Who turned out the lights?

If you thought yesterday was a slow trading day, you may have wanted to hang around for today's snoozy session.

Except for a flurry of trading in the final minutes, it was one of the dullest sessions of the year, so make that two days in a row that investors have pretty much sat on the sidelines.

Dow 13,090.86 -30.49; NASDAQ 2,521.30 +12.71; S&P 500 1,447.12 +1.57; NYSE Composite 9,332.54 +6.33

There was no need for Fed injections of liquidity or PPT behind-the-scenes maneuvers. There was little urgency to even show up on the trading floor. Nothing much at all was happening. It was really, really, really quiet. Almost spooky.

The Dow was down, but all the other indices closed lower. This is what happens when governments interfere in free markets. Inertia. Nobody trusts anything any more. It's neither a buyer's nor a seller's market. This is a dead market and that's not a very appealing state of affairs.

Without trading activity, people will soon begin another round of selling. While the market hates uncertainty (and there's still plenty of that going around), it absolutely despises complacency. If nobody's interested in buying, then stocks, like just about any other traded commodity, get marked down, just like a sale on shoes that have gone out of style.

Advancing issues superseded decliners by a 4-3 margin. New lows outdid new highs for the umpteenth consecutive session, 190-66.

There was just a little more interest in the oil market, where September futures expired with a whimper rather than a bang, down $1.65 to $69.45. Oil under $70 a barrel? I thought supplies were tight? What's next? $2.00 gas?

Even commodities markets were cool. Gold was down 30 cents to $666.30. Silver is rapidly approaching the bargain basement. On the day it lost 23 cents to $11.67 an ounce.

The truth of the matter in all of this is that there really is a liquidity crisis. We're not out of it. In fact, we're just getting started. A lot of hedge funds are out of the market, forced to liquidate to cover their market calls. Big money is sitting still, preferring bonds for the moment. Wall Street is now seen as having huge cracks in the pavement, big enough for large things to fall through, like people, businesses, banks and buildings.

Big Ben Bernanke made an appearance at the Capitol, reassuring Senator (hello, I'm running for president too) Dodd, Chairman of the Senate Finance Committee, that he would make use of "all tools necessary" to calm the volatile financial markets. Judging by the action the past two days, he already has.

Bernanke is nothing but a hack, and a rookie at that. Whatever he does will be viewed skeptically. Remember, this is an avowed adherent of "targeted inflation." His core ideas, roundly expressed in a 2002 speech titled, Deflation: Making Sure "It" Doesn't Happen Here are somewhat along the lines of dropping money from helicopters.

Essentially, Bernanke's solution to every kind of crisis, as was that his predecessor, Alan Greenspan, is to throw money at it. That's exactly what he did by lowering the lending rate and requirements in the discount rate, so a cut in the federal funds rate shouldn't be far behind. With the markets now drubbed into an unconscious trance, he'll probably make an "emergency" cut before the Fed's next scheduled meeting on September 18.

God save us all. We're being led down the garden path by a gang of fools and thieves.

Gentle PPT nudging

Lest we all believe that 13,000 on the Dow is a number beneath which we dare not tread, today's positive close bears little resemblance to the underlying market realities.

About 2:15 pm ET, the Dow was resting comfortably at the magic 13,000 mark, when all of a sudden buying broke out like a spreading fire. A little over an hour later, the Dow had risen to its high of the day, 13,181.66 - a gentle nudge (no doubt by our friends at the President's Working Group on Financial Markets, otherwise known as the Plunge Protection Team or PPT) of 181 points to the good.

While the market pared off some 60 points of froth over the final 30 minutes, the volume tells much of the story. Nobody was actively trading. In fact, today's action was among the slowest of the year. Fewer shares were traded today than any other since July 3rd, a half-session at that. Apparently, the 600-point boost given to the market between Thursday afternoon and Friday was not enough to quell the fears of traders, other than the most intrepid (or stupid).

The ongoing mess that is the world banking and credit system has recently come within a whisker of complete collapse and Wall Street has taken notice. Either that, or half the brokers and fund managers in the world decided to begin their summer vacation today.

Dow 13,121.35 +42.27; NASDAQ 2,508.59 +3.56; S&P 500 1,445.55 -0.39; NYSE Composite 9,326.21 +11.22

Indicators were not encouraging. Advancing issues led decliners by a narrow 5-4 margin and new lows outnumbered new highs once again, 198-59.

Light crude priced lower, closing 86 cents lower at $71.12. Gold and silver took marginal losses, remaining at somewhat attractive buying levels.

The credit woes that beset Wall Street for much of the past four weeks persist, as stocks in the financial sector were hit once again.

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Merrill Lynch (MER), Bear Stearns (BSC), Bank of America (BAC), Lehman Bros. (LEH) and Citigroup (C) all took on water, with the brokerages all down at least 1.5%. Mortgage lender Countrywide (CFC) was absolutely whacked, losing 1.62 to 19.81, a 7.56% decline.

Countrywide, the nation's largest home mortgage financier, last week said it had to tap an $11 billion line of credit, since they were unable to raise funds in the market. Alongside that message was the disclosure that Countrywide originated more than $40 billion in sub-prime loans in 2006. Lenders have become so skeptical of packaged mortgage instruments that Countrywide finds itself without much support in financial markets. As highly leveraged as it is, a continuation of the credit squeeze could foster even more declines in its stock price and possibly even more serious circumstances, including forced liquidation.

That a company as robust as Countrywide could be facing bankruptcy within months is a startling development. The company is the undisputed leader in originating home mortgages, and its collapse - which was narrowly averted last week - could have far-reaching effects, both financial and psychological.

There is no antidote for non-performing loans. The solutions for lenders are somewhere between horror and catastrophe. Despite all the interventions and happy talk from Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke, this crisis is nowhere near an end.

The Fed blinks; PPT's perfect timing

After yesterday's 300-point moon shot into the close, today's 50 basis point decrease of the discount rate propelled stocks another 200 points higher on the Dow. That's 500 points in just about an hour! Nice going.

Unfortunately, it's mostly forth, but one must understand the machinations of the manipulative class. The PPT (Plunge Protection Team) bought up shares yesterday at just the right time, didn't they? Even better, there was a load of activity on some option calls which expired today on companies such as ExxonMobil (XOM), Lehman Brothers (LEH), Citigroup (C), American International (AIG), Merrill Lynch (MER), Bear Stearns (BSC) and Countrywide (CFC). The real players in this market sold stocks this morning and cashed out options for fat one-day profits.

Goody for them. However, the rest of the poor suckers out there aren't privy to the same inside info, and will probably suffer losses later on, as the credit fiasco spreads.

The little bonus from the Fed this morning came after Japan's Nikkei lost 874 points overnight (5.42%) and European markets were still struggling. It's a temporary measure, a stop gap. Stocks will get hit further next week.

Dow 13,079.08 +233.30; NASDAQ 2,505.03 +53.96; S&P 500 1,445.94 +34.67; NYSE Composite 9,314.99 +227.89

Hypnotized investors bought up shares like the sheep they are,

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being led unwittingly to slaughter. American investors have to be the least sophisticated moneyed bunch on the planet. They have been played like so many banjos.

Advancing issues outdid decliners by a 4-1 margin, but we're not out of the woods yet. There were still 296 new lows to 123 new highs.

Oil was up another 98 cents to $71.98. Gold and silver also got a boost. Gold was higher by $8.80; silver added 31 cents.

It was such a great show.

Who caught the falling knife?

The burning question on my mind - and that of many astute investors, brokers and analysts, I'm sure - is who stepped in to the morass today and actually bought stocks when the Dow was down as much as 340 points at mid-day and off 300 points as late in the day as 3:15 pm.?

It would have to have been a magnificent leap of faith for so many investors to begin snapping up bargains at the same time. Maybe there was a case of mass psychosis on Wall and Broad that sent brokers,trancelike, to their trading machines to begin punching in buy orders.

No, readers, there can be no doubt that this spectacular rally was nothing more than the work of the mysterious Plunge Protection Team, better known as the PPT or the President's Working Group on Financial Markets, established by executive order by Ronald Reagan following the crash of 1987, and in operation - in some form or another - ever since.

The modus operandi is unmistakable. Once the PPT gears into action, stocks climb at dizzying speed and generally in non-stop fashion, just like today. It is also usually the case - as today - that the US markets will run counter to the trends set in the rest of the world's equity index. Today, markets in Europe were roiled, in their worst day in four years while the US markets staged a "miraculous recovery."

Dow 12,845.78 -15.69; NASDAQ 2,451.07 -7.76; S&P 500 1,411.27 +4.57; NYSE Composite 9,087.10 -1.94

Are US stocks so special, or our traders so astute, that they saw such tremendous buying opportunities that they would erase 300 points in losses on the Dow in a matter of 45 minutes? No. Never. The entire afternoon was a charade, designed to keep the public in the dark and avoid an all-out panic.

And they probably accomplished their mission. Americans are so gullible and, may I say, ignorant, as a group. We'll swallow any cockamamie story that is fed to us. We believe that FOX News is actually a news network, or that the Bush administration knew nothing about the 9/11 attacks until they actually took place.

The vast glut of American investors will certainly swallow this miracle rally story. Most of them are too concerned with making sure the tires on their Escalade are shiny or that their Blackberry is the newest model with the most gadgets to care much about the value of their retirement portfolio.

Seriously, what other people, as a group, would allow nameless people to manage an account which will be responsible for their financial well-being years from now? Americans will buy the phony story f today's markets.

You shouldn't. I don't. The global financial system has been brought to its knees and there is no easy way out. A stock market crash is inevitable, or, at best, with a helping hand of the PPT, a long, slow, tortuous decline. You don't have a choice in the matter. The powers that be, behind closed doors, will decide how it's going to play out.

Personally, if I'm going to lose a limb, I'd rather it be cut off with a single blow rather than a thousand small cuts and gnaws over a long period of time. The PPT obviously are fans of Chinese water torture.

Regardless of the intrigue by the PPT, the markets still took a pretty good beating and a lot of people lost more money today. Declining issues held sway over advancers by a 9-5 margin and new lows swamped new highs by a shocking 1475 to 47. To put that number in perspective, nearly one out of every four stocks listed on the NYSE and NASDAQ combined made a 52-week low TODAY!

Rally my arse! Stocks do not just turn corner and head the other way in the midst of a total collapse. Said collapse is still on track. Don't buy the hype.

To get an idea of how seriously close we are to witnessing the total collapse of world economies, check the oil futures today, which sold off as low as $70.10, settling with a loss of $2.33 to end the day at $71.00, on concerns that current and future economic conditions would foment a decline in demand for petroleum products such as gasoline, automotive fuel, petrol, call it what you will. These intrepid plungers don't scare easily, but judging by today's futures prices, they're more than just a little shaken up.

Quite possibly the strangest trading of the day - and the past few weeks, for that matter - has to be in gold. The shiny stuff fell by $21.70 to $658.00. Silver played along, dropping $1.06 to $11.50. For silver, it was a 9% decline in one day. The metals markets are supposed to be somewhat less volatile than that, besides the fact that they should be going up as stocks go down. They surely didn't today and haven't been of late.

The answer to why gold and silver sold off is simple. Everything that isn't cash is being sold to raise liquid funds, metals not excluded.

"Gold's slide into negative territory took an a new and decidedly ominous dimension on Thursday, as price support after price support gave way in the wake of mounting massive liquidations from all quarters," said Jon Nadler, an analyst at Kitco Bullion Dealers, in emailed comments.

"A wide range of commodities were being badly sideswiped in the frenzied quest to raise cash in order to mitigate stock losses by individual and institutional investors alike," Nadler said. "This was a very ugly day across the board."

We'll take his word for it.

Cash: "It's good to be king."

Money talks, so the old expression goes. And in this market, cash has let word out that it still matters. A lot of investors of all stripes have taken heed, fleeing equities for the relative safe have and warm feeling of cold greenbacks.

Those forced to be invested, such as mutual, hedge and pension funds, don't have it so easy. They are forced to hang in and suffer with the rest of the suckers. Some even buy more, throwing caution to the wind along with the rest of their money.

The Fed is in a tough spot. Many are calling on Ben Bernanke to lower interest rates in an effort to free up capital markets and give the US indices a little bit of a boost. They won't do it and shouldn't. The malaise of this market was occasioned by easy credit; cutting rates would be like giving an addict more crack.

Today's package of misery was brought to investors by more credit-related issues, as potential losses at Countrywide Financial Corp. and trouble financing deals at KKR Financial Holdings sent more shock waves through the financial community. For those already in cash, the scene is almost hilarious, watching brokers, bankers and financiers squirm and fidget over their lost dough. Many of them are deserving of the afflictions, having bought into a housing bubble that sent everything, including stocks, over the rainbow.

Dow 12,861.47 -167.45; NASDAQ 2,458.83 -40.29; S&P 500 1,406.70 -19.84; NYSE Composite 9,089.04 -165.23

The Dow traded below 13,000 for the first time since April 25 and is likely to stay there for a long time, barring some kind of dead cat bounce or jolt from the various central banks that have been funneling money into stocks for the better part of the last two weeks. The Fed snuck in another $7 billion today. It did no good and one gets the feeling that the banks are on the verge of throwing in the towel... which would be wise.

Our own scorecard for the Dow shows 8 sessions in positive territory and 12 on the minus side since the all-time peak at 14,000.41 on July 19. That's over 1100 points lost in less than a month - about 8%.

Declining issues took it to advancers by better than a 3-1 margin. New lows totaled 707. There were only 46 new highs. Every single indicator points to more losses ahead.

I've asked colleagues to find bright spots. None of them have been able to, though I've come up with two: shorts and option puts players are making a fortune, and this will end, eventually. Stocks go up and down. They went up for more than four years running. A couple of years of downward trajectory is only fitting.

Maybe there's a third positive: charts (and fundamentals) still matter. The indices broke through 200-day moving averages and the Dow, in particular, is about to cross over its 50-day MA.

Oil was up another 95 cents to $73.33. Oddly enough, gold was unchanged, while silver actually lost 19 cents to $12.56. When the lid comes off the metals, look out. They will serve notice that calamity is finally upon the fiat money, fractional-reserve banking system.