wednesday. Like the Dow, which lost over 1800 points, the loss was the fourth-highest one-day point decline in market history. For both indices, the three higher point losses all occurred this past March.
Friday was snapback day, though the gains were paltry compared to the prior day's losses. Stocks gained back less than a third of what was surrendered on Thursday.
The late-week action prompted market observers to question the solidity of the recent rally, which, in V-shaped manner, took the markets straight off their March lows and out of bear market territory. Stocks had gained even as entire states were in lockdowns and the COVID-19 virus raged across America. Stocks continued to rise in the face of nationwide protests against police violence in the aftermath of the death of George Floyd at the hands of Minneapolis police. Many of the protests turned violent, as disruptive elements rioted and looted stores.
Fueled by emergency lending by the Fed, stocks seemed to be out of touch with mainstream economics, a condition not unusual for Wall Street types. Thursday's turnabout was broadly-based and unsparing of any sector though banking and tech stocks were leaders to the downside.
Coincidentally, protesting fell off as well, probably due to uprising fatigue. After two weeks of marching around in hot weather, the movement became somewhat pointless and many lost interest in reform toward better policing, though success was claimed in some areas, such as Minneapolis, where the city council decided to defund and disband the police, and New York, where measures were take by legislators to ratchet down the heavy-handed tactics of its force.
In Louisville, Kentucky, the city council voted to ban no-knock warrants. The resolution was passed in reaction to the death of Breonna Taylor, who was killed in a March no-knock raid at the wrong address.
One city in which protests have not tailed off is Atlanta, the scene of widespread rioting and looting early on, where chief of police, Erika Shields, has resigned on Sunday after officers fired upon and killed 27-year-old Rayshard Brooks Friday night.
And, in Seattle, the madness reached a climax on Monday as officials decided not to defend a police precinct, resulting in protesters, led by Black Lives Matter (BLM) taking over a six-block urban area and renaming it the Capitol Hill Autonomous Zone (CHAZ).
All of this is a backdrop to pent-up emotions and outrage that were magnified during the coronavirus lockdowns. Some people, took issue with Wall Street's rapid rally, citing it as an affront to societal mores and economic inequality. By the looks of where markets were heading on Thursday, the impact of the lockdowns and protests finally have reached lower Manhattan.
Treasuries staged a solid rally at the long end of the curve through Thursday, with the 10-year note yield falling from 0.91% to 0.66% and from 1.69% to 1.41% on the 30-year. On Friday, bond prices fell, with the 10-year closing out at 0.71%; the 30-year bond finished at 1.45%.
Precious metals rose early in the week, but were tamped down as the week drew to a close. Gold reached $1742.15 before ending the week still elevated at $1733.50. Spot silver was as high as $17.87 an ounce, closing at $17.62 on Friday. Spot and futures prices continue to trend toward irrelevance as premium prices for physical metal and shortages continue into a third month. Many dealers show popular items out of stock or with significant delivery delays, a condition that has persisted for retailers since the onset of the coronavirus.
eBay continues to light the way for purveyors and buyers alike, with calculable prices (at premiums over spot) and rapid, reliable deliveries. Here are the most recent prices on select items from ebay sellers (prices include shipping):
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 36.20 / 31.00 / 29.90
1 oz silver bar: 19.95 / 35.20 / 29.32 / 29.88
1 oz gold coin: 1,837.00 / 1,900.52 / 1,857.86 / 1,855.40
1 oz gold bar: 1,806.00 / 1,880.00 / 1,840.52 / 1,832.63
As far as stocks are concerned, after the FOMC meeting concluded Wednesday and the Fed committed to keep the federal funds rate at or near the zero-bound at least until the end of 2022, investors got a little jittery over their engineered V-shaped rally, the overall stability of the global economy, and valuations heading into the end of the second quarter and some supposedly horrifying earnings figures coming the second week of July.
The coming week may be epochal or apocalyptic as Friday offers a quad witching day as stock index futures, stock index options, stock options, and single stock futures expire simultaneously. There should be some volatility showing up at the convergence of day-trading, options players and real-time economics all roll together.
While Thursday's massive decline in stocks sent shock waves through the markets, Friday's returns were uninspired and had the look of a an exhausted rally on its final legs. Trading was sluggish at best and flatlined around 2:00 pm ET only to be saved by late-day short covering and the usual hijinks by backroom operators (NY Fed).
If stocks fail to close higher next week - as this week marked the end of a three-week uptrend - damage could become more or less permanent. While many placed hope in the Fed's power to purchase as many types and varieties of bonds that confidence was shattered on Thursday and should lead the way back to some fundamental rethinking of market dynamics.
Nothing goes up or down in a straight line, but this week should provide some clues as to the ultimate short-and-long term market direction.
At the Close, Friday, June 12, 2020:
Dow: 25,605.54, +477.37 (+1.90%)
NASDAQ: 9,588.81, +96.08 (+1.01%)
S&P 500: 3,041.31, +39.21 (+1.31%)
NYSE: 11,867.17, +208.00 (+1.78%)
For the Week:
Dow: -1505.44 (-5.55%)
NASDAQ: -225.27 (-2.30%)
S&P 500: -152.62 (-4.78%)
NYSE: -774.27 (-6.12%)
Sunday, June 14, 2020
Friday, June 12, 2020
So Much for That V-Shaped Recovery as Dow Sheds 1861 Points, NASDAQ Drops 527
That rally - the one that started on right away on March 24 with a 2100-point gain, the day after the Dow bottomed out at 18,591.93 - is over. Smart traders made money. Anybody who was fretting about their retirement account and didn't exit, well, there's still time. The market giveth and taketh away. In this case, thanks to emergency measures by the Fed, the market gave almost everybody who didn't get out a gold opportunity to make for the hills.
If you're still in, you're either a day-trading maniac or just plain stuck on stupid. There are other asset classes. There's always cash. This second leg down is likely to be much more severe than the first because it will take months instead of days to wipe out trillions in invest dollars. Rest assured, at the end of the second leg, everybody's a loser.
Putting it all into perspective, after the major indices fell into bear market territory - defined as down more than 20% - the duration of the bear market was record for brevity: five weeks. Not that those five weeks in the doldrums will go down in the history books as a traditional bear market; they'll likely be remembered as the start of the Greatest Depression, spawn of the coronavirus, oil shock, and global plebeian protests because the stock market decline began again in earnest on Thursday, June 11.
The loss on the Dow was nearly seven percent, ranking it just outside the Top 20 in percentage terms, but number four in regards to points lost. It ranks behind three other losses, all from this year, which is about all one needs to know about stocks in the year 2020. The NASDAQ loss of 527.62 was also the fourth-highest, point-wise. Similarly, the three greatest point losses in NASDAQ history also occurred just this past March.
No, there will not be any v-shaped recovery as the market charts suggested. That was all a fantasy, spun out of whole cloth from the Federal Reserve. After all, how could stocks rally when unemployment was somewher in the neighborhood of 15%, people around the world were dying from a pandemic, whole nations and most states in the US were shut down for anywhere from a month to ten weeks, corporate earnings were in the toilet and second quarter results were still a month down the road?
The fairy tale rally never made any sense and never will except in regards to some very rich people making even more money without doing a damn thing. Rest assured, most of them were selling today or have either significantly trimmed their positions or added hedges, by which they'll enrich themselves even further on another downdraft.
There is likely to be a snapback on Friday. No telling which way it will eventually eventually turn, but recent market action offers a strong indication that a 1200-point swing to the upside on the Dow might be key to understanding the psychology of crazy. Anything less than that would leave the Dow just below its 200-day moving average.
Be mindful that despite the Dow's 9,000-point gain (yes, that's right, 9,000 points!) over the past 12 weeks, the current chart is one of a primary BULL market according to Dow Theory. The Industrials exceeded the December 2018 lows to the downside, and then erupted to the upside, cancelling out the bear reversal. Dow Transports confirmed the move, doing the same.
Nobody is betting on conformity with current market conditions. The Fed's emergency rescue facilities have only added to the overall distortion from QE, ZIRP, and other experiments in currency counterfeiting. Hanging one's hat on theories dating back to the early 20th century might engender more anguish than reward.
Some will call Thursday's pullback "healthy", but those are probably the perma-bulls in the room. Anybody who can say with a straight face that the US or global economy is healthy ought to be selling used cars rather than stocks.
WTI crude fell more than $3 on the day, from a range around $39 to $36. Gold and silver were unceremoniously smashed lower on futures markets, but, as has been a repeating theme, will likely bounce back quickly as premiums and shortages persist.
The long end of the treasury complex continued to rally, dropping yield in the 10-year note and 30-year bond from 0.91% and 1.68% last Friday to 0.66% and 1.41%, respectively.
Stay liquid.
At the Close, Thursday, June 11, 2020:
Dow: 25,128.17, -1,861.82 (-6.90%)
NASDAQ: 9,492.73, -527.62 (-5.27%)
S&P 500: 3,002.10, -188.04 (-5.89%)
NYSE: 11,659.17, -790.05 (-6.35%)
If you're still in, you're either a day-trading maniac or just plain stuck on stupid. There are other asset classes. There's always cash. This second leg down is likely to be much more severe than the first because it will take months instead of days to wipe out trillions in invest dollars. Rest assured, at the end of the second leg, everybody's a loser.
Putting it all into perspective, after the major indices fell into bear market territory - defined as down more than 20% - the duration of the bear market was record for brevity: five weeks. Not that those five weeks in the doldrums will go down in the history books as a traditional bear market; they'll likely be remembered as the start of the Greatest Depression, spawn of the coronavirus, oil shock, and global plebeian protests because the stock market decline began again in earnest on Thursday, June 11.
The loss on the Dow was nearly seven percent, ranking it just outside the Top 20 in percentage terms, but number four in regards to points lost. It ranks behind three other losses, all from this year, which is about all one needs to know about stocks in the year 2020. The NASDAQ loss of 527.62 was also the fourth-highest, point-wise. Similarly, the three greatest point losses in NASDAQ history also occurred just this past March.
No, there will not be any v-shaped recovery as the market charts suggested. That was all a fantasy, spun out of whole cloth from the Federal Reserve. After all, how could stocks rally when unemployment was somewher in the neighborhood of 15%, people around the world were dying from a pandemic, whole nations and most states in the US were shut down for anywhere from a month to ten weeks, corporate earnings were in the toilet and second quarter results were still a month down the road?
The fairy tale rally never made any sense and never will except in regards to some very rich people making even more money without doing a damn thing. Rest assured, most of them were selling today or have either significantly trimmed their positions or added hedges, by which they'll enrich themselves even further on another downdraft.
There is likely to be a snapback on Friday. No telling which way it will eventually eventually turn, but recent market action offers a strong indication that a 1200-point swing to the upside on the Dow might be key to understanding the psychology of crazy. Anything less than that would leave the Dow just below its 200-day moving average.
Be mindful that despite the Dow's 9,000-point gain (yes, that's right, 9,000 points!) over the past 12 weeks, the current chart is one of a primary BULL market according to Dow Theory. The Industrials exceeded the December 2018 lows to the downside, and then erupted to the upside, cancelling out the bear reversal. Dow Transports confirmed the move, doing the same.
Nobody is betting on conformity with current market conditions. The Fed's emergency rescue facilities have only added to the overall distortion from QE, ZIRP, and other experiments in currency counterfeiting. Hanging one's hat on theories dating back to the early 20th century might engender more anguish than reward.
Some will call Thursday's pullback "healthy", but those are probably the perma-bulls in the room. Anybody who can say with a straight face that the US or global economy is healthy ought to be selling used cars rather than stocks.
WTI crude fell more than $3 on the day, from a range around $39 to $36. Gold and silver were unceremoniously smashed lower on futures markets, but, as has been a repeating theme, will likely bounce back quickly as premiums and shortages persist.
The long end of the treasury complex continued to rally, dropping yield in the 10-year note and 30-year bond from 0.91% and 1.68% last Friday to 0.66% and 1.41%, respectively.
Stay liquid.
At the Close, Thursday, June 11, 2020:
Dow: 25,128.17, -1,861.82 (-6.90%)
NASDAQ: 9,492.73, -527.62 (-5.27%)
S&P 500: 3,002.10, -188.04 (-5.89%)
NYSE: 11,659.17, -790.05 (-6.35%)
Thursday, June 11, 2020
Fed To Keep Rates At ZERO Through 2022; Are Gold and Silver Investors Batty?; Implications of Global Madness
If Forex is in your wheelhouse, you've no doubt noticed the recent decline in the US dollar against other major currencies. The Dollar Index has been pretty shaky as of late, but the current trend in the aftermath of the worst of the coronavirus pandemic is lower, with no bottom in sight.
After sinking to 94.89 on the 3rd of March, the dollar leapt back to an interim high of 102.82 on March 20th. Wednesday's quote was 95.96, a decline of nearly seven precent, most of that happening within the last three weeks.
That's not surprising, given that American cities have been beset upon by hordes of protesters, complete with rioters, looters, cop killings, tear gassings, rubber bullet maimings, autonomous zones (Seattle's Capitol Hill is one, recently claimed and occupied by protesters as police vacated the 3rd Precinct) and general lawlessness, making dollar holdings somewhat of a risky bet in the near term and, as dollar dominance recedes, maybe for much longer.
At the conclusion of the Fed's Tuesday and Wednesday's FOMC policy meeting, Chairman Jerome Powell made a definitive statement on interest rates, saying that the overnight federal funds rate would remain at the zero-bound at least until 2022. That kind of central bank sentiment doesn't exactly inspire confidence in the world's reserve currency. It indicates nothing less than a failure of financial system underpinning, a condition that first appeared in 2007, was not adequately addressed and has now become a systemic crisis without hope of positive resolution.
While the Fed still has the monetary muscle to backstop financial assets it does so with counterfeit, a fictional fiat currency without backing that eventually will be worthless. History has shown this to always be the case. Fiat currencies die and a new financial system is erected. Normally, the new system is backed by gold or silver, or a combination of the two. This time is no different than any other. The Federal Reserve and other central banks can continue their charade for only so long. Eventually, income disparity results in runaway inflation and widespread poverty, prompting clamor from the masses, which we are witnessing on a global scale today as an epochal societal revolution.
Such incalculable convulsions encourage escape from the clutches of unfair finances promulgated by central banks. People seek refuge from currencies that are losing value rapidly. Housing, health care, and eventually, food become unaffordable to the vast swath of middle and lower classes. Alternatives are sought. Gold and silver are the most readily available to the public. Silver becomes particularly of interest due to its lower price points. The availability of metallic money becomes a point of contention as people with limited means crowd into the space, which is exactly what's happened since the onset of the coronavirus.
A 10 troy ounce gold bar at Apmex.com is offered for $18,255.90. At Scottsdale Mint, the popular one ounce silver bar dubbed "The One" starts at $25.05 and goes down in price to $23.42 depending on quantity and method of payment. Of course, given that one would be willing to pay a price that carries a premium of seven dollars over spot, one would be out of luck, as "The One" is currently out of stock.
These are just a few examples of what happens when a confluence of events (pandemic, endless fiat currency creation, summer-long protests, high unemployment, rampant inflation) strikes the minds of people with money and assets. They either go with the flow and stay in stocks or look to gold and/or silver for some safety. With bonds yielding little to nothing - sometimes less than that via negative rates - and default risk rising (hello, Argentina!), precious metals offer a reasonable alternative.
Futures and spot prices for the precious metals might as well be cast upon stones for what they fail to deliver in terms of price discovery. Being holdovers from the failing fiat regime, they are being left behind as physical holdings dominate the marketplace. Prices are exploding on eBay and at dealers, as shown in the examples above. Money Daily tracks prices on eBay for one ounce gold and silver coins and bars weekly in it's Weekend Wrap every Sunday.
Other ways to deploy currency are in art, collectibles (comic book prices are through the roof), vintage automobiles, commodity futures, real estate, ad other asset classes, but none of those share the characteristics of precious metals as real money, except possibly cryptocurrencies like Bitcoin.
Wall Street, the Federal Reserve, and the federal government are hanging onto their prized positions of monetary and political authority by their teeth. It's only a matter of time before all of it fails. The nationwide protests are proof that the federal government is losing control of the country in manifest ways. Unrelenting gains in precious metal prices - and the attendant, repeated attempts to contain those gains in the futures markets - is evidence of the Fed's desperation, just as Wall Street's recent snapback rally is a mirage based on easily available fiat currency and nothing else.
It's all tumbling down and there's nothing that can stop it. The demise of the dollar has been an ongoing orgy of dislocation for decades. Trillions of dollars added to the Fed's balance sheet, euros at the ECB, yen at the Bank of Japan, yuan at at PBOC are mere stop-gap measures which do not address the underlying solvency issues. If the stock market crash in March wasn't enough to scare people out of stocks and fiat, the coming wave will surely devastate those who failed to heed the warning. Via the Fed's emergency measures, Wall Street has given investors a golden opportunity to diversify out of stocks. Those who fail to take the opportunity will suffer a heavy economic blow.
At the Close, Wednesday, June 10, 2020:
Dow: 26,989.99, -282.31 (-1.04%)
NASDAQ: 10,020.35, +66.59 (+0.67%)
S&P 500: 3,190.14, -17.04 (-0.53%)
NYSE: 12,449.22, -170.30 (-1.35%)
After sinking to 94.89 on the 3rd of March, the dollar leapt back to an interim high of 102.82 on March 20th. Wednesday's quote was 95.96, a decline of nearly seven precent, most of that happening within the last three weeks.
That's not surprising, given that American cities have been beset upon by hordes of protesters, complete with rioters, looters, cop killings, tear gassings, rubber bullet maimings, autonomous zones (Seattle's Capitol Hill is one, recently claimed and occupied by protesters as police vacated the 3rd Precinct) and general lawlessness, making dollar holdings somewhat of a risky bet in the near term and, as dollar dominance recedes, maybe for much longer.
At the conclusion of the Fed's Tuesday and Wednesday's FOMC policy meeting, Chairman Jerome Powell made a definitive statement on interest rates, saying that the overnight federal funds rate would remain at the zero-bound at least until 2022. That kind of central bank sentiment doesn't exactly inspire confidence in the world's reserve currency. It indicates nothing less than a failure of financial system underpinning, a condition that first appeared in 2007, was not adequately addressed and has now become a systemic crisis without hope of positive resolution.
While the Fed still has the monetary muscle to backstop financial assets it does so with counterfeit, a fictional fiat currency without backing that eventually will be worthless. History has shown this to always be the case. Fiat currencies die and a new financial system is erected. Normally, the new system is backed by gold or silver, or a combination of the two. This time is no different than any other. The Federal Reserve and other central banks can continue their charade for only so long. Eventually, income disparity results in runaway inflation and widespread poverty, prompting clamor from the masses, which we are witnessing on a global scale today as an epochal societal revolution.
Such incalculable convulsions encourage escape from the clutches of unfair finances promulgated by central banks. People seek refuge from currencies that are losing value rapidly. Housing, health care, and eventually, food become unaffordable to the vast swath of middle and lower classes. Alternatives are sought. Gold and silver are the most readily available to the public. Silver becomes particularly of interest due to its lower price points. The availability of metallic money becomes a point of contention as people with limited means crowd into the space, which is exactly what's happened since the onset of the coronavirus.
A 10 troy ounce gold bar at Apmex.com is offered for $18,255.90. At Scottsdale Mint, the popular one ounce silver bar dubbed "The One" starts at $25.05 and goes down in price to $23.42 depending on quantity and method of payment. Of course, given that one would be willing to pay a price that carries a premium of seven dollars over spot, one would be out of luck, as "The One" is currently out of stock.
These are just a few examples of what happens when a confluence of events (pandemic, endless fiat currency creation, summer-long protests, high unemployment, rampant inflation) strikes the minds of people with money and assets. They either go with the flow and stay in stocks or look to gold and/or silver for some safety. With bonds yielding little to nothing - sometimes less than that via negative rates - and default risk rising (hello, Argentina!), precious metals offer a reasonable alternative.
Futures and spot prices for the precious metals might as well be cast upon stones for what they fail to deliver in terms of price discovery. Being holdovers from the failing fiat regime, they are being left behind as physical holdings dominate the marketplace. Prices are exploding on eBay and at dealers, as shown in the examples above. Money Daily tracks prices on eBay for one ounce gold and silver coins and bars weekly in it's Weekend Wrap every Sunday.
Other ways to deploy currency are in art, collectibles (comic book prices are through the roof), vintage automobiles, commodity futures, real estate, ad other asset classes, but none of those share the characteristics of precious metals as real money, except possibly cryptocurrencies like Bitcoin.
Wall Street, the Federal Reserve, and the federal government are hanging onto their prized positions of monetary and political authority by their teeth. It's only a matter of time before all of it fails. The nationwide protests are proof that the federal government is losing control of the country in manifest ways. Unrelenting gains in precious metal prices - and the attendant, repeated attempts to contain those gains in the futures markets - is evidence of the Fed's desperation, just as Wall Street's recent snapback rally is a mirage based on easily available fiat currency and nothing else.
It's all tumbling down and there's nothing that can stop it. The demise of the dollar has been an ongoing orgy of dislocation for decades. Trillions of dollars added to the Fed's balance sheet, euros at the ECB, yen at the Bank of Japan, yuan at at PBOC are mere stop-gap measures which do not address the underlying solvency issues. If the stock market crash in March wasn't enough to scare people out of stocks and fiat, the coming wave will surely devastate those who failed to heed the warning. Via the Fed's emergency measures, Wall Street has given investors a golden opportunity to diversify out of stocks. Those who fail to take the opportunity will suffer a heavy economic blow.
At the Close, Wednesday, June 10, 2020:
Dow: 26,989.99, -282.31 (-1.04%)
NASDAQ: 10,020.35, +66.59 (+0.67%)
S&P 500: 3,190.14, -17.04 (-0.53%)
NYSE: 12,449.22, -170.30 (-1.35%)
Wednesday, June 10, 2020
Not Much of an Ouchie for Stocks in Advance of FOMC Party
300 points on the Dow Industrials really isn't a big deal these days. The Fed can make that up in minutes if they so desire. The level of fakery and ridiculous valuations in US equity markets is off the charts. It's like the world is knocking down the downs of these corporations to own a minute fraction of their business, a model, in most cases, that benefits the executives first and shareholders later, if at all.
Take Boeing for instance. Who in their right mind wants to own any of that. A legacy of planes that fallout of the sky and crash, huge bonuses paid to executives asleep at the wheel, mammoth pension obligations that the company will never be able to satisfy are just a few of the salient features of this so-called Blue Chip.
Maybe that moniker should be revisited and the definition revised. Your money will be chipped away until you've lost half or more, and you'll be blue. That would pretty much describe many of the "glamor" stocks touted by the willfully ignorant brokers and boiler room grifters who peddle corporate trash.
Not to say that all corporations are evil or that all investments are bad. Bears are solidly in the minority when it comes to investing, picking stocks, passive indexing, riding momentum or whatever else passes the litmus test at the local retirement home. There are plenty of good investments and good times to make them. Right now, after seeing the fed-pumped run-up over the past 10 weeks, just doesn't feel like one of those times.
The next chapter will be written Wednesday afternoon when all eyes and ears turn to Jay Powell and the FOMC. Being that he's been able to ward off a full-blown depression - by Wall Street standards at least - one wonders if he sees the protesters in the streets day after day, night after night, and wonders whether he is part of the problem.
Probably not. Why worry his little head over something so trivial as two straight weeks of nationwide protests when there's money (currency) to be made, new worlds to conquer and all that noise?
Treasuries yields on the long end of the curve have been decidedly lower over the first two days of the week, the 30-year falling from 1.68% to 1.59% and the 10-year note dropping to 0.81% from Friday's close at 0.91%. With the short end stable, the curve is beginning to flatten out again, something the Fed can hardly avoid happening.
The chit-chat this week has been over something called "yield curve control (YCC)," by the Fed, a real effort that requires skill and diligence to keep bond yields where the central bank wants them. The policy has been in place in Japan for the past four years, with limited success, though the argument from commercial lenders might offer a different theme because they're largely crowded out of the market and have difficulty making profits.
While something of this nature might work all right in a homogenous zombie economy such as is Japan's, and the Fed seems willing to try just about anything to distort markets and conceal price discovery. An experimental yield curve control mechanism should be right up their alley and no doubt they're considering it. Whether the Fed makes their desire to be even more injurious and paralyzing to capital markets publicly known might be a question not raised in polite company. After all, with a word record stock bubble on their hands and the world's reserve currency to babysit, it's unlikely that the Fed would make all their plans public. Some things are better kept quiet, at least until the next crisis.
Argentina watch: It's been a couple of weeks since Argentina actually defaulted on some bonds, missing a $500 million interest payment last month amid a circus of negotiations and proposals that seem to be largely aimed at preventing the triggering of credit default swaps (CDS) and the messy counter-party finger-pointing that is associated with such events. Nobody likes losing money, but, as seems to be the case with the Argentines, there isn't much one can do when there's no good collateral or currency the bond holders are willing to accept, though both sides are trying.
Judging by reportage of the ongoing negotiations it appears that a deal is not about to be struck. Both creditors and the debtor, Argentina's government, seem reluctant to go too far out into the ether. When phrases like "restructuring talks are sparking hopes and tension", "amended proposal", "for a second time sweeten an original offer", "moving June 12 deadline", and "limited further upside" there should be cause for concern, especially when nearly every article on the subject of Argentina's debt "restructuring" ends on a positive note along the lines of "there will be an agreement sooner or later - the difference between the parties is just too small..." one can sense the tinge on panic.
There's supposed to be a final proposal presented either Thursday or Friday, which means probably Friday night some government clerk will slip a note under the hotel door of one of the three major creditors - BlackRock, Fidelity and Ashmore - with an outline of the proposed deal, giving them time to mull it over the weekend.
By Sunday night the world will either hear "we're close to a deal," or "talks will continue Monday" all along both sides well aware that any kind of deal over $65 billion in bonds at this juncture is more sizzle than steak. They're trying to kick the can further down the road, but they're getting dangerously close to the cliff at the end of it.
Finally, US government debt is about to exceed $26 trillion dollars. Trying to get a handle on that kind of number is difficult, but let's start with this: $26,000,000,000,000. Or, how about the burden to every American citizen of $78,600? Kind of makes that credit card debt seem insignificant, doesn't it?
With a run rate of over a million dollars per minute, US national debt, currently $25.92 trillion, increased by nearly $800 billion between April and May and continues at a pace of somewhere between $15 and $20 billion a week. It's possible that the debt will hit $26 trillion by the end of the month, depending on how it's calculated, and we may be able to celebrate the event with fireworks if it happens on or around July 4. If that's the case, remember to social distance and wear a mask.
At the Close, Tuesday, June 9, 2020:
Dow: 27,272.30, -300.14 (-1.09%)
NASDAQ: 9,953.75, +29.01 (+0.29%)
S&P 500: 3,207.18, -25.21 (-0.78%)
NYSE: 12,619.52, -217.08 (-1.69%)
Take Boeing for instance. Who in their right mind wants to own any of that. A legacy of planes that fallout of the sky and crash, huge bonuses paid to executives asleep at the wheel, mammoth pension obligations that the company will never be able to satisfy are just a few of the salient features of this so-called Blue Chip.
Maybe that moniker should be revisited and the definition revised. Your money will be chipped away until you've lost half or more, and you'll be blue. That would pretty much describe many of the "glamor" stocks touted by the willfully ignorant brokers and boiler room grifters who peddle corporate trash.
Not to say that all corporations are evil or that all investments are bad. Bears are solidly in the minority when it comes to investing, picking stocks, passive indexing, riding momentum or whatever else passes the litmus test at the local retirement home. There are plenty of good investments and good times to make them. Right now, after seeing the fed-pumped run-up over the past 10 weeks, just doesn't feel like one of those times.
The next chapter will be written Wednesday afternoon when all eyes and ears turn to Jay Powell and the FOMC. Being that he's been able to ward off a full-blown depression - by Wall Street standards at least - one wonders if he sees the protesters in the streets day after day, night after night, and wonders whether he is part of the problem.
Probably not. Why worry his little head over something so trivial as two straight weeks of nationwide protests when there's money (currency) to be made, new worlds to conquer and all that noise?
Treasuries yields on the long end of the curve have been decidedly lower over the first two days of the week, the 30-year falling from 1.68% to 1.59% and the 10-year note dropping to 0.81% from Friday's close at 0.91%. With the short end stable, the curve is beginning to flatten out again, something the Fed can hardly avoid happening.
The chit-chat this week has been over something called "yield curve control (YCC)," by the Fed, a real effort that requires skill and diligence to keep bond yields where the central bank wants them. The policy has been in place in Japan for the past four years, with limited success, though the argument from commercial lenders might offer a different theme because they're largely crowded out of the market and have difficulty making profits.
While something of this nature might work all right in a homogenous zombie economy such as is Japan's, and the Fed seems willing to try just about anything to distort markets and conceal price discovery. An experimental yield curve control mechanism should be right up their alley and no doubt they're considering it. Whether the Fed makes their desire to be even more injurious and paralyzing to capital markets publicly known might be a question not raised in polite company. After all, with a word record stock bubble on their hands and the world's reserve currency to babysit, it's unlikely that the Fed would make all their plans public. Some things are better kept quiet, at least until the next crisis.
Argentina watch: It's been a couple of weeks since Argentina actually defaulted on some bonds, missing a $500 million interest payment last month amid a circus of negotiations and proposals that seem to be largely aimed at preventing the triggering of credit default swaps (CDS) and the messy counter-party finger-pointing that is associated with such events. Nobody likes losing money, but, as seems to be the case with the Argentines, there isn't much one can do when there's no good collateral or currency the bond holders are willing to accept, though both sides are trying.
Judging by reportage of the ongoing negotiations it appears that a deal is not about to be struck. Both creditors and the debtor, Argentina's government, seem reluctant to go too far out into the ether. When phrases like "restructuring talks are sparking hopes and tension", "amended proposal", "for a second time sweeten an original offer", "moving June 12 deadline", and "limited further upside" there should be cause for concern, especially when nearly every article on the subject of Argentina's debt "restructuring" ends on a positive note along the lines of "there will be an agreement sooner or later - the difference between the parties is just too small..." one can sense the tinge on panic.
There's supposed to be a final proposal presented either Thursday or Friday, which means probably Friday night some government clerk will slip a note under the hotel door of one of the three major creditors - BlackRock, Fidelity and Ashmore - with an outline of the proposed deal, giving them time to mull it over the weekend.
By Sunday night the world will either hear "we're close to a deal," or "talks will continue Monday" all along both sides well aware that any kind of deal over $65 billion in bonds at this juncture is more sizzle than steak. They're trying to kick the can further down the road, but they're getting dangerously close to the cliff at the end of it.
Finally, US government debt is about to exceed $26 trillion dollars. Trying to get a handle on that kind of number is difficult, but let's start with this: $26,000,000,000,000. Or, how about the burden to every American citizen of $78,600? Kind of makes that credit card debt seem insignificant, doesn't it?
With a run rate of over a million dollars per minute, US national debt, currently $25.92 trillion, increased by nearly $800 billion between April and May and continues at a pace of somewhere between $15 and $20 billion a week. It's possible that the debt will hit $26 trillion by the end of the month, depending on how it's calculated, and we may be able to celebrate the event with fireworks if it happens on or around July 4. If that's the case, remember to social distance and wear a mask.
At the Close, Tuesday, June 9, 2020:
Dow: 27,272.30, -300.14 (-1.09%)
NASDAQ: 9,953.75, +29.01 (+0.29%)
S&P 500: 3,207.18, -25.21 (-0.78%)
NYSE: 12,619.52, -217.08 (-1.69%)
Tuesday, June 9, 2020
NASDAQ Makes New All-Time High As Protests, Coronavirus Continue, FOMC Meets
It's official.
We live in Bizarro-world.
Protests stemming from the police killing of George Floyd continue to proliferate across the United States and around the world at the same time the COVID-19 coronavirus spreads against government efforts to control it. At the same time, stocks continue to erase the losses from the initial virus shock that occurred in March when stocks dove into bear market territory.
As for the shortest bear market in world history - five weeks - it's exceptionally amusing to see the money magicians at the Federal Reserve and other central banks around the world create trillions of dollars (and yen, and euros, and pounds, and yuan) out of thin air and see that money flow almost directly into stocks, as if there were no other asset class in the world. Obviously, there are other assets classes, but the stock market is the one which delivers the most bang for the buck, so much so that the NASDAQ made a new all-time high on Monday.
That's just not normal. Nothing about the Fed-induced stock rampage is normal. To make a point, one could attest to it being mostly fake. It's fake money, counterfeited by the Federal Reserve, funneled to primary dealers to ram into stocks whose earnings have been cratering for months, some for years.
Measured in earnings growth or other metrics, stocks have never been more expensive, making a case for the "greater fool" theory where one buys shares in an overvalued company at an inflated price based on the idea that somebody dumber than you will buy it at an even higher price. It's working. There are fools a'plenty making a mockery of fundamentals and due diligence cashing in at incredible rates of return.
Take for instance the NASDAQ, which closed at 6,904.59 on March 16, the bottom of the COVID-19 shock treatment. Monday's record close of 9,924.75 marks an incredible return of 43.74 percent in less than three months. Annualized, that's a return of more than 174 percent, a figure that would have everybody in the world retiring at 40 in the ultimate "buy the dip" scenario.
Obviously, that kind of return is unthinkable, or, at least it used to be, until we entered Bizarro-world where cats mate with mice, birds sing full operas and Tom Hanks becomes a top home run hitter in the major leagues... if there was such a thing as professional baseball, which there is not, nor is there likely to be this year.
In bizarro world, Hertz, which filed for bankruptcy a few weeks ago and traded for under a dollar last week, soar to over $5.50 on Monday. There's a 500% return right there, in just a few days. Thank you Jerome Powell, unrivaled leader of Bizarro-world.
Speaking of Mr. Powell, the FOMC begins a two-day meeting this week at the end of which they will announce their monetary policy. The ritualism of the Fed harkens back to tribal proceedings of the Aztecs, wherein the almighty witch doctor or shaman would enter the temple of the gods - with or without virgins - and emerge a day or two later with a proclamation for the masses. The wizened leader would announce that the rainy season was ending, or that pomegranates could cure mental illness.
The savages would praise the leader and spend the evening partying and dancing until they wore themselves out. It's an apt analogy for the ritual FOMC meetings which are held 10 times a year, or, for the anachronistically-unchallenged, SSDD.
Tuesday's meeting will extend to 2:00 pm ET on Wednesday, at which time the money masters will make their announcement that all is well, release a summary of economic projections, and hold a press conference at which Chairman Powell will amuse and bedazzle the attendant financial media slaves.
And Bizarro-world will continue.
At the Close, Monday, June 8, 2020:
Dow: 27,572.44, +461.46 (+1.70%)
NASDAQ: 9,924.75, +110.66 (+1.13%)
S&P 500: 3,232.39, +38.46 (+1.20%)
NYSE: 12,836.60, +195.16 (+1.54%)
We live in Bizarro-world.
Protests stemming from the police killing of George Floyd continue to proliferate across the United States and around the world at the same time the COVID-19 coronavirus spreads against government efforts to control it. At the same time, stocks continue to erase the losses from the initial virus shock that occurred in March when stocks dove into bear market territory.
As for the shortest bear market in world history - five weeks - it's exceptionally amusing to see the money magicians at the Federal Reserve and other central banks around the world create trillions of dollars (and yen, and euros, and pounds, and yuan) out of thin air and see that money flow almost directly into stocks, as if there were no other asset class in the world. Obviously, there are other assets classes, but the stock market is the one which delivers the most bang for the buck, so much so that the NASDAQ made a new all-time high on Monday.
That's just not normal. Nothing about the Fed-induced stock rampage is normal. To make a point, one could attest to it being mostly fake. It's fake money, counterfeited by the Federal Reserve, funneled to primary dealers to ram into stocks whose earnings have been cratering for months, some for years.
Measured in earnings growth or other metrics, stocks have never been more expensive, making a case for the "greater fool" theory where one buys shares in an overvalued company at an inflated price based on the idea that somebody dumber than you will buy it at an even higher price. It's working. There are fools a'plenty making a mockery of fundamentals and due diligence cashing in at incredible rates of return.
Take for instance the NASDAQ, which closed at 6,904.59 on March 16, the bottom of the COVID-19 shock treatment. Monday's record close of 9,924.75 marks an incredible return of 43.74 percent in less than three months. Annualized, that's a return of more than 174 percent, a figure that would have everybody in the world retiring at 40 in the ultimate "buy the dip" scenario.
Obviously, that kind of return is unthinkable, or, at least it used to be, until we entered Bizarro-world where cats mate with mice, birds sing full operas and Tom Hanks becomes a top home run hitter in the major leagues... if there was such a thing as professional baseball, which there is not, nor is there likely to be this year.
In bizarro world, Hertz, which filed for bankruptcy a few weeks ago and traded for under a dollar last week, soar to over $5.50 on Monday. There's a 500% return right there, in just a few days. Thank you Jerome Powell, unrivaled leader of Bizarro-world.
Speaking of Mr. Powell, the FOMC begins a two-day meeting this week at the end of which they will announce their monetary policy. The ritualism of the Fed harkens back to tribal proceedings of the Aztecs, wherein the almighty witch doctor or shaman would enter the temple of the gods - with or without virgins - and emerge a day or two later with a proclamation for the masses. The wizened leader would announce that the rainy season was ending, or that pomegranates could cure mental illness.
The savages would praise the leader and spend the evening partying and dancing until they wore themselves out. It's an apt analogy for the ritual FOMC meetings which are held 10 times a year, or, for the anachronistically-unchallenged, SSDD.
Tuesday's meeting will extend to 2:00 pm ET on Wednesday, at which time the money masters will make their announcement that all is well, release a summary of economic projections, and hold a press conference at which Chairman Powell will amuse and bedazzle the attendant financial media slaves.
And Bizarro-world will continue.
At the Close, Monday, June 8, 2020:
Dow: 27,572.44, +461.46 (+1.70%)
NASDAQ: 9,924.75, +110.66 (+1.13%)
S&P 500: 3,232.39, +38.46 (+1.20%)
NYSE: 12,836.60, +195.16 (+1.54%)
Sunday, June 7, 2020
WEEKEND WRAP: Did The BLS Cook The Books On May's Jobs Report?; Despite Stock Euphoria, The Crisis Will Continue
The week was one of consistency on the major indices, with stocks closing higher every day except Thursday, though, of the big four, the Dow was higher every day of the week, culminating in Friday's blow-off rally following the release of May non-farm payroll data from the BLS.
There was a considerable amount of speculation regarding the veracity of the BLS figures, which showed a net gain in May of 2.5 million jobs, the unemployment rate falling to 13.3%, according to the official release.
Most of the nation at least partially shut down during the month, the data provided by the BLS, while good enough for Wall Street's stock enthusiasts, has to be considered at least partially flawed, given that continuing claims for unemployment insurance rose sharply in the most recent week, hitting nearly 21.5 million.
Given that the April non-farm payroll report was a blockbuster all-time record at -20,537,000, revised higher, to -20,687,000, adding in the +2,509,000 would yield 18,178,000 still unemployed at the end of May, a number that does not jibe with the 21,487,000 continuing unemployment claims reported by the US Labor Department.
Also taken into consideration for the discrepancies between the two reports are the differences in reporting schedules and the Labor Department's estimate of more than 42 million initial claims filed over the past 10 weeks. Simply put, a lot of people went back to work in May, but there are still somewhere between 18 and 25 million unemployed. By claiming a record job creation number in its May data, the BLS has likely overstated the case for people returning to work after a brief hiatus due to the lockdowns caused by extreme measures taken to combat COVID-19.
A jump of 2.5 million jobs for the month has to be taken somewhat tongue-in-cheek since these are not new jobs whatsoever. The economy didn't produce 2.5 million new jobs. A better explanation would be that during the month, more people went back to work than were laid off or fired, by about 2.5 million.
Therefore, while the BLS can be accused of massaging their data to produce a positive headline, their methodology and timing remain - as has been the case for a very long time - somewhat suspect. There's still a massive unemployment problem which was manifest by the enormous numbers of protesters that appeared in cities nationwide over the course of the week. Many of these mostly young people were out on the streets during daylight and into the evenings. It would be logical to conclude that the vast majority of them were not holding down full-time jobs.
The protests underscore two things, neither of which have anything remotely to do with the death of George Floyd or police brutality. First, the protests are more about income inequality than anything else. These young people from Generation Z and the last remnants of the Millennials are becoming more and more impatient with the structure of the economy, even though most of them don't recognize that as the overriding factor of their movement.
While the chants of "Black Lives Matter" and "No Justice, No Peace" make for sensationally simple-minded soundbites on the mainstream media's morning and nightly news broadcasts, the root of the frustration is an economy which provides fewer jobs than are needed for fewer hours per week, at low rates of pay while the purchasing power of the dollar continues to decline, especially in some very important areas, those being primarily, housing, education, and health care.
When economists decry that large government deficits will be bourn on the backs of future generations, what we are seeing today is the truth of that dictum as the youthful protesters on the street are the generation now paying for the deficits rung up from the 1970s and '80s. It's a continuing, systemic problem that isn't about to go away. People trying to enter the workforce and engage in meaningful careers are finding it harder and harder to make ends meet. Income has net kept pace with inflation over the past 40-50 years, dating back to when then-President Nixon took the country off permanently off the gold standard in August of 1971.
There are certainly many young people doing fine in their careers. Those with masters degrees or doctorates or well-honed skills make very good money, but at a considerable price. Their cost of eduction can be measured in their student loan debt. Since housing costs have risen to extreme levels with only a slight blip in 2008-09, the affordability of just plain living quarters tests their resolve. Those wishing to start families (a declining number) see health care costs spiraling out of control. And those are the lucky ones with good jobs and dual incomes.
The rest of their generation struggles with all of that at lower pay and onerous debt. Many Millennials and Generation Z youths live four and five to a single home or apartment. Most cannot save anything, much less even dream of owning their own homes. Pity those who have medical conditions. Most cannot afford $300-$600 a month premiums with $5-8,000 deductibles, so they go without. To a lesser degree, the same conditions affect the backend of the Baby Boomers and early Millennials who have lived their lives on the fringes of society.
It's a condition of perpetual decline when roughly half of adult Americans do not have any savings whatsoever, the result of massive, uncontrolled government deficits, fait currency backed by nothing, printed to the hilt causing the purchasing power of the almighty dollar to slide into obscurity. It's not going away. In fact, with the Federal Reserve now in the process of either buying up or backing every stock or bond issued, hoisting their balance sheet by more than three trillion dollars in just the past three months, the US economy has become one of very few haves and very many have-nots, manifesting itself as runaway inflation. Not confined to just the United States, the rest of the world is revolted and revolting. Under current fiscal and monetary policy, the entire planet is rapidly turning into an oversized Venezuela.
Dissatisfaction with the political process is the second tenet of the protesters root causes, dovetailing income inequality and unaffordable living conditions. Federal, state, and local governments are ill-equipped to handle even ordinary stresses. Now that unemployment is on the rise and inflation is taking hold, government resources are stretched beyond their means. When people needed food during the recent lockdowns, government made little effort to step in. Food banks, charities and private citizens stepped up to fill the void. Government is increasingly being viewed with a jaded eye, neither responsive to people's needs nor able to fulfill basic obligations. People are simply tired of paying taxes and getting little to nothing in return. Individual income tax revenues are falling off a cliff while government debt continues to rise at an accelerating pace. Nothing about the current social and political condition is sustainable over anything but the short term, which is why we are seeing one crisis after another, bailout after bailout, emergencies arising on a regular schedule.
The United States and the rest of the world cannot buy or borrow their way out of this situation with policies that only increase debt and the burden to society. President Trump and Wall Street can go giddy over the most recent jobs data, but the underlying problems continue to mount and they're not going away. For all the media hype and government high-fiving in the short term, there's a larger price to be paid down the road. After years of can-kicking of core fiscal and monetary issues, the road is coming to an end. Most people, politicians, and financial planners don't have sufficient knowledge or vision to see where this all leads, preference being given to the present.
The NASDAQ is less than one half of one percent away from breaking to a new all-time high (9838.37).
The S&P 500 is about six percent away from a record close (3393.52).
Stocks are likely to continue climbing to record highs, but a period of stagnation lies just ahead. The bear market which was cut short by the Fed's money-pumping mechanisms and the government's emergency spending bills was the shortest on record, lasting a mere five weeks. Another bear market will be coming, as this one was papered over with currency that has only declining value. Oil prices are back up and by Friday, interest rates on treasuries had exploded. The 10-year note yielded 0.66% on Monday. By Friday, they were at 0.91%. The 30-year yield went from 1.46% to 1.68% over the course of the week. Shorter-dated maturities remained low, steepening the curve.
The final question for economists is this: How can high unemployment and tighter currency (higher rates) co-exist. The answer is very simple. They can't. With business unwilling or unable to expand, few will be hiring. Unemployment will remain elevated until there's a clearing or restructure of debt and businesses see a rosier future.
The Federal Reserve and the federal government has a very big problem on their hands. The pandemic and street uprisings were just the opening chapters of a very long story.
Gold and silver saw gains early in the week, only to be hammered lower on the paper markets.
The latest prices on ebay for one troy once items (shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 24.95 / 42.50 / 28.47 / 27.75
1 oz silver bar: 24.99 / 45.00 / 29.09 / 27.90
1 oz gold coin: 1,780.00 / 1,882.00 / 1,823.11 / 1,823.69
1 oz gold bar: 1,755.95 / 1,826.92 / 1,792.96 / 1,794.40
Premiums for silver are, on average, ten dollars or more over spot. Gold premiums are $80-100 over spot.
Greg Mannarino expounds upon the jobs number being cooked, market response and his positioning:
At the Close, Friday, June 5, 2020:
Dow: 27,110.98, +829.16 (+3.15%)
NASDAQ: 9,814.08, +198.27 (+2.06%)
S&P 500: 3,193.93, +81.58 (+2.62%)
NYSE: 12,641.44, +354.46 (+2.88%)
For the Week:
Dow: +1727.87 (+6.81%)
NASDAQ: +324.21 (+3.42%)
S&P 500: +149.62 (+4.91%)
NYSE: +838.49 (+7.10%)
There was a considerable amount of speculation regarding the veracity of the BLS figures, which showed a net gain in May of 2.5 million jobs, the unemployment rate falling to 13.3%, according to the official release.
Most of the nation at least partially shut down during the month, the data provided by the BLS, while good enough for Wall Street's stock enthusiasts, has to be considered at least partially flawed, given that continuing claims for unemployment insurance rose sharply in the most recent week, hitting nearly 21.5 million.
Given that the April non-farm payroll report was a blockbuster all-time record at -20,537,000, revised higher, to -20,687,000, adding in the +2,509,000 would yield 18,178,000 still unemployed at the end of May, a number that does not jibe with the 21,487,000 continuing unemployment claims reported by the US Labor Department.
Also taken into consideration for the discrepancies between the two reports are the differences in reporting schedules and the Labor Department's estimate of more than 42 million initial claims filed over the past 10 weeks. Simply put, a lot of people went back to work in May, but there are still somewhere between 18 and 25 million unemployed. By claiming a record job creation number in its May data, the BLS has likely overstated the case for people returning to work after a brief hiatus due to the lockdowns caused by extreme measures taken to combat COVID-19.
A jump of 2.5 million jobs for the month has to be taken somewhat tongue-in-cheek since these are not new jobs whatsoever. The economy didn't produce 2.5 million new jobs. A better explanation would be that during the month, more people went back to work than were laid off or fired, by about 2.5 million.
Therefore, while the BLS can be accused of massaging their data to produce a positive headline, their methodology and timing remain - as has been the case for a very long time - somewhat suspect. There's still a massive unemployment problem which was manifest by the enormous numbers of protesters that appeared in cities nationwide over the course of the week. Many of these mostly young people were out on the streets during daylight and into the evenings. It would be logical to conclude that the vast majority of them were not holding down full-time jobs.
The protests underscore two things, neither of which have anything remotely to do with the death of George Floyd or police brutality. First, the protests are more about income inequality than anything else. These young people from Generation Z and the last remnants of the Millennials are becoming more and more impatient with the structure of the economy, even though most of them don't recognize that as the overriding factor of their movement.
While the chants of "Black Lives Matter" and "No Justice, No Peace" make for sensationally simple-minded soundbites on the mainstream media's morning and nightly news broadcasts, the root of the frustration is an economy which provides fewer jobs than are needed for fewer hours per week, at low rates of pay while the purchasing power of the dollar continues to decline, especially in some very important areas, those being primarily, housing, education, and health care.
When economists decry that large government deficits will be bourn on the backs of future generations, what we are seeing today is the truth of that dictum as the youthful protesters on the street are the generation now paying for the deficits rung up from the 1970s and '80s. It's a continuing, systemic problem that isn't about to go away. People trying to enter the workforce and engage in meaningful careers are finding it harder and harder to make ends meet. Income has net kept pace with inflation over the past 40-50 years, dating back to when then-President Nixon took the country off permanently off the gold standard in August of 1971.
There are certainly many young people doing fine in their careers. Those with masters degrees or doctorates or well-honed skills make very good money, but at a considerable price. Their cost of eduction can be measured in their student loan debt. Since housing costs have risen to extreme levels with only a slight blip in 2008-09, the affordability of just plain living quarters tests their resolve. Those wishing to start families (a declining number) see health care costs spiraling out of control. And those are the lucky ones with good jobs and dual incomes.
The rest of their generation struggles with all of that at lower pay and onerous debt. Many Millennials and Generation Z youths live four and five to a single home or apartment. Most cannot save anything, much less even dream of owning their own homes. Pity those who have medical conditions. Most cannot afford $300-$600 a month premiums with $5-8,000 deductibles, so they go without. To a lesser degree, the same conditions affect the backend of the Baby Boomers and early Millennials who have lived their lives on the fringes of society.
It's a condition of perpetual decline when roughly half of adult Americans do not have any savings whatsoever, the result of massive, uncontrolled government deficits, fait currency backed by nothing, printed to the hilt causing the purchasing power of the almighty dollar to slide into obscurity. It's not going away. In fact, with the Federal Reserve now in the process of either buying up or backing every stock or bond issued, hoisting their balance sheet by more than three trillion dollars in just the past three months, the US economy has become one of very few haves and very many have-nots, manifesting itself as runaway inflation. Not confined to just the United States, the rest of the world is revolted and revolting. Under current fiscal and monetary policy, the entire planet is rapidly turning into an oversized Venezuela.
Dissatisfaction with the political process is the second tenet of the protesters root causes, dovetailing income inequality and unaffordable living conditions. Federal, state, and local governments are ill-equipped to handle even ordinary stresses. Now that unemployment is on the rise and inflation is taking hold, government resources are stretched beyond their means. When people needed food during the recent lockdowns, government made little effort to step in. Food banks, charities and private citizens stepped up to fill the void. Government is increasingly being viewed with a jaded eye, neither responsive to people's needs nor able to fulfill basic obligations. People are simply tired of paying taxes and getting little to nothing in return. Individual income tax revenues are falling off a cliff while government debt continues to rise at an accelerating pace. Nothing about the current social and political condition is sustainable over anything but the short term, which is why we are seeing one crisis after another, bailout after bailout, emergencies arising on a regular schedule.
The United States and the rest of the world cannot buy or borrow their way out of this situation with policies that only increase debt and the burden to society. President Trump and Wall Street can go giddy over the most recent jobs data, but the underlying problems continue to mount and they're not going away. For all the media hype and government high-fiving in the short term, there's a larger price to be paid down the road. After years of can-kicking of core fiscal and monetary issues, the road is coming to an end. Most people, politicians, and financial planners don't have sufficient knowledge or vision to see where this all leads, preference being given to the present.
The NASDAQ is less than one half of one percent away from breaking to a new all-time high (9838.37).
The S&P 500 is about six percent away from a record close (3393.52).
Stocks are likely to continue climbing to record highs, but a period of stagnation lies just ahead. The bear market which was cut short by the Fed's money-pumping mechanisms and the government's emergency spending bills was the shortest on record, lasting a mere five weeks. Another bear market will be coming, as this one was papered over with currency that has only declining value. Oil prices are back up and by Friday, interest rates on treasuries had exploded. The 10-year note yielded 0.66% on Monday. By Friday, they were at 0.91%. The 30-year yield went from 1.46% to 1.68% over the course of the week. Shorter-dated maturities remained low, steepening the curve.
The final question for economists is this: How can high unemployment and tighter currency (higher rates) co-exist. The answer is very simple. They can't. With business unwilling or unable to expand, few will be hiring. Unemployment will remain elevated until there's a clearing or restructure of debt and businesses see a rosier future.
The Federal Reserve and the federal government has a very big problem on their hands. The pandemic and street uprisings were just the opening chapters of a very long story.
Gold and silver saw gains early in the week, only to be hammered lower on the paper markets.
The latest prices on ebay for one troy once items (shipping - often free - included):
Item: Low / High / Average / Median
1 oz silver coin: 24.95 / 42.50 / 28.47 / 27.75
1 oz silver bar: 24.99 / 45.00 / 29.09 / 27.90
1 oz gold coin: 1,780.00 / 1,882.00 / 1,823.11 / 1,823.69
1 oz gold bar: 1,755.95 / 1,826.92 / 1,792.96 / 1,794.40
Premiums for silver are, on average, ten dollars or more over spot. Gold premiums are $80-100 over spot.
Greg Mannarino expounds upon the jobs number being cooked, market response and his positioning:
At the Close, Friday, June 5, 2020:
Dow: 27,110.98, +829.16 (+3.15%)
NASDAQ: 9,814.08, +198.27 (+2.06%)
S&P 500: 3,193.93, +81.58 (+2.62%)
NYSE: 12,641.44, +354.46 (+2.88%)
For the Week:
Dow: +1727.87 (+6.81%)
NASDAQ: +324.21 (+3.42%)
S&P 500: +149.62 (+4.91%)
NYSE: +838.49 (+7.10%)
Friday, June 5, 2020
Markets Await May Jobs Data
Pretty slow day all around. Not even any good rioting or looting news. Everything's on hold until the May non-farm payroll report at 8:30 am ET Friday.
We will be out fishing. Sunday's WEEKEND WRAP will tell the whole story.
At the Close, Friday, June 4, 2020:
Dow: 26,281.82, +11.93 (+0.05%)
NASDAQ: 9,615.81, -67.10 (-0.69%)
S&P 500: 3,112.35, -10.52 (-0.34%)
NYSE: 12,286.98, -15.21 (-0.12%)
We will be out fishing. Sunday's WEEKEND WRAP will tell the whole story.
At the Close, Friday, June 4, 2020:
Dow: 26,281.82, +11.93 (+0.05%)
NASDAQ: 9,615.81, -67.10 (-0.69%)
S&P 500: 3,112.35, -10.52 (-0.34%)
NYSE: 12,286.98, -15.21 (-0.12%)
Thursday, June 4, 2020
Fed Expands MLF Program To States, But Rates Are Too High For Widespread Participation
The Federal Reserve's MLF (Municipal Liquidity Facility) is yet another way the nation's central bank is picking winners and losers in the struggle to survive economic collapse.
By offering fresh currency to struggling states and municipalities, the Fed - having already expanded their balance sheet by more than $3 trillion in just the past three months - says it wants to help out by buying issuance from states, cities and now, public transit, airports, toll facilities, and utilities, becoming the buyer and lender of last resort for everything from your local bus company to your regional energy supplier.
Not that the Fed may have some evil intentions of owning everything in America, they also want to be paid well for it as well, which is why most states won't take the Fed up on their generous offer.
Those states with poor credit ratings, like Illinois (BBB), New Jersey, California, and Kentucky are the likeliest candidates to use the facility, as they are offered better rates by the Fed than they would find in the usual muni bond market.
According to Standard and Poors, only nine states have credit ratings lower than AA, meaning the vast majority of states will not probably need backing from the Fed unless the muni markets seize up and rates skyrocket, a situation that was made somewhat more of a known risk during the coronavirus lockdowns.
Funding needs by the states are generally considered among the safest bonds available. In most cases they can be held tax-free, another reason for their popularity. Thus, most states are going to say "thanks, but no thanks" to the Fed, as their funding needs are going to be largely fulfilled in the open market.
A BofA Global Research report on Wednesday projected borrowing under the MLF with its current terms would only total $90 billion. That's out of $500 billion allocated to the program.
The Fed also said it will support lending to multi-state entities and revenue bond issuers, or RBIs.
"Eligible notes issued by eligible issuers that are not multi-state entities or designated RBIs will generally be expected to represent general obligations of the eligible issuer, or be backed by tax or other specified governmental revenues of the applicable state, city, or county,” the Fed said. “If the eligible issuer is an authority, agency, or other entity of a state, city, or county, such eligible issuer must either commit the credit of, or pledge revenues of, the state, city, or county, or the state, city, or county must guarantee the eligible notes issued by such issuer."
Again, the Fed wants its pound of flesh, in the above instances, via actual tax receipts or guarantees.
Because response to the program has been tepid, the Fed has also lowered the bar for participation, allowing states with smaller populations to make choices for eligibility based upon their own populations.
"A governor that has the ability to designate one designated city or designated county may choose either (i) the most populous city in his or her state that has less than 250,000 residents or (ii) the most populous county in his or her state that has less than 500,000 residents," the Fed said in a statement.
Illinois was the first issuer to access the Municipal Liquidity Facility, with a trade of $1.2 billion of one-year general obligation notes and a rate of 3.82%. That deal is expected to close June 5.
New York's MTA (Metropolitan Transportation Authority), which operates the city's subway and commuter trains, last week asked the Fed for direct access to the program. Legislation is pending.
In their grand scheme to save the world, the Fed may want to own everything or at least have every entity on the planet in debt to them. With interest rates in the toilet, they're going to have to offer better deals to execute their plan. With that knowledge in hand, how long will it be before negative rates become the de facto norm?
Stocks ramped higher on Wednesday after ADP released its May private sector employment report. The private firm said the econly lost 2.76 million jobs during the month, far less than expectations of 7.4 to 8.6 million, based on weekly reports of initial unemployment filings.
ADP's figures, so far from expectations, had investors drooling over prospects for a less-substantial number from the government's non-farm payroll data due out on Friday. The thinking is that many firms rehired people in May, offsetting the number of people who lost jobs or were temporarily furloughed. It's just another way for skewed data to shift sentiment away from the prospect of long-term damage done to the economy by the coronavirus and lockdowns and toward the event being a one-off from which the economy will quickly rebound.
With that in mind, gold and silver were slaughtered after making substantial gain in the paper markets. Supply issues remain, however, with premiums for both metals well above the paper prices and normal range. Gold, which was pushing $1750, fell back below $1690 on Wednesday. Silver retreated from as high as $18.30 to $17.64. Both gold and silver were rebounding in overnight trading.
Thursday's release of another round of initial unemployment claims is unlikely to have a material impact on stocks, which will probably take a breather in advance of Friday's May non-farm payrolls.
At the Close, Wednesday, June 3, 2020:
Dow: 26,269.89, +527.24 (+2.05%)
NASDAQ: 9,682.91, +74.54 (+0.78%)
S&P 500: 3,122.87, +42.05 (+1.36%)
NYSE: 12,302.19, +255.79 (+2.12%)
By offering fresh currency to struggling states and municipalities, the Fed - having already expanded their balance sheet by more than $3 trillion in just the past three months - says it wants to help out by buying issuance from states, cities and now, public transit, airports, toll facilities, and utilities, becoming the buyer and lender of last resort for everything from your local bus company to your regional energy supplier.
Not that the Fed may have some evil intentions of owning everything in America, they also want to be paid well for it as well, which is why most states won't take the Fed up on their generous offer.
Those states with poor credit ratings, like Illinois (BBB), New Jersey, California, and Kentucky are the likeliest candidates to use the facility, as they are offered better rates by the Fed than they would find in the usual muni bond market.
According to Standard and Poors, only nine states have credit ratings lower than AA, meaning the vast majority of states will not probably need backing from the Fed unless the muni markets seize up and rates skyrocket, a situation that was made somewhat more of a known risk during the coronavirus lockdowns.
Funding needs by the states are generally considered among the safest bonds available. In most cases they can be held tax-free, another reason for their popularity. Thus, most states are going to say "thanks, but no thanks" to the Fed, as their funding needs are going to be largely fulfilled in the open market.
A BofA Global Research report on Wednesday projected borrowing under the MLF with its current terms would only total $90 billion. That's out of $500 billion allocated to the program.
The Fed also said it will support lending to multi-state entities and revenue bond issuers, or RBIs.
"Eligible notes issued by eligible issuers that are not multi-state entities or designated RBIs will generally be expected to represent general obligations of the eligible issuer, or be backed by tax or other specified governmental revenues of the applicable state, city, or county,” the Fed said. “If the eligible issuer is an authority, agency, or other entity of a state, city, or county, such eligible issuer must either commit the credit of, or pledge revenues of, the state, city, or county, or the state, city, or county must guarantee the eligible notes issued by such issuer."
Again, the Fed wants its pound of flesh, in the above instances, via actual tax receipts or guarantees.
Because response to the program has been tepid, the Fed has also lowered the bar for participation, allowing states with smaller populations to make choices for eligibility based upon their own populations.
"A governor that has the ability to designate one designated city or designated county may choose either (i) the most populous city in his or her state that has less than 250,000 residents or (ii) the most populous county in his or her state that has less than 500,000 residents," the Fed said in a statement.
Illinois was the first issuer to access the Municipal Liquidity Facility, with a trade of $1.2 billion of one-year general obligation notes and a rate of 3.82%. That deal is expected to close June 5.
New York's MTA (Metropolitan Transportation Authority), which operates the city's subway and commuter trains, last week asked the Fed for direct access to the program. Legislation is pending.
In their grand scheme to save the world, the Fed may want to own everything or at least have every entity on the planet in debt to them. With interest rates in the toilet, they're going to have to offer better deals to execute their plan. With that knowledge in hand, how long will it be before negative rates become the de facto norm?
Stocks ramped higher on Wednesday after ADP released its May private sector employment report. The private firm said the econly lost 2.76 million jobs during the month, far less than expectations of 7.4 to 8.6 million, based on weekly reports of initial unemployment filings.
ADP's figures, so far from expectations, had investors drooling over prospects for a less-substantial number from the government's non-farm payroll data due out on Friday. The thinking is that many firms rehired people in May, offsetting the number of people who lost jobs or were temporarily furloughed. It's just another way for skewed data to shift sentiment away from the prospect of long-term damage done to the economy by the coronavirus and lockdowns and toward the event being a one-off from which the economy will quickly rebound.
With that in mind, gold and silver were slaughtered after making substantial gain in the paper markets. Supply issues remain, however, with premiums for both metals well above the paper prices and normal range. Gold, which was pushing $1750, fell back below $1690 on Wednesday. Silver retreated from as high as $18.30 to $17.64. Both gold and silver were rebounding in overnight trading.
Thursday's release of another round of initial unemployment claims is unlikely to have a material impact on stocks, which will probably take a breather in advance of Friday's May non-farm payrolls.
At the Close, Wednesday, June 3, 2020:
Dow: 26,269.89, +527.24 (+2.05%)
NASDAQ: 9,682.91, +74.54 (+0.78%)
S&P 500: 3,122.87, +42.05 (+1.36%)
NYSE: 12,302.19, +255.79 (+2.12%)
Wednesday, June 3, 2020
Nothing Can Stop The Mighty Fed Printing Press And Back Room Bookkeepers
The protesting, rioting, and looting was noticeably on the downswing Tuesday night. It could be seen as a sign that cities and states have things under control or just a lull in the overall action. Depending on location, it's likely a little bit of each.
Before the curfews took effect, the Masters of the Universe on Wall Street managed to enrich themselves and shareholders just a little bit more, sending stocks through the proverbial roof, with most of the gains happening in the final half-hour of trading. The Dow, for instance, was up about 100 points at 3:30 pm ET. By the closing bell, it had gained 267 points.
Apparently, there's little to no downside for corporations no matter what happens in the real world. Pandemic? No problem. Print more. Widespread civil unrest? Meh. Print more. Supposedly, a nuclear holocaust would send the major indices to record highs.
What's amazing about the rally since late March is not that it has come with a background of lockdowns, over 100,000 deaths, street protests, rioting, looting, and assorted public dislocation, but that stocks were overvalued even at the low point. First quarter earnings reports were dismal, yet stocks continued their ascent to nosebleed levels that are now more overvalued than almost any time before.
The current CAPE ratio (Robert Shiller's 10-year P/E ratio) stands at 28.96. For purposes of comparison, the same ratio just prior to the 1929 crash was about 30. The figure before the panic of 2008 was around 27.50. Only the dotcom era produced a record high higher than Black Tuesday and the most recent levels, when it peaked at 44.19. For reference, the median CAPE is 15.78.
What we have is a market of zombie corporations controlled by financial manipulators, expert at buying back shares with borrowed money at near-zero interest, limiting the number of shares outstanding to goose the price of the stock higher. Many companies don't really make money anymore. They just play games with the books to make it look like they do.
In the background, other elements of the price-fixing regime that has become Wall Street back rooms, the NY Fed and controllers at Treasury and monolithic banking operations (primary dealers, but mostly JP Morgan Chase) keep gold and silver under wraps on the COMEX, as they did on Tuesday, slapping down the recent runaway rally in precious metals. That's a necessary evil under the control economy because the Fed doesn't like competition for their Federal Reserve (debt) Notes and gold and silver are real money, rather than just currency, like every other sovereign fiat.
Also well under the control mechanism is the price of oil, which is forbidden to fall to prices that comport to affordability for drivers of gas-powered vehicles. There was a brief opportunity to save a little at the pump, but that's now over, with oil pushing toward $40 a barrel. Truth be told, oil is old news. Renewables have taken a serious bite into the overall market share, especially solar, as advancement in solar panels have made self-generated electricity as cheap as what's supplied by fossil fuel plants and in some instances, cheaper.
The price of oil can go to $200, but people with solar installations and hybrid or EVs (electronic vehicles) will barely notice. What they will notice is the slowdown of the outlying economy, which would be crushed under regular unleaded at $6 or $7 a gallon.
There's no stopping this juggernaut monstrosity of a stock market nor the destructive money printing of the Federal Reserve. If and when stocks nosedive again, the Fed will just increase its balance sheet another for or five trillion, loan out money at negative rates and call it a day. By then, there will be no economy, just some cheap, fake import from China masquerading as a market.
Later this morning, ADP will release May private payroll numbers, which will be a disaster and a presage of Friday's non-farm payroll report for May. None of it will matter. Even with unemployment at 20%, stocks will still stroke higher. Welcome to the new world of finance, where nothing matters other than questionable or fraudulent bookkeeping and willful ignorance.
At the close, Tuesday, June 2, 2020:
Dow: 25,742.65, +267.63 (+1.05%)
NASDAQ: 9,608.38, +56.33 (+0.59%)
S&P 500: 3,080.82, +25.09 (+0.82%)
NYSE: 12,046.41, +146.17 (+1.23%)
Before the curfews took effect, the Masters of the Universe on Wall Street managed to enrich themselves and shareholders just a little bit more, sending stocks through the proverbial roof, with most of the gains happening in the final half-hour of trading. The Dow, for instance, was up about 100 points at 3:30 pm ET. By the closing bell, it had gained 267 points.
Apparently, there's little to no downside for corporations no matter what happens in the real world. Pandemic? No problem. Print more. Widespread civil unrest? Meh. Print more. Supposedly, a nuclear holocaust would send the major indices to record highs.
What's amazing about the rally since late March is not that it has come with a background of lockdowns, over 100,000 deaths, street protests, rioting, looting, and assorted public dislocation, but that stocks were overvalued even at the low point. First quarter earnings reports were dismal, yet stocks continued their ascent to nosebleed levels that are now more overvalued than almost any time before.
The current CAPE ratio (Robert Shiller's 10-year P/E ratio) stands at 28.96. For purposes of comparison, the same ratio just prior to the 1929 crash was about 30. The figure before the panic of 2008 was around 27.50. Only the dotcom era produced a record high higher than Black Tuesday and the most recent levels, when it peaked at 44.19. For reference, the median CAPE is 15.78.
What we have is a market of zombie corporations controlled by financial manipulators, expert at buying back shares with borrowed money at near-zero interest, limiting the number of shares outstanding to goose the price of the stock higher. Many companies don't really make money anymore. They just play games with the books to make it look like they do.
In the background, other elements of the price-fixing regime that has become Wall Street back rooms, the NY Fed and controllers at Treasury and monolithic banking operations (primary dealers, but mostly JP Morgan Chase) keep gold and silver under wraps on the COMEX, as they did on Tuesday, slapping down the recent runaway rally in precious metals. That's a necessary evil under the control economy because the Fed doesn't like competition for their Federal Reserve (debt) Notes and gold and silver are real money, rather than just currency, like every other sovereign fiat.
Also well under the control mechanism is the price of oil, which is forbidden to fall to prices that comport to affordability for drivers of gas-powered vehicles. There was a brief opportunity to save a little at the pump, but that's now over, with oil pushing toward $40 a barrel. Truth be told, oil is old news. Renewables have taken a serious bite into the overall market share, especially solar, as advancement in solar panels have made self-generated electricity as cheap as what's supplied by fossil fuel plants and in some instances, cheaper.
The price of oil can go to $200, but people with solar installations and hybrid or EVs (electronic vehicles) will barely notice. What they will notice is the slowdown of the outlying economy, which would be crushed under regular unleaded at $6 or $7 a gallon.
There's no stopping this juggernaut monstrosity of a stock market nor the destructive money printing of the Federal Reserve. If and when stocks nosedive again, the Fed will just increase its balance sheet another for or five trillion, loan out money at negative rates and call it a day. By then, there will be no economy, just some cheap, fake import from China masquerading as a market.
Later this morning, ADP will release May private payroll numbers, which will be a disaster and a presage of Friday's non-farm payroll report for May. None of it will matter. Even with unemployment at 20%, stocks will still stroke higher. Welcome to the new world of finance, where nothing matters other than questionable or fraudulent bookkeeping and willful ignorance.
At the close, Tuesday, June 2, 2020:
Dow: 25,742.65, +267.63 (+1.05%)
NASDAQ: 9,608.38, +56.33 (+0.59%)
S&P 500: 3,080.82, +25.09 (+0.82%)
NYSE: 12,046.41, +146.17 (+1.23%)
Tuesday, June 2, 2020
Nationwide Looting, Rioting Appears A-OK for Corrupt Wall Street Money Managers
Rioting and looting in cities across America and Wall Street sends stocks higher.
I honestly don't have words appropriate to express my disbelief, because it all is so unbelievable.
Wall Street, tipping their collective hats to the corrupt politicians in Washington, DC, sent stocks soaring during the lockdowns and social distancing brought about by COVID-19. Now, they will ramp stocks even higher as the country self-destructs. It makes absolutely no sense unless the entire construct is a criminal enterprise without restraint.
Looters and rioters may be breaking laws but the money managers and politicians break them every day and are given a pass. Is that right? Isn't that what the rioting is all about? It's not about George Floyd. It's about unfairness, corruption, and enslavement of the middle and lower classes by a corporate and political elite, and so, since there is nothing more to be said on the topic, I'll leave it there.
Except for this: If you have gold or silver, get more. If you have guns and ammo, get more. If you live in a city, get out. The situation on the ground is only going to get worse. True patriots must begin to take action or we'll lose the country for good. The looters and politicians and bankers will steal from you and the police won't protect you. True American patriots are beset on all sides.
--FR
At the Disgusting Close, Monday, June 1:
Dow: 25,475.02, +91.91 (+0.36%)
NASDAQ: 9,552.05, +62.18 (+0.66%)
S&P 500: 3,055.73, +11.42 (+0.38%)
NYSE: 11,900.24, +97.30 (+0.82%)
I honestly don't have words appropriate to express my disbelief, because it all is so unbelievable.
Wall Street, tipping their collective hats to the corrupt politicians in Washington, DC, sent stocks soaring during the lockdowns and social distancing brought about by COVID-19. Now, they will ramp stocks even higher as the country self-destructs. It makes absolutely no sense unless the entire construct is a criminal enterprise without restraint.
Looters and rioters may be breaking laws but the money managers and politicians break them every day and are given a pass. Is that right? Isn't that what the rioting is all about? It's not about George Floyd. It's about unfairness, corruption, and enslavement of the middle and lower classes by a corporate and political elite, and so, since there is nothing more to be said on the topic, I'll leave it there.
Except for this: If you have gold or silver, get more. If you have guns and ammo, get more. If you live in a city, get out. The situation on the ground is only going to get worse. True patriots must begin to take action or we'll lose the country for good. The looters and politicians and bankers will steal from you and the police won't protect you. True American patriots are beset on all sides.
--FR
At the Disgusting Close, Monday, June 1:
Dow: 25,475.02, +91.91 (+0.36%)
NASDAQ: 9,552.05, +62.18 (+0.66%)
S&P 500: 3,055.73, +11.42 (+0.38%)
NYSE: 11,900.24, +97.30 (+0.82%)
Sunday, May 31, 2020
WEEKEND WRAP: Violent Protests... What Did You Expect? Civil Unrest Sweeps Across America
Twenty percent unemployment. 20%.
That's the number likely to be presented when the monthly data series, non-farm payroll is released Friday one hour before the opening bell.
More than 40 million Americans are out of work. Another 12-24 million are underemployed, meaning they are working at jobs in which they are overqualified or their work doesn't provide a full week's employment (under 35 hours). Add to that the millions on welfare or disability and what you have is roughly half the working age population - with the bulk of them under 40 years of age - with no work, either no income or income of a size insufficient to service their expenses, lots of time on their hands, and anger building.
While these unemployed Americans were forced to stay home over a period stretching anywhere from three weeks to two months (and counting) because of ordered lockdowns due to the coronavirus, they watched the US stock markets crash and recover, aided by trillions of dollars thrown to market makers, banks, brokerages, corporations, and financial intermediaries from the Federal Reserve. The unemployed were assisted in their plight by an additional $600 a week in benefits and a one-time $1200 special payment, which for many took weeks to arrive. All along, the people at home watched the stock market recover at a record pace, wondering how long it will take for their jobs, their lives to recover back to somewhere near prior levels.
On Memorial Day, when four policemen in Minneapolis murdered George Floyd in broad daylight right in front of protesting bystanders, the fuse was lit for an explosion of pent-up frustration and anger. By Tuesday, people in Minneapolis took to the street to vent and the result was widespread violence, looting, burning of buildings, and utter disregard for authority as the police actually retreated from the swelling, uncontrolled mobs.
Wednesday through Saturday saw the protests turn violent in other cities. Denver, Atlanta, Louisville, Kentucky, New York, Boston, Los Angeles, Washington, DC, Portland, Oregon were among dozens which witnessed growing mayhem. By Saturday night, protests were witnessed in more than 75 cities and curfews imposed - with varying degrees of effectiveness - in 30 cities.
At a very early point the protests became no longer about George Floyd and police mistreatment and more about the disproportionate distribution of wealth, substandard living conditions, and a host of related issues.
For the most part, Americans don't like being told what to do or when to do it. By nature, Americans are bred for independence and freedom. The lockdowns and shelter-in-place orders clamped down on freedoms and shredded free speech, the right to assemble, freedom of choice, and freedom of movement. Prior to the violence of the week just past there were already anti-lockdown protests all over the country.
Now that we are amidst the overwhelming civil unrest that many had predicted, it's important to step back and view the carnage with an eye toward analysis and understanding. Authorities, such as the Democrat governor of Minnesota, Tim Walls, have asserted that as many as 80% of the people demonstrating in the streets are not locals, but imports from other areas of the country, their intent to spread unrest and wreak havoc on cities.
While this may or may not be true - it actually sounds ludicrous considering the sheer numbers - it's unlikely that the same numbers would apply in other cities. After all, with protests in more than 30 cities, the outsiders would have to have come from somewhere. Besides it being logistically inefficient, there would have been massive traffic spikes on the interstates. It just doesn't add up.
No doubt there are outside agitators, but there would also be agents provocateur from the authoritarian side of the equation.
The killing of George Floyd set this episode of violence into motion, but there's evidence that the main protagonist, officer Derek Chauvin, who pressed his knee into Floyd's throat for more than eight minutes, should have been aware of the death of Eric Garner, who was killed under similar circumstances in New York city in 2014. At least one or more of the other three officers holding down the handcuffed Floyd had to be aware of the similarities. These police knew exactly what they were doing. To believe otherwise is naive. Floyd's death, in a city notorious for mistreatment of minorities by the police, was very likely a set-up, to engender a violent reaction, just as the lockdown orders were conditioning of the public by authorities.
By the way, Floyd's supposed "crime" was passing a counterfeit $20 bill at a convenience store. Is it simply a coincidence that the image on the $20 bill is that of Andrew Jackson, "Old Hickory," who shut down the Second National Bank of the United States on September 10, 1833, and survived an assassination attempt on January 30, 1835? Coincidence? Maybe. Irony? Absolutely.
When the violence began in Minneapolis, the police either backed off in fear of their lives or stood down purposely, allowing looting and burning of buildings, cars, and trash receptacles to take place without limit. Law and order proponents have made reference to left-wing groups such as ANTIFA for inciting the riots, but for whom does ANTIFA actually work? The case can be made that their agitation serves the interests of authorities in government. As the violence and mayhem spirals out of control, the mayors and governors build up their forces with more manpower and firepower, and now, military support, as nearly a dozen states have activated the National Guard.
California, Georgia, Minnesota, Missouri, Nevada, Ohio, Tennessee, Texas, Utah, and Washington state, in addition to the District of Columbia have called in Guardsmen to help quell the uprisings. Martial Law is the next logical step as the protests continue though there is likely to be a pause followed by random acts of civil disobedience on a massive, if unorganized scale. People have had more than enough of a financial systems that favors the rich over the poor and middle class, a two-tiered judicial system - one for the rich and connected, one for those who are not, extreme inflation in housing and educational costs, rising taxes without sufficient representation, injustices by the elite and the governing class going unpunished, and their emotions are boiling over into untenable conditions across the nation.
Television media continues to push a narrative that the protests and violence are an outgrowth of racial tensions, rather than address the truth that the protests are more about generational and institutional inequality as evidenced by the massive numbers of black, white and Hispanics engaged, the vast majority of them under 30 years of age.
As cities burn, the obnoxious culture that is Wall Street is certain to respond, most likely in the wrong manner. All that matters in the realm of the economics of big business and central banking is higher share prices for the most-favored public corporations. While 40 million people were being laid off, fired, disengaged from jobs and income, the stock market indices gained back more than half of the losses initially incurred in late February and March. In the pretzel logic that is the inexorable ties between the Federal Reserve, the Treasury, and Wall Street, major cities erupting in riots and fires might be reason enough for fresh all-time highs in equities.
For the week, stocks continued their ten-week-long rally, tacking on 1.75 to over four percent on the major averages. The NASDAQ is within four percent of reaching all-time highs.
Over the shortened four-day week, treasuries were volatile with yields on the long end rising over the first three days but recoiling back on Friday as protests spread nationwide. The 30-year bond yield rose from 1.37% last Friday to 1.47% on Thursday, only to drop down to 1.41% Friday. The 10-year note closed out the week at with a two-week low yield of 0.65%.
Overall, the curve steepened to a spread of 125 basis points between the 2-year and 30-year with inversion between the six-month (0.18%) and 2-year (0.16%), indicative of recessionary conditions.
Oil prices seem to be consolidating. The July futures contract on WTI crude oil closed at $35.34 on Friday, in a range that appears to be suitable for all parties, considering the unlevel conditions on the ground.
The most volatility was evidenced in the precious metals space, especially silver, which advanced from a low of $16.80 per troy ounce to $18.05, closing out on Friday at $17.84. Gold finished up at $1728.70, off recent highs ($1748.30, May 20), though much improved from the week's low of $1694.60 per troy ounce.
On eBay, premiums remain elevated as shown by the most recent sales of one-ounce coins and bars:
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 39.71 / 28.47 / 27.47
1 oz silver bar: 18.49 / 43.90 / 30.36 / 29.70
1 oz gold coin: 1,853.63 / 1,975.49 / 1,882.36 / 1,876.89
1 oz gold bar: 1,658.20 / 1,883.81 / 1,828.94 / 1,849.35
Looking ahead, it's incredible how quickly the media focus changed from the fading coronavirus to the escalating street unrest. These are macro-issues, covering large swaths of people who are neither coalescing nor collectively unifying. If leaders emerge from the city protests, which is natural in large public movements, then it can be safely assumed that these protests and the background issues are real. If no leaders emerge, it's all more fakery and planned demolition of society, just like the pandemic, aka plandemic.
In the 1960s protests, leaders and organized groups were plentiful. Jerry Ruben, Abbie Hoffman, Dr. Martin Luther King Jr., Jane Fonda, Tom Hayden, Malcolm X, Eldridge Cleaver, Huey Newton, Angela Davis, and others are among the more memorable individuals from the era. Students for a Democratic Society (SDS), the Weathermen, the Southern Christian Leadership Conference, Black Panthers and many more splinter groups comprised peaceful and violent elements.
Songs expressed the prevailing movements of anti-war (peace) and civil rights. Joan Baez, Bob Dylan, Phil Ochs, Arlo Guthrie, Judy Collins, Pete Seeger, Peter Paul and Mary, the Byrds, Country Joe and the Fish, and many of the groups that played at Woodstock in 1969 were among the more prominent voices among the peace and civil rights movements.
One would expect leaders and groups to emerge and musicians to show the way forward. While it might be considered cynical to believe that current events are orchestrated by a devious deep state or other bad actors, it is not outside the realm of possibility. As the world has learned so often in recent times, conspiracy theory often emerges as conspiracy fact.
At the Close, Friday, May 29, 2002:
Dow: 25,383.11, -17.53 (-0.07%)
NASDAQ: 9,489.87, +120.88 (+1.29%)
S&P 500: 3,044.31, +14.58 (+0.48%)
NYSE: 11,802.95, -1.97 (-0.02%)
For the Week:
Dow: +917.95 (+3.75%)
NASDAQ: +165.29 (+1.77%)
S&P 500: 88.06 (+3.01%)
NYSE: +470.98 (+4.16%)
That's the number likely to be presented when the monthly data series, non-farm payroll is released Friday one hour before the opening bell.
More than 40 million Americans are out of work. Another 12-24 million are underemployed, meaning they are working at jobs in which they are overqualified or their work doesn't provide a full week's employment (under 35 hours). Add to that the millions on welfare or disability and what you have is roughly half the working age population - with the bulk of them under 40 years of age - with no work, either no income or income of a size insufficient to service their expenses, lots of time on their hands, and anger building.
While these unemployed Americans were forced to stay home over a period stretching anywhere from three weeks to two months (and counting) because of ordered lockdowns due to the coronavirus, they watched the US stock markets crash and recover, aided by trillions of dollars thrown to market makers, banks, brokerages, corporations, and financial intermediaries from the Federal Reserve. The unemployed were assisted in their plight by an additional $600 a week in benefits and a one-time $1200 special payment, which for many took weeks to arrive. All along, the people at home watched the stock market recover at a record pace, wondering how long it will take for their jobs, their lives to recover back to somewhere near prior levels.
On Memorial Day, when four policemen in Minneapolis murdered George Floyd in broad daylight right in front of protesting bystanders, the fuse was lit for an explosion of pent-up frustration and anger. By Tuesday, people in Minneapolis took to the street to vent and the result was widespread violence, looting, burning of buildings, and utter disregard for authority as the police actually retreated from the swelling, uncontrolled mobs.
Wednesday through Saturday saw the protests turn violent in other cities. Denver, Atlanta, Louisville, Kentucky, New York, Boston, Los Angeles, Washington, DC, Portland, Oregon were among dozens which witnessed growing mayhem. By Saturday night, protests were witnessed in more than 75 cities and curfews imposed - with varying degrees of effectiveness - in 30 cities.
At a very early point the protests became no longer about George Floyd and police mistreatment and more about the disproportionate distribution of wealth, substandard living conditions, and a host of related issues.
For the most part, Americans don't like being told what to do or when to do it. By nature, Americans are bred for independence and freedom. The lockdowns and shelter-in-place orders clamped down on freedoms and shredded free speech, the right to assemble, freedom of choice, and freedom of movement. Prior to the violence of the week just past there were already anti-lockdown protests all over the country.
Now that we are amidst the overwhelming civil unrest that many had predicted, it's important to step back and view the carnage with an eye toward analysis and understanding. Authorities, such as the Democrat governor of Minnesota, Tim Walls, have asserted that as many as 80% of the people demonstrating in the streets are not locals, but imports from other areas of the country, their intent to spread unrest and wreak havoc on cities.
While this may or may not be true - it actually sounds ludicrous considering the sheer numbers - it's unlikely that the same numbers would apply in other cities. After all, with protests in more than 30 cities, the outsiders would have to have come from somewhere. Besides it being logistically inefficient, there would have been massive traffic spikes on the interstates. It just doesn't add up.
No doubt there are outside agitators, but there would also be agents provocateur from the authoritarian side of the equation.
The killing of George Floyd set this episode of violence into motion, but there's evidence that the main protagonist, officer Derek Chauvin, who pressed his knee into Floyd's throat for more than eight minutes, should have been aware of the death of Eric Garner, who was killed under similar circumstances in New York city in 2014. At least one or more of the other three officers holding down the handcuffed Floyd had to be aware of the similarities. These police knew exactly what they were doing. To believe otherwise is naive. Floyd's death, in a city notorious for mistreatment of minorities by the police, was very likely a set-up, to engender a violent reaction, just as the lockdown orders were conditioning of the public by authorities.
By the way, Floyd's supposed "crime" was passing a counterfeit $20 bill at a convenience store. Is it simply a coincidence that the image on the $20 bill is that of Andrew Jackson, "Old Hickory," who shut down the Second National Bank of the United States on September 10, 1833, and survived an assassination attempt on January 30, 1835? Coincidence? Maybe. Irony? Absolutely.
Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out.
– Andrew Jackson (1767-1845)
When the violence began in Minneapolis, the police either backed off in fear of their lives or stood down purposely, allowing looting and burning of buildings, cars, and trash receptacles to take place without limit. Law and order proponents have made reference to left-wing groups such as ANTIFA for inciting the riots, but for whom does ANTIFA actually work? The case can be made that their agitation serves the interests of authorities in government. As the violence and mayhem spirals out of control, the mayors and governors build up their forces with more manpower and firepower, and now, military support, as nearly a dozen states have activated the National Guard.
California, Georgia, Minnesota, Missouri, Nevada, Ohio, Tennessee, Texas, Utah, and Washington state, in addition to the District of Columbia have called in Guardsmen to help quell the uprisings. Martial Law is the next logical step as the protests continue though there is likely to be a pause followed by random acts of civil disobedience on a massive, if unorganized scale. People have had more than enough of a financial systems that favors the rich over the poor and middle class, a two-tiered judicial system - one for the rich and connected, one for those who are not, extreme inflation in housing and educational costs, rising taxes without sufficient representation, injustices by the elite and the governing class going unpunished, and their emotions are boiling over into untenable conditions across the nation.
Those who make peaceful revolution impossible will make violent revolution inevitable.
-- President John F. Kennedy
Television media continues to push a narrative that the protests and violence are an outgrowth of racial tensions, rather than address the truth that the protests are more about generational and institutional inequality as evidenced by the massive numbers of black, white and Hispanics engaged, the vast majority of them under 30 years of age.
As cities burn, the obnoxious culture that is Wall Street is certain to respond, most likely in the wrong manner. All that matters in the realm of the economics of big business and central banking is higher share prices for the most-favored public corporations. While 40 million people were being laid off, fired, disengaged from jobs and income, the stock market indices gained back more than half of the losses initially incurred in late February and March. In the pretzel logic that is the inexorable ties between the Federal Reserve, the Treasury, and Wall Street, major cities erupting in riots and fires might be reason enough for fresh all-time highs in equities.
For the week, stocks continued their ten-week-long rally, tacking on 1.75 to over four percent on the major averages. The NASDAQ is within four percent of reaching all-time highs.
Over the shortened four-day week, treasuries were volatile with yields on the long end rising over the first three days but recoiling back on Friday as protests spread nationwide. The 30-year bond yield rose from 1.37% last Friday to 1.47% on Thursday, only to drop down to 1.41% Friday. The 10-year note closed out the week at with a two-week low yield of 0.65%.
Overall, the curve steepened to a spread of 125 basis points between the 2-year and 30-year with inversion between the six-month (0.18%) and 2-year (0.16%), indicative of recessionary conditions.
Oil prices seem to be consolidating. The July futures contract on WTI crude oil closed at $35.34 on Friday, in a range that appears to be suitable for all parties, considering the unlevel conditions on the ground.
The most volatility was evidenced in the precious metals space, especially silver, which advanced from a low of $16.80 per troy ounce to $18.05, closing out on Friday at $17.84. Gold finished up at $1728.70, off recent highs ($1748.30, May 20), though much improved from the week's low of $1694.60 per troy ounce.
On eBay, premiums remain elevated as shown by the most recent sales of one-ounce coins and bars:
Item: Low / High / Average / Median
1 oz silver coin: 25.50 / 39.71 / 28.47 / 27.47
1 oz silver bar: 18.49 / 43.90 / 30.36 / 29.70
1 oz gold coin: 1,853.63 / 1,975.49 / 1,882.36 / 1,876.89
1 oz gold bar: 1,658.20 / 1,883.81 / 1,828.94 / 1,849.35
Looking ahead, it's incredible how quickly the media focus changed from the fading coronavirus to the escalating street unrest. These are macro-issues, covering large swaths of people who are neither coalescing nor collectively unifying. If leaders emerge from the city protests, which is natural in large public movements, then it can be safely assumed that these protests and the background issues are real. If no leaders emerge, it's all more fakery and planned demolition of society, just like the pandemic, aka plandemic.
In the 1960s protests, leaders and organized groups were plentiful. Jerry Ruben, Abbie Hoffman, Dr. Martin Luther King Jr., Jane Fonda, Tom Hayden, Malcolm X, Eldridge Cleaver, Huey Newton, Angela Davis, and others are among the more memorable individuals from the era. Students for a Democratic Society (SDS), the Weathermen, the Southern Christian Leadership Conference, Black Panthers and many more splinter groups comprised peaceful and violent elements.
Songs expressed the prevailing movements of anti-war (peace) and civil rights. Joan Baez, Bob Dylan, Phil Ochs, Arlo Guthrie, Judy Collins, Pete Seeger, Peter Paul and Mary, the Byrds, Country Joe and the Fish, and many of the groups that played at Woodstock in 1969 were among the more prominent voices among the peace and civil rights movements.
One would expect leaders and groups to emerge and musicians to show the way forward. While it might be considered cynical to believe that current events are orchestrated by a devious deep state or other bad actors, it is not outside the realm of possibility. As the world has learned so often in recent times, conspiracy theory often emerges as conspiracy fact.
At the Close, Friday, May 29, 2002:
Dow: 25,383.11, -17.53 (-0.07%)
NASDAQ: 9,489.87, +120.88 (+1.29%)
S&P 500: 3,044.31, +14.58 (+0.48%)
NYSE: 11,802.95, -1.97 (-0.02%)
For the Week:
Dow: +917.95 (+3.75%)
NASDAQ: +165.29 (+1.77%)
S&P 500: 88.06 (+3.01%)
NYSE: +470.98 (+4.16%)
Friday, May 29, 2020
Trump Ramps Up Social Media Battle; Argentina Continues Defaulting; Gold, Silver Premiums Persist
Not that anybody should be concerned, but Argentina defaulted on a $500 million interest payment a week ago, on May 22nd. Money Daily had been covering the story but slipped up and missed the breaking news over the Memorial Day Weekend. No excuse. We blew it. 20 lashes.
Anyhow, it's not over down Buenos Aires way, as representatives from both sides - the Argentine government and a gaggle of international creditors - continue to seek a solution, setting a June 2nd date for a plan to restructure $66 billion of the country's debt. Realistically, this being the ninth time Argentina has defaulted on its obligations and the third time this century, hopes of reaching any kind of deal that satisfies both the creditor and debtor seems well removed from the realm of the possible.
President Trump issued another executive order Thursday afternoon, this one coming after Twitter tagged a couple of his tweets with fact-checks.
The order calls for new regulations under Section 230 of the Communications Decency Act "to make it so that social media companies that engage in censoring or any political conduct will not be able to keep their liability shield," Trump said.
The tweets in question concerned Trump's opposition to mail-in ballots in the upcoming November election, which he believes would result in a cascade of fraud. Twitter added some fact-checking language stating that fraud isn't an issue with absentee ballots.
That, and his announcement of a press conference Friday to address growing concerns over China's dispute with Hong Kong (and now India), sent markets tumbling into the red after making small gains in Thursday's session.
Escalating the situation, early Friday morning, Trump tweeted about the ongoing violence in Minneapolis and elsewhere:
Accessing the President's tweet on the Twitter platform brings up the following message: This Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible. Beside it is a button that gives the user the option to display the tweet or keep it hidden. That seems to be an exercise in futility on Twitter's part, possibly drawing even more attention to the tweet in question than had they just left it alone and allowed the public to decide and debate its appropriateness.
Twitter continues to dig its own grave because the President certainly isn't going to back down when he has the complete arsenal of the Department of Justice at his disposal. It's become rather obvious to just about everybody that Twitter, along with their social media counterparts, Google, Facebook, and others, that these companies have abused their free reign over what gets published and where on the internet for a long time without any oversight. Having set up their own rules and guidelines they've often trampled on first amendment rights of users, citing their status as private companies as cover for their subjective agenda.
It would appear that President Trump is serious about limiting their ability to shape opinion. It's certain that the issue will end up in the courts and may take years to resolve. Meanwhile, the mainstream TV networks, ABC, NBC, CBS, CNN, and Fox, and newspapers such as the New York Times and Washington Post continue to spread half-truths, fake news, and outright lies on a regular basis. Whether the president's wrath extends to limitations or punishments for biased reporting in other areas of the media remains to be seen, but there is sure to be intense focus on the media leading up to the November elections.
Elsewhere, confusion reigns supreme in the precious metals space. Since mid-March there has been a schism between the futures price of gold and the spot price, with the gap sometimes great enough to encourage arbitrage in a relatively risk-free trade. Usually, the spot price is a few dollars below the futures bid, but the spread has widened and exhibited volatile behavior recently. Silver has also joined the party, with spot and futures prices deviating sporadically.
Of course, the spot and futures prices are little more than bookmarks these days compared to the premium prices being paid for actual physical metal on eBay. Gold and silver are both sporting heavy premiums, with gold selling at the one ounce level at $120-180 over spot and one ounce silver going for $23-30 when the spot price has been hovering in the $16-17 range. Silver, probably the most undervalued commodity in the world, has approached 100% premiums in recent days.
As more people become aware of the fraudulent nature of futures trading where major players such as JP Morgan Chase are allowed to flaunt size limits and engage in spoofing, naked shorting, and are never forced to stand for delivery, physical markets are becoming the go-to for investors with serious intentions of protecting their wealth with precious metals.
Yields in the treasury space rose across the curve on Thursday, with the 30-year bond hitting 1.47%, a two-month high. The spread between the 2-year note (0.17%) and the 30 is now 130 basis points, 10 points higher than a week ago. Tighter lending conditions may not be in the Fed's best interests at this time, but the present issue is likely one of supply. The Fed has been begging fiscal authorities (congress and the president) to unleash more stimulus spending so as to facilitate the Fed's monetizing of the debt, spreading its largesse to equity market participants.
If the government isn't going to ramp up deficit spending, the Fed will be looking over its shoulder at rising rates with too little supply coming to market. This is just one of the unintended consequences of massive money printing on a global scale. At some point, with all hands outstretched, there's not enough to go around and a struggle is engaged for the scraps thrown to the market. The Fed is committed to buying everything, but if there's not enough everything around, they risk severe impairment of credit markets.
Congress needs to get on the bandwagon with all due alacrity lest the Fed run out of debt to monetize, jeopardizing the massive stock rally they have recently engendered.
Finally, in spite of the price of oil (once again, on the futures market) having roughly doubled over the past month, and with it, rising gas prices at the pump, there's still a massive glut on the supply side and slack demand against it. WTI crude in the $32-36 range is a resistance level the market will find difficult to overcome. Economies aren't roaring back to life following the global lockdowns, rather, they're reengaging in fits and starts, and not nearly at capacity. The major oil producers have done their level best to halt the price decline, but there's only so much production that can be cut from counties whose very existence relies upon regular selling of crude oil.
The summer, if authorities allow free movement, should be affordable, at least as concerns automotive touring.
Friday's trading session opens in a little more than an hour from this posting. With the Dow ahead by nearly 1000 points this week, unless there's a major pullback on Friday, Wall Street will shove another fat week of gains into America's face.
At the Close, Thursday, May 28, 2020:
Dow: 25,400.64, -147.63 (-0.58%)
NASDAQ: 9,368.99, -43.37 (-0.46%)
S&P 500: 3,029.73, -6.40 (-0.21%)
NYSE: 11,804.91, -32.62 (-0.28%)
Anyhow, it's not over down Buenos Aires way, as representatives from both sides - the Argentine government and a gaggle of international creditors - continue to seek a solution, setting a June 2nd date for a plan to restructure $66 billion of the country's debt. Realistically, this being the ninth time Argentina has defaulted on its obligations and the third time this century, hopes of reaching any kind of deal that satisfies both the creditor and debtor seems well removed from the realm of the possible.
President Trump issued another executive order Thursday afternoon, this one coming after Twitter tagged a couple of his tweets with fact-checks.
The order calls for new regulations under Section 230 of the Communications Decency Act "to make it so that social media companies that engage in censoring or any political conduct will not be able to keep their liability shield," Trump said.
The tweets in question concerned Trump's opposition to mail-in ballots in the upcoming November election, which he believes would result in a cascade of fraud. Twitter added some fact-checking language stating that fraud isn't an issue with absentee ballots.
That, and his announcement of a press conference Friday to address growing concerns over China's dispute with Hong Kong (and now India), sent markets tumbling into the red after making small gains in Thursday's session.
Escalating the situation, early Friday morning, Trump tweeted about the ongoing violence in Minneapolis and elsewhere:
....These THUGS are dishonoring the memory of George Floyd, and I won’t let that happen. Just spoke to Governor Tim Walz and told him that the Military is with him all the way. Any difficulty and we will assume control but, when the looting starts, the shooting starts. Thank you!
— Donald J. Trump (@realDonaldTrump) May 29, 2020
Accessing the President's tweet on the Twitter platform brings up the following message: This Tweet violated the Twitter Rules about glorifying violence. However, Twitter has determined that it may be in the public’s interest for the Tweet to remain accessible. Beside it is a button that gives the user the option to display the tweet or keep it hidden. That seems to be an exercise in futility on Twitter's part, possibly drawing even more attention to the tweet in question than had they just left it alone and allowed the public to decide and debate its appropriateness.
Twitter continues to dig its own grave because the President certainly isn't going to back down when he has the complete arsenal of the Department of Justice at his disposal. It's become rather obvious to just about everybody that Twitter, along with their social media counterparts, Google, Facebook, and others, that these companies have abused their free reign over what gets published and where on the internet for a long time without any oversight. Having set up their own rules and guidelines they've often trampled on first amendment rights of users, citing their status as private companies as cover for their subjective agenda.
It would appear that President Trump is serious about limiting their ability to shape opinion. It's certain that the issue will end up in the courts and may take years to resolve. Meanwhile, the mainstream TV networks, ABC, NBC, CBS, CNN, and Fox, and newspapers such as the New York Times and Washington Post continue to spread half-truths, fake news, and outright lies on a regular basis. Whether the president's wrath extends to limitations or punishments for biased reporting in other areas of the media remains to be seen, but there is sure to be intense focus on the media leading up to the November elections.
Elsewhere, confusion reigns supreme in the precious metals space. Since mid-March there has been a schism between the futures price of gold and the spot price, with the gap sometimes great enough to encourage arbitrage in a relatively risk-free trade. Usually, the spot price is a few dollars below the futures bid, but the spread has widened and exhibited volatile behavior recently. Silver has also joined the party, with spot and futures prices deviating sporadically.
Of course, the spot and futures prices are little more than bookmarks these days compared to the premium prices being paid for actual physical metal on eBay. Gold and silver are both sporting heavy premiums, with gold selling at the one ounce level at $120-180 over spot and one ounce silver going for $23-30 when the spot price has been hovering in the $16-17 range. Silver, probably the most undervalued commodity in the world, has approached 100% premiums in recent days.
As more people become aware of the fraudulent nature of futures trading where major players such as JP Morgan Chase are allowed to flaunt size limits and engage in spoofing, naked shorting, and are never forced to stand for delivery, physical markets are becoming the go-to for investors with serious intentions of protecting their wealth with precious metals.
Yields in the treasury space rose across the curve on Thursday, with the 30-year bond hitting 1.47%, a two-month high. The spread between the 2-year note (0.17%) and the 30 is now 130 basis points, 10 points higher than a week ago. Tighter lending conditions may not be in the Fed's best interests at this time, but the present issue is likely one of supply. The Fed has been begging fiscal authorities (congress and the president) to unleash more stimulus spending so as to facilitate the Fed's monetizing of the debt, spreading its largesse to equity market participants.
If the government isn't going to ramp up deficit spending, the Fed will be looking over its shoulder at rising rates with too little supply coming to market. This is just one of the unintended consequences of massive money printing on a global scale. At some point, with all hands outstretched, there's not enough to go around and a struggle is engaged for the scraps thrown to the market. The Fed is committed to buying everything, but if there's not enough everything around, they risk severe impairment of credit markets.
Congress needs to get on the bandwagon with all due alacrity lest the Fed run out of debt to monetize, jeopardizing the massive stock rally they have recently engendered.
Finally, in spite of the price of oil (once again, on the futures market) having roughly doubled over the past month, and with it, rising gas prices at the pump, there's still a massive glut on the supply side and slack demand against it. WTI crude in the $32-36 range is a resistance level the market will find difficult to overcome. Economies aren't roaring back to life following the global lockdowns, rather, they're reengaging in fits and starts, and not nearly at capacity. The major oil producers have done their level best to halt the price decline, but there's only so much production that can be cut from counties whose very existence relies upon regular selling of crude oil.
The summer, if authorities allow free movement, should be affordable, at least as concerns automotive touring.
Friday's trading session opens in a little more than an hour from this posting. With the Dow ahead by nearly 1000 points this week, unless there's a major pullback on Friday, Wall Street will shove another fat week of gains into America's face.
At the Close, Thursday, May 28, 2020:
Dow: 25,400.64, -147.63 (-0.58%)
NASDAQ: 9,368.99, -43.37 (-0.46%)
S&P 500: 3,029.73, -6.40 (-0.21%)
NYSE: 11,804.91, -32.62 (-0.28%)
Thursday, May 28, 2020
Violence Erupts In Minneapolis As Stocks Edge Higher, Closer to All-Time Levels, Fueling America's Outrage; 40 Million Unemployed
Nothing happens in a vacuum.
Violence has broken out in Minneapolis, where four policemen held down and killed George Floyd in broad daylight, one officer holding Floyd down with his knee on his throat, while Floyd, who was already handcuffed, repeatedly said he couldn't breath and onlookers pled with police to ease up on their restraint.
Floyd, 46, was killed on Monday, Memorial Day, in a manner shockingly similar to the death of Eric Garner in New York City, back in 2014. Garner was brought down and eventually killed by cops for supposedly selling "loosies," loose cigarettes.
Floyd's crime has yet to be revealed, though the incident occurred as police were investigating the possible use of counterfeit currency.
Wednesday night, a black man was shot and killed amid setting of fires and widespread looting and vandalism throughout the city.
It's difficult to understand how these Minneapolis police could not have known exactly what they were doing, considering the widespread coverage of the 2014 Garner killing. All four officers have been fired and will likely face charges, though they have not been, even though Minneapolis Mayor Jacob Frey has called for criminal charges to be levied against all four.
The resultant outburst from the frustrated community was to be expected. It's what happen when those in positions of power and authority oppress the public, as has been the case nationally since the outbreak of coronavirus. Lockdowns and stay-at-home orders by governors of almost every state have put people on a razor's edge and all that was needed was a spark - like Floyd's murder - to set the violent pattern in motion.
More violence will follow, as certain as night follows day. American citizens are angry and about to erupt as their freedoms have been limited, their employment vanishing, and their rights overridden.
On Thursday morning, the Labor Department announced that another 2.1 million Americans filed initial unemployment claims. Over the past ten weeks, more than 40 million have filed for unemployment nationally.
Meanwhile, stocks continue to feed off the easy Fed currency to send stocks higher and higher. Whatever the market is doing, as unemployment and the associated distress and anger swells, the optics are not good. Everyday Americans have been railing against the huge disparity in wealth between to top one percent (or 10 percent) and the rest of the country for years. A consistent rally in the face of what looks to be coming depression only adds fuel to the fire. The NASDAQ is within five percent of its all-time high. The S&P is a little more than 10 percent away from its record close back in February.
On Wednesday, stocks gained again, as gold and silver were pounded lower, though both are rebounding prior to Wall Street's opening bell.
Most states are heading into a second phase of reopening their economies, though results have been mixed. It's a near-certainty that the economy will suffer a massive failure for the second quarter, along the lines of a 40% decline in GDP, but for now at least, Wall Street seems content to look beyond that, charging higher, as earnings continue to disappoint.
Equity markets are out of control, now fully functioning under the thumb of the Federal Reserve and their now-$7 trillion balance sheet. This relentless rally off the March lows has huge trouble written into it.
At the Close, Wednesday, May 27, 2020:
Dow: 25,548.27, +553.16 (+2.21%)
NASDAQ: 9,412.36, +36.58 (+0.39%)
S&P 500: 3,036.13, +44.36 (+1.48%)
NYSE: 11,837.53, +234.53 (+2.02%)
Violence has broken out in Minneapolis, where four policemen held down and killed George Floyd in broad daylight, one officer holding Floyd down with his knee on his throat, while Floyd, who was already handcuffed, repeatedly said he couldn't breath and onlookers pled with police to ease up on their restraint.
Floyd, 46, was killed on Monday, Memorial Day, in a manner shockingly similar to the death of Eric Garner in New York City, back in 2014. Garner was brought down and eventually killed by cops for supposedly selling "loosies," loose cigarettes.
Floyd's crime has yet to be revealed, though the incident occurred as police were investigating the possible use of counterfeit currency.
Wednesday night, a black man was shot and killed amid setting of fires and widespread looting and vandalism throughout the city.
It's difficult to understand how these Minneapolis police could not have known exactly what they were doing, considering the widespread coverage of the 2014 Garner killing. All four officers have been fired and will likely face charges, though they have not been, even though Minneapolis Mayor Jacob Frey has called for criminal charges to be levied against all four.
The resultant outburst from the frustrated community was to be expected. It's what happen when those in positions of power and authority oppress the public, as has been the case nationally since the outbreak of coronavirus. Lockdowns and stay-at-home orders by governors of almost every state have put people on a razor's edge and all that was needed was a spark - like Floyd's murder - to set the violent pattern in motion.
More violence will follow, as certain as night follows day. American citizens are angry and about to erupt as their freedoms have been limited, their employment vanishing, and their rights overridden.
On Thursday morning, the Labor Department announced that another 2.1 million Americans filed initial unemployment claims. Over the past ten weeks, more than 40 million have filed for unemployment nationally.
Meanwhile, stocks continue to feed off the easy Fed currency to send stocks higher and higher. Whatever the market is doing, as unemployment and the associated distress and anger swells, the optics are not good. Everyday Americans have been railing against the huge disparity in wealth between to top one percent (or 10 percent) and the rest of the country for years. A consistent rally in the face of what looks to be coming depression only adds fuel to the fire. The NASDAQ is within five percent of its all-time high. The S&P is a little more than 10 percent away from its record close back in February.
On Wednesday, stocks gained again, as gold and silver were pounded lower, though both are rebounding prior to Wall Street's opening bell.
Most states are heading into a second phase of reopening their economies, though results have been mixed. It's a near-certainty that the economy will suffer a massive failure for the second quarter, along the lines of a 40% decline in GDP, but for now at least, Wall Street seems content to look beyond that, charging higher, as earnings continue to disappoint.
Equity markets are out of control, now fully functioning under the thumb of the Federal Reserve and their now-$7 trillion balance sheet. This relentless rally off the March lows has huge trouble written into it.
At the Close, Wednesday, May 27, 2020:
Dow: 25,548.27, +553.16 (+2.21%)
NASDAQ: 9,412.36, +36.58 (+0.39%)
S&P 500: 3,036.13, +44.36 (+1.48%)
NYSE: 11,837.53, +234.53 (+2.02%)
Wednesday, May 27, 2020
Fed Reduces Bank Reserve Requirements to ZERO Nationwide; Hydroxychloroquine Proves Effective; Stocks Gain; Gold, Silver Mashed
A few developments in the financial sphere over the holiday weekend were worth noting.
Reserve Requirements
As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.
Did anybody see or hear that announcement from the Fed?
It must have been announced via double-secret handshake pinky-swear written in invisible ink on flash paper. Thankfully, Mike Maloney has been keeping tabs on the out-of-control Fed and released the information in a video over the Memorial Day weekend.
Actions by the Federal Reserve concerning currency in circulation evokes memories of this famous South Park clip:
Also developing over the weekend (when nobody was paying attention), the World Health Organization announced a "temporary pause" to clinical trials on hydroxychloroquine (HCQ) as a treatment for COVID-19, based on a report from the medical journal, The Lancet, on May 22 which had published an observational study on HCQ and chloroquine and its effects on COVID-19 patients that have been hospitalized.
The study included some very sketchy data and besides being "observational", rather then relying on the gold standard: randomized double blind clinical trial, the study looked at patients already hospitalized from COVID-19, when the benefits of HCQ, especially when taken in conjunction with zinc, is effective as a preventative drug and also has shown in various anecdotal cases to be effective as a treatment for asymptomatic people who tested positive for COVID-19 and also those showing early symptoms of the virus.
A Texas nursing home treated patients and staff with HCQ, Azithromycin (Zithromax, Z-Pak) and zinc with amazing results, only one death from 56 residents and 33 staff who tested positive. Great video coverage in this report.
Costa Rica has been using HCQ effectively to combat COVID-19 with exceptional results. Costa Rica’s reported fatality rate of 1.2 per 1,000,000 population is one of the lowest in the world.
Coronavirus Treatment: India Expands Use Of Trump's Hydroxychloroquine As WHO Halts Trials
Dr. Chris Martenson, who has no bias or agenda, and has been producing some of the most informative and extensively-researched video reports on the virus since January, offers much more:
Oh, yeah, we can't test HCQ because it's so dangerous... to Big Pharma's bottom line. The generic drug costs roughly 10 cents per dose to produce.
And, in case you missed it, President Trump signed an executive order on May 19, which instructed all federal agencies to...
This was presented earlier on Money Daily, but advisors believe the president's executive order was created to keep federal and state agencies on short leases as regards enforcement of stay-at-home, lockdown, social distancing, and other orders and restrictions on the American public and especially on small business.
The markets on Tuesday were the usual mix of stocks and oil up, gold and silver smashed, bonds flat.
At the Close, Tuesday, May 26, 2020:
Dow: 24,995.11, +529.95 (+2.17%)
NASDAQ: 9,340.22, +15.63 (+0.17%)
S&P 500 2,991.77, +36.32 (+1.23%)
NYSE: 11,603.00, +271.03 (+2.39%)
Reserve Requirements
As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions.
Did anybody see or hear that announcement from the Fed?
It must have been announced via double-secret handshake pinky-swear written in invisible ink on flash paper. Thankfully, Mike Maloney has been keeping tabs on the out-of-control Fed and released the information in a video over the Memorial Day weekend.
Actions by the Federal Reserve concerning currency in circulation evokes memories of this famous South Park clip:
Also developing over the weekend (when nobody was paying attention), the World Health Organization announced a "temporary pause" to clinical trials on hydroxychloroquine (HCQ) as a treatment for COVID-19, based on a report from the medical journal, The Lancet, on May 22 which had published an observational study on HCQ and chloroquine and its effects on COVID-19 patients that have been hospitalized.
The study included some very sketchy data and besides being "observational", rather then relying on the gold standard: randomized double blind clinical trial, the study looked at patients already hospitalized from COVID-19, when the benefits of HCQ, especially when taken in conjunction with zinc, is effective as a preventative drug and also has shown in various anecdotal cases to be effective as a treatment for asymptomatic people who tested positive for COVID-19 and also those showing early symptoms of the virus.
A Texas nursing home treated patients and staff with HCQ, Azithromycin (Zithromax, Z-Pak) and zinc with amazing results, only one death from 56 residents and 33 staff who tested positive. Great video coverage in this report.
Costa Rica has been using HCQ effectively to combat COVID-19 with exceptional results. Costa Rica’s reported fatality rate of 1.2 per 1,000,000 population is one of the lowest in the world.
Coronavirus Treatment: India Expands Use Of Trump's Hydroxychloroquine As WHO Halts Trials
Dr. Chris Martenson, who has no bias or agenda, and has been producing some of the most informative and extensively-researched video reports on the virus since January, offers much more:
Oh, yeah, we can't test HCQ because it's so dangerous... to Big Pharma's bottom line. The generic drug costs roughly 10 cents per dose to produce.
And, in case you missed it, President Trump signed an executive order on May 19, which instructed all federal agencies to...
"address this economic emergency by rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery, consistent with applicable law and with protection of the public health and safety, with national and homeland security, and with budgetary priorities and operational feasibility."
This was presented earlier on Money Daily, but advisors believe the president's executive order was created to keep federal and state agencies on short leases as regards enforcement of stay-at-home, lockdown, social distancing, and other orders and restrictions on the American public and especially on small business.
The markets on Tuesday were the usual mix of stocks and oil up, gold and silver smashed, bonds flat.
At the Close, Tuesday, May 26, 2020:
Dow: 24,995.11, +529.95 (+2.17%)
NASDAQ: 9,340.22, +15.63 (+0.17%)
S&P 500 2,991.77, +36.32 (+1.23%)
NYSE: 11,603.00, +271.03 (+2.39%)
Sunday, May 24, 2020
WEEKEND WRAP: Governments Throw $$$ Billions At Drug Companies; Mall Rents Go Unpaid; Unemployment Soaring; Stocks Higher
Spurred by an announcement by Moderna (MRNA) that early trials of a possible COVID-19 vaccine were positive, stocks rode a big Monday rally to better than three percent gains across the major indices. All but the NYSE Composite closed at 11-week highs, the Comp. falling just points short.
The irony of the rally was that Moderna, a company that has never made a single dime of profit (they've lost $1.5 billion since 2016), closed last Friday at 66.68, finished Monday at an even $80 per share, but closed out the week at 69.00. In between, there were some big paydays for insiders. If that wasn't proof enough that the market is a crony capitalist playground, then something's wrong with people's world views.
It was the ultimate slap in the face to the American public by the rich and connected, the one-percenters, who made a show of fake news over something ultimately immaterial. It was a very sad display of fascism in practice.
To make matters even worse, Moderna received up to $483 million in federal funding to accelerate development of its coronavirus vaccine. Governments around the world are throwing money at well-heeled companies working on a vaccine. In the United States, the Biomedical Advanced Research and Development Authority (BARDA), a federal agency that funds disease-fighting technology, has announced investments of nearly $1 billion to support coronavirus vaccine development and the scale-up of manufacturing for promising candidates. Johnson and Johnson, Sanofi, and GlaxoSmithKline are among about 100 companies being funded for research toward a coronavirus vaccine by countries from Canada, to Singapore, to France.
The US government committed up to $1.2 billion to fund Oxford University and drug maker, AstraZeneca, in a race to produce a vaccine by October, it was announced on Friday.
The quickest a vaccine has ever been developed is four years from phase one trials to working vaccine on the market. No vaccine for a coronavirus has ever been successfully developed. SARS and MERS are variants of coronaviruses. There are no vaccines to protect against them.
This is just the common folly of the age in which we live. Instead of spending time explaining to people how to strengthen their individual immune systems - the best defense against all diseases and viruses - world governments spend taxpayer dollars funding companies that don't need any extra money. It's an incredible waste of capital, but you can bet the executives of the Big Pharma companies (one of Washington's biggest lobbying groups) and high-ranking scientists are making bank on your dollar.
Meanwhile, back in the real world, the "official" unemployment figure is 14.7%, with more than 36 million Americans out of work. Wall Street continues to party while Main Street gets the shaft, as usual. Lockdowns and social distancing restrictions have blown a hole in small businesses, many of which will never recover and will be bankrupt within months, if not already.
Malls are going broke. The biggest mall in the country, Minnesota's Mall of America, is two months delinquent on it's $1.4 billion loan. Other mall landlords report collecting less than 25% of rent due from April and May. With June approaching quickly, many retailers will be three months behind on rent payments and subject to lockouts, forced liquidations, and other draconian measures written into their leases.
Bankruptcies are mounting and delinquency notices are flying around everywhere. With retail operations - from clothing stores to hair salons to baseball card shops and everything in between - suffering as a result of the nearly nationwide two-month lockdown, many employees who were furloughed will not have jobs to go back to when everything begins to get back to some semblance of normal. That means extended unemployment for millions, poverty and homelessness set to soar.
The federal government's additional $600 a week in unemployment benefits via the CARES act will run out at the end of July, just in time for back-to-school sales that may not happen because some schools won't be reopening and many colleges are planning to allow only limited on-campus activity, with many classes offered via the internet only.
The world has changed, and is changing, though it doesn't appear to be for the better, at least at first blush.
Gold and silver caught bids on the paper markets this week with gold trading as high as $1756.90 per ounce, closing out at $1732.70 bid. Silver was an even better performer, ripping through the $17 per ounce price on Monday, trading as high as $17.57 per ounce before settling in at $17.19 on Friday.
In the physical market, premiums have begun to ease after an incredible supply-demand tug-of-war. Dealers are still facing shortages of certain items, but on eBay, at least, prices were lower for the week, although still well above spot prices.
Here are the most recent prices (Sunday, May 24) for specific items on eBay:
Item / Low / High / Average / Median
1 oz silver coin / 22.74 / 38.98 / 30.72 / 29.60
1 oz silver bar / 25.45 / 39.50 / 29.84 / 26.98
1 oz gold coin / 1,855.00 / 1,985.00 / 1,894.48 / 1,894.27
1 oz gold bar / 1,839.93 / 1,987.95 / 1,869.38 / 1,855.52
Oil was up, treasuries were fairly flat for the week. It's a beautiful holiday weekend, so we're calling this a wrap, right here.
Get out and get some sun!
At the Close, Friday, May 22, 2020:
Dow: 24,465.16, -8.94 (-0.04%)
NASDAQ: 9,324.59, +39.71 (+0.43%)
S&P 500: 2,955.45, +6.94 (+0.24%)
NYSE: 11,331.97, -19.63 (-0.17%)
For the Week:
Dow: +779.74 (+3.29%)
NASDAQ: +310.03 (+3.44%)
S&P 500: +91.75 (+3.20%)
NYSE: +384.65 (+3.51%)
The irony of the rally was that Moderna, a company that has never made a single dime of profit (they've lost $1.5 billion since 2016), closed last Friday at 66.68, finished Monday at an even $80 per share, but closed out the week at 69.00. In between, there were some big paydays for insiders. If that wasn't proof enough that the market is a crony capitalist playground, then something's wrong with people's world views.
It was the ultimate slap in the face to the American public by the rich and connected, the one-percenters, who made a show of fake news over something ultimately immaterial. It was a very sad display of fascism in practice.
To make matters even worse, Moderna received up to $483 million in federal funding to accelerate development of its coronavirus vaccine. Governments around the world are throwing money at well-heeled companies working on a vaccine. In the United States, the Biomedical Advanced Research and Development Authority (BARDA), a federal agency that funds disease-fighting technology, has announced investments of nearly $1 billion to support coronavirus vaccine development and the scale-up of manufacturing for promising candidates. Johnson and Johnson, Sanofi, and GlaxoSmithKline are among about 100 companies being funded for research toward a coronavirus vaccine by countries from Canada, to Singapore, to France.
The US government committed up to $1.2 billion to fund Oxford University and drug maker, AstraZeneca, in a race to produce a vaccine by October, it was announced on Friday.
The quickest a vaccine has ever been developed is four years from phase one trials to working vaccine on the market. No vaccine for a coronavirus has ever been successfully developed. SARS and MERS are variants of coronaviruses. There are no vaccines to protect against them.
This is just the common folly of the age in which we live. Instead of spending time explaining to people how to strengthen their individual immune systems - the best defense against all diseases and viruses - world governments spend taxpayer dollars funding companies that don't need any extra money. It's an incredible waste of capital, but you can bet the executives of the Big Pharma companies (one of Washington's biggest lobbying groups) and high-ranking scientists are making bank on your dollar.
Meanwhile, back in the real world, the "official" unemployment figure is 14.7%, with more than 36 million Americans out of work. Wall Street continues to party while Main Street gets the shaft, as usual. Lockdowns and social distancing restrictions have blown a hole in small businesses, many of which will never recover and will be bankrupt within months, if not already.
Malls are going broke. The biggest mall in the country, Minnesota's Mall of America, is two months delinquent on it's $1.4 billion loan. Other mall landlords report collecting less than 25% of rent due from April and May. With June approaching quickly, many retailers will be three months behind on rent payments and subject to lockouts, forced liquidations, and other draconian measures written into their leases.
Bankruptcies are mounting and delinquency notices are flying around everywhere. With retail operations - from clothing stores to hair salons to baseball card shops and everything in between - suffering as a result of the nearly nationwide two-month lockdown, many employees who were furloughed will not have jobs to go back to when everything begins to get back to some semblance of normal. That means extended unemployment for millions, poverty and homelessness set to soar.
The federal government's additional $600 a week in unemployment benefits via the CARES act will run out at the end of July, just in time for back-to-school sales that may not happen because some schools won't be reopening and many colleges are planning to allow only limited on-campus activity, with many classes offered via the internet only.
The world has changed, and is changing, though it doesn't appear to be for the better, at least at first blush.
Gold and silver caught bids on the paper markets this week with gold trading as high as $1756.90 per ounce, closing out at $1732.70 bid. Silver was an even better performer, ripping through the $17 per ounce price on Monday, trading as high as $17.57 per ounce before settling in at $17.19 on Friday.
In the physical market, premiums have begun to ease after an incredible supply-demand tug-of-war. Dealers are still facing shortages of certain items, but on eBay, at least, prices were lower for the week, although still well above spot prices.
Here are the most recent prices (Sunday, May 24) for specific items on eBay:
Item / Low / High / Average / Median
1 oz silver coin / 22.74 / 38.98 / 30.72 / 29.60
1 oz silver bar / 25.45 / 39.50 / 29.84 / 26.98
1 oz gold coin / 1,855.00 / 1,985.00 / 1,894.48 / 1,894.27
1 oz gold bar / 1,839.93 / 1,987.95 / 1,869.38 / 1,855.52
Oil was up, treasuries were fairly flat for the week. It's a beautiful holiday weekend, so we're calling this a wrap, right here.
Get out and get some sun!
At the Close, Friday, May 22, 2020:
Dow: 24,465.16, -8.94 (-0.04%)
NASDAQ: 9,324.59, +39.71 (+0.43%)
S&P 500: 2,955.45, +6.94 (+0.24%)
NYSE: 11,331.97, -19.63 (-0.17%)
For the Week:
Dow: +779.74 (+3.29%)
NASDAQ: +310.03 (+3.44%)
S&P 500: +91.75 (+3.20%)
NYSE: +384.65 (+3.51%)
Friday, May 22, 2020
Stocks Take A Break, But Should Not Be At These Obscene Levels; Dividend Cuts Rampant
For a day at least, reality set into equities, as early gains on the major indices were thwarted by waves of selling throughout the session.
The Dow Jones Industrial Average, which was higher by more than 140 points, peaked before 10:30 am and ended the day 101 points lower. Stuck at a very stubborn resistance level in the 24,300-24,650 range, this current attempt to break out is the fourth since the market collapse of March. Repeated efforts to surge through to new recent highs has met with considerable pressure on the sell side of the equation for the past two months and it appears that the rally has either lost all of its momentum or the investment community has become skeptical of the move higher so early in the cycle.
While the real economy has not even bottomed out yet, stocks seem to be of a mind of their own, pricing in every positive development but failing to realize the overall negative consequences from lockdowns and a dramatically reduced global economy.
More to the point, first quarter earnings for the bulk of companies on the exchanges have been recorded and they were, for the most part, uninspiring, with more than a handful of companies issuing cautious forward guidance and a slew of firms cutting dividends or eliminating them altogether. The recent gains have been fueled only by excessive amounts of Fed currency seeking a temporary place to park. Thus, share prices are unlikely to remain elevated for much longer.
More than 100 companies cut their dividend payout in the week ending April 16, and that number is on top of hundreds of other companies that have slashed and burned shareholders with dividend reductions or eliminations.
The folks at TradingStockAlerts.com keeps track of these important developments on a weekly basis and the numbers are scary for anyone investing in stocks for steady income.
What happens when second quarter GDP numbers arrive in July and show the economy slowing by 40% or further? Along with companies cutting their dividends, there's the likelihood of declines in the value of their shares as well, as profitability is eroded as markets shrink.
With Wall Street giddy with Fed fun money, it's something to thank about going forward.
Funny thing is, stocks are right about where they were just after the moonshot open Monday morning. They've managed to hold onto most of the gains from that huge gap up open, but have not moved forward since. How long stocks can maintain the facade of robustness when 20-25% of the working population is out of a job or thousands of companies are cutting dividends is unknown. What is known, however, is that financial fakery has been rewarded, but the probable end game is something completely different, with many more losers than winners.
Like it or not, the economic crisis is real and just getting started.
At the Close, Thursday, May 21, 2020:
Dow: 24,474.12, -101.78 (-0.41%)
NASDAQ: 9,284.88, -90.90 (-0.97%)
S&P 500: 2,948.51, -23.10 (-0.78%)
NYSE: 11,351.60, -68.44 (-0.60%)
The Dow Jones Industrial Average, which was higher by more than 140 points, peaked before 10:30 am and ended the day 101 points lower. Stuck at a very stubborn resistance level in the 24,300-24,650 range, this current attempt to break out is the fourth since the market collapse of March. Repeated efforts to surge through to new recent highs has met with considerable pressure on the sell side of the equation for the past two months and it appears that the rally has either lost all of its momentum or the investment community has become skeptical of the move higher so early in the cycle.
While the real economy has not even bottomed out yet, stocks seem to be of a mind of their own, pricing in every positive development but failing to realize the overall negative consequences from lockdowns and a dramatically reduced global economy.
More to the point, first quarter earnings for the bulk of companies on the exchanges have been recorded and they were, for the most part, uninspiring, with more than a handful of companies issuing cautious forward guidance and a slew of firms cutting dividends or eliminating them altogether. The recent gains have been fueled only by excessive amounts of Fed currency seeking a temporary place to park. Thus, share prices are unlikely to remain elevated for much longer.
More than 100 companies cut their dividend payout in the week ending April 16, and that number is on top of hundreds of other companies that have slashed and burned shareholders with dividend reductions or eliminations.
The folks at TradingStockAlerts.com keeps track of these important developments on a weekly basis and the numbers are scary for anyone investing in stocks for steady income.
What happens when second quarter GDP numbers arrive in July and show the economy slowing by 40% or further? Along with companies cutting their dividends, there's the likelihood of declines in the value of their shares as well, as profitability is eroded as markets shrink.
With Wall Street giddy with Fed fun money, it's something to thank about going forward.
Funny thing is, stocks are right about where they were just after the moonshot open Monday morning. They've managed to hold onto most of the gains from that huge gap up open, but have not moved forward since. How long stocks can maintain the facade of robustness when 20-25% of the working population is out of a job or thousands of companies are cutting dividends is unknown. What is known, however, is that financial fakery has been rewarded, but the probable end game is something completely different, with many more losers than winners.
Like it or not, the economic crisis is real and just getting started.
At the Close, Thursday, May 21, 2020:
Dow: 24,474.12, -101.78 (-0.41%)
NASDAQ: 9,284.88, -90.90 (-0.97%)
S&P 500: 2,948.51, -23.10 (-0.78%)
NYSE: 11,351.60, -68.44 (-0.60%)
Thursday, May 21, 2020
Dear President Trump: Please Fire Dr. Fauci and Dr. Birx and Shut Down the CDC
Dear President Trump and all Americans:
Have you had enough of the news and fear-mongering over coronavirus, or COVID-19, or Wuhan Flu, or whatever they're calling it today?
For months the media and government agencies have been cramming this infectious disease down our throats - not literally, mind you, but don't put that past them - closing public places (paid for with your tax dollars), issuing non-enforceable stay-at-home orders, telling everybody to stay six feet apart (as though standing within four feet or seven feet is going to make a difference), telling us to prepare for a "second wave" even as the first wave is winding down.
All along, the CDC has managed to put forward inconsistent and misleading information, including telling people that wearing masks was not an effective measure in controlling the spread of the virus. Extensive data from around the world - particularly in Japan, Singapore, and Hong Kong, where mask-wearing is routine and acceptable behavior - proves the CDC wrong. The CDC also likes to remind everybody to wash their hands and not touch their faces, but never once have they advised taking vitamins C, D, and Zinc, or to take regular doses of elderberry syrup to improve one's immune system.
They've promoted drugs that haven't been proven effective against the virus, like remdesivir, while at the same time bad-mouthing treatments that have been used extensively around the world in preventing and reducing the severity of illness, such as hydroxychloroquine with zinc. Additionally, the CDC spokespeople, Drs. Anthony Fauci and Deborah Birx, have suggested that a vaccine might be found when, as doctors and scientists, they surely know that the most likely outcome from billions of dollars spent on research will be wasted because no vaccine against coronaviruses has ever been developed. None. Zero.
COVID-19 (also known as SARS-CoV-2) is a strain of SARS-CoV, which is a coronavirus that spread rapidly from China in November, 2002 and was brought under control by 2003. 774 people died from SARS. SARS-CoV-2 is the seventh coronavirus known to infect humans. The CDC's original estimate was that it could kill up to two million Americans.
They told us it could be spread by touching objects with traces of the disease on them and also said that it could be spread by people couching or sneezing up to six feet away, when actual science has proven that droplets from people just talking normally could travel as far as 29 feet. They also never warned anybody about how easily the virus could spread in enclosed spaces, especially those with modern ventilation systems (central air).
High on the hit list of things the CDC was completely wrong about was the use of ventilators. As it turns out, ventilators, as a last resort, are not recommended against this virus. Over 80% of people who were put on ventilators eventually died.
Now they're telling us that after wiping down everything from your kitchen counter to packages from Amazon, that the virus is not very infectious from surfaces. Thanks for the heads up, losers.
The CDC has been nothing but a headache and an annoyance throughout this viral episode. The agency, as most government agencies, is nothing more than a conduit for Big Pharma and multi-national drug companies.
Br. Deborah Birx is a lifelong public employee. She's never had a job outside of government, so, at age 64, she's probably socked enough money away to take a semi-early retirement. Good riddance to you and all your scarves, none of which have ever been pulled up over your mouth and nose, where they belong.
From 1983 to 1986, Birx completed two fellowships in clinical immunology in the areas of allergies and diagnostics, where she worked in Anthony Fauci's lab, so the two are well acquainted.
In January 2014, President Barack Obama nominated Birx to be the Ambassador at Large and U.S. Global AIDS Coordinator as part of the President's Emergency Plan for AIDS Relief (PEPFAR) program. Fauci played a significant role in the early 2000s in creating the PEPFAR, an agency that has wasted billions of tax dollars on AIDS prevention in Africa, with mixed results.
For more on PEPFAR, see Is AIDS US $90B Taxpayer Dollars A Global Slush Fund?
Fauci, who will turn 80 on December 24 (we should all be so lucky to look as well as he does at that age, have to give him that), is also a lifetime government employee. In 1968, he joined the National Institutes of Health (NIH) as a clinical associate in the Laboratory of Clinical Investigation (LCI) at the National Institute of Allergy and Infectious Diseases. In 1974, he became Head of the Clinical Physiology Section, LCI, and in 1980 was appointed Chief of the Laboratory of Immunoregulation. In 1984, he became director of NIAID, a position he still holds today.
To see how deeply in bed with big drug companies the CDC is, one need only do some cursory research on the internet. It's all there. Here are a few (of many) examples:
LewRockwell.com: The CDC, NIH, Big Pharma, Big Medicine, AAP, AMA Bill Gates Plan to Abolish the Informed Consent Ethical Principle and Vaccinate Everybody
Circleofdocs.com: Is the CDC Sleeping With Drug Companies? You Decide
Science Defies Politics: COVID-19 Panel Gilead Ties
National File: The Dark Truth About Fauci and Birx, Bill Gates And Globalist Elites
Those are just for starters. There are hundreds, if not thousands of reports of the extensive, deep ties Drs. Fauci and Birx and the CDC have to Big Pharma, Bill Gates, and the discredited, corrupt World Health Organization (WHO).
Get rid of these people and their agency, please, before they inflict more pain and suffering on the American public. We've had enough.
Regards,
Fearless Rick Gagliano
Publisher, dtmagazine.com, Money Daily
But wait, there's more!
Here's Gregory Mannarino, the Robin Hood of Wall Street, with his hair on fire on May 19 over the President's Executive Order that calls for "rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery" and Congressional testimony from Treasury Secretary, Steven Mnuchin, and Federal Reserve Chairman, Jerome Powell.
President Trump's Executive Order is here. Anybody who operates a business or enterprise anywhere, doing anything, should make multiple copies of this order and distribute them widely throughout the business community and shove them in the face of any government regulator who wants information on anything related to any business.
You can be sure that the Wall Street hotshots will be using this order to get around any and all regulations that would, in even the slightest way, affect their profitability negatively. President Trump has effectively de-regulated the entirety of American business. Read it and think about it.
Stocks were up again on Wednesday, but that's becoming a side show for rubes.
And, by the way, the Bank of England issued bonds with a negative yield for the first time on Wednesday and another 2.4 million people signed up for initial unemployment benefits last week.
At the Close, Wednesday, May 19, 2020:
Dow: 24,575.90, +369.04 (+1.52%)
NASDAQ: 9,375.78. +190.67 (+2.08%)
S&P 500: 2,971.61, +48.67 (+1.67%)
NYSE: 11,420.04, +171.06 (+1.52%)
Have you had enough of the news and fear-mongering over coronavirus, or COVID-19, or Wuhan Flu, or whatever they're calling it today?
For months the media and government agencies have been cramming this infectious disease down our throats - not literally, mind you, but don't put that past them - closing public places (paid for with your tax dollars), issuing non-enforceable stay-at-home orders, telling everybody to stay six feet apart (as though standing within four feet or seven feet is going to make a difference), telling us to prepare for a "second wave" even as the first wave is winding down.
All along, the CDC has managed to put forward inconsistent and misleading information, including telling people that wearing masks was not an effective measure in controlling the spread of the virus. Extensive data from around the world - particularly in Japan, Singapore, and Hong Kong, where mask-wearing is routine and acceptable behavior - proves the CDC wrong. The CDC also likes to remind everybody to wash their hands and not touch their faces, but never once have they advised taking vitamins C, D, and Zinc, or to take regular doses of elderberry syrup to improve one's immune system.
They've promoted drugs that haven't been proven effective against the virus, like remdesivir, while at the same time bad-mouthing treatments that have been used extensively around the world in preventing and reducing the severity of illness, such as hydroxychloroquine with zinc. Additionally, the CDC spokespeople, Drs. Anthony Fauci and Deborah Birx, have suggested that a vaccine might be found when, as doctors and scientists, they surely know that the most likely outcome from billions of dollars spent on research will be wasted because no vaccine against coronaviruses has ever been developed. None. Zero.
COVID-19 (also known as SARS-CoV-2) is a strain of SARS-CoV, which is a coronavirus that spread rapidly from China in November, 2002 and was brought under control by 2003. 774 people died from SARS. SARS-CoV-2 is the seventh coronavirus known to infect humans. The CDC's original estimate was that it could kill up to two million Americans.
They told us it could be spread by touching objects with traces of the disease on them and also said that it could be spread by people couching or sneezing up to six feet away, when actual science has proven that droplets from people just talking normally could travel as far as 29 feet. They also never warned anybody about how easily the virus could spread in enclosed spaces, especially those with modern ventilation systems (central air).
High on the hit list of things the CDC was completely wrong about was the use of ventilators. As it turns out, ventilators, as a last resort, are not recommended against this virus. Over 80% of people who were put on ventilators eventually died.
Now they're telling us that after wiping down everything from your kitchen counter to packages from Amazon, that the virus is not very infectious from surfaces. Thanks for the heads up, losers.
“It may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes. This is not thought to be the main way the virus spreads, but we are still learning more about this virus,”
-- New CDC Guidelines
The CDC has been nothing but a headache and an annoyance throughout this viral episode. The agency, as most government agencies, is nothing more than a conduit for Big Pharma and multi-national drug companies.
Br. Deborah Birx is a lifelong public employee. She's never had a job outside of government, so, at age 64, she's probably socked enough money away to take a semi-early retirement. Good riddance to you and all your scarves, none of which have ever been pulled up over your mouth and nose, where they belong.
From 1983 to 1986, Birx completed two fellowships in clinical immunology in the areas of allergies and diagnostics, where she worked in Anthony Fauci's lab, so the two are well acquainted.
In January 2014, President Barack Obama nominated Birx to be the Ambassador at Large and U.S. Global AIDS Coordinator as part of the President's Emergency Plan for AIDS Relief (PEPFAR) program. Fauci played a significant role in the early 2000s in creating the PEPFAR, an agency that has wasted billions of tax dollars on AIDS prevention in Africa, with mixed results.
For more on PEPFAR, see Is AIDS US $90B Taxpayer Dollars A Global Slush Fund?
Fauci, who will turn 80 on December 24 (we should all be so lucky to look as well as he does at that age, have to give him that), is also a lifetime government employee. In 1968, he joined the National Institutes of Health (NIH) as a clinical associate in the Laboratory of Clinical Investigation (LCI) at the National Institute of Allergy and Infectious Diseases. In 1974, he became Head of the Clinical Physiology Section, LCI, and in 1980 was appointed Chief of the Laboratory of Immunoregulation. In 1984, he became director of NIAID, a position he still holds today.
To see how deeply in bed with big drug companies the CDC is, one need only do some cursory research on the internet. It's all there. Here are a few (of many) examples:
LewRockwell.com: The CDC, NIH, Big Pharma, Big Medicine, AAP, AMA Bill Gates Plan to Abolish the Informed Consent Ethical Principle and Vaccinate Everybody
Circleofdocs.com: Is the CDC Sleeping With Drug Companies? You Decide
Science Defies Politics: COVID-19 Panel Gilead Ties
National File: The Dark Truth About Fauci and Birx, Bill Gates And Globalist Elites
Those are just for starters. There are hundreds, if not thousands of reports of the extensive, deep ties Drs. Fauci and Birx and the CDC have to Big Pharma, Bill Gates, and the discredited, corrupt World Health Organization (WHO).
Get rid of these people and their agency, please, before they inflict more pain and suffering on the American public. We've had enough.
Regards,
Fearless Rick Gagliano
Publisher, dtmagazine.com, Money Daily
But wait, there's more!
Here's Gregory Mannarino, the Robin Hood of Wall Street, with his hair on fire on May 19 over the President's Executive Order that calls for "rescinding, modifying, waiving, or providing exemptions from regulations and other requirements that may inhibit economic recovery" and Congressional testimony from Treasury Secretary, Steven Mnuchin, and Federal Reserve Chairman, Jerome Powell.
President Trump's Executive Order is here. Anybody who operates a business or enterprise anywhere, doing anything, should make multiple copies of this order and distribute them widely throughout the business community and shove them in the face of any government regulator who wants information on anything related to any business.
You can be sure that the Wall Street hotshots will be using this order to get around any and all regulations that would, in even the slightest way, affect their profitability negatively. President Trump has effectively de-regulated the entirety of American business. Read it and think about it.
Stocks were up again on Wednesday, but that's becoming a side show for rubes.
And, by the way, the Bank of England issued bonds with a negative yield for the first time on Wednesday and another 2.4 million people signed up for initial unemployment benefits last week.
At the Close, Wednesday, May 19, 2020:
Dow: 24,575.90, +369.04 (+1.52%)
NASDAQ: 9,375.78. +190.67 (+2.08%)
S&P 500: 2,971.61, +48.67 (+1.67%)
NYSE: 11,420.04, +171.06 (+1.52%)
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