The drumbeat of bad news and frightened investors continued unabated on Monday, after the government and Citigroup discussed plans to increase the level of US government ownership in the once-giant financial firm to as much as 40%.
Oddly enough, Citi was one of just two stocks on the Dow 30 to finish the day with gains. Odd, because on Friday, the White House issued a statement expressing that "banks in private hands" was their preference, which stabilized rapidly falling stocks, especially those of Citi and Bank of America (BAC), the other Dow issue which finished the day on the upside.
27 other Dow issues finished in the red on Monday; General Motors (GM) was unchanged at 1.77. The gains on the two banking stocks were minimal. Citigroup (C) ended the day up 0.19, to 2.14, while Bank of America gained 0.12, closing at 3.91.
While two of the largest US banks grappled with insolvency issues, the real story was witnessing the S&P 500 fall below the November 20 support level at 752.44. The NYSE Composite also broke through that same November 20 support (4651.21) during the session. Since the Dow broke down last week - and continued in free fall today - that leaves only the lonely NASDAQ as the one major index still above its 2008 bottom (1316.12).
Dow 7,114.78, -250.89 (3.41%)
NASDAQ 1,387.72, -53.51 (3.71%)
S&P 500 743.33, -26.72 (3.47%)
NYSE Composite 4,633.78, -170.73 (3.55%)
The headline numbers were more than sufficiently validated by internals. Losers beat gainers by a massive number, 5471-1183, nearly a 5-1 margin. New lows dominated new highs, 940-12. Regarding the highs-lows, it should be noted that new lows have held sway - on a day-to-day basis - every day for nearly 16 months, except for 5 or 6 instances, according to our own figures.
Volume moderated a bit, as expected, since options expiration was Friday.
NYSE Volume 1,612,611,000
NASDAQ Volume 2,040,330,000
With a dearth of either economic reports of corporate filings, investors had to fly somewhat blind, but even a bat could tell that sentiment was clearly negative, as the economy works through one of the worst recessions of all time.
The NASDAQ, S&P and NYSE Comp. are already off more than 50% from their October, 2007 highs, and the Dow is within 36 points of being exactly half of its all-time closing high of October 9, 2007 (14164.53).
Commodities continued lower as well. Crude oil for April delivery was off $1.59, to $38.44. Gold slipped $7.20, to $995.00. Silver fell 4 cents, to $14.45. The metals were hit by some profit-taking, as they have been on a tear of late, though this pause may not last long before the next leg up occurs.
The shiny stuff may be about the only true safe haven available right now as stocks are simply too risky, though some traders are moving into high-grade (BBB and above) corporate bond issues and munis, on the back of the government's recently-approved stimulus bill.
As far as a bottom in stocks is concerned, there is none in sight, though some idea of the length of the recession may provide a clue. Typically, recessions last 16-24 months, but since this one is anything but typical, it almost certainly run past the long end of that span. Since the downturn began roughly in December, 2007, we may be only 14 months in, meaning that 2009 should pretty much be written off. If the recession lasts 27 months (long by any measure except that of the Great Depression), recovery could begin March 2010.
If the markets begin to move roughly six months prior to the actual economic recovery, then October of this year may be a rough mark for a bottom and a potential time frame to begin nibbling at stocks.
With prices beaten down severely in many sectors, it would not be imprudent to take some calculated risks - especially if you have a long time horizon and ample discretionary funds - sooner. stocks have been hammered so badly, many are beginning to appear downright cheap. Nobody will be blamed for jumping the gun at this level, though only with small caliber bullets.
Monday, February 23, 2009
Friday, February 20, 2009
Finding and Reviewing Business in Australia
I know there are a good number of globe-trotting and Aussie readers of this blog, so from time to time, I like to point out sites I think are useful, entertaining or informative. Then there are the days when certain sites are brought to my attention that satisfy all three criteria.
That's what I call a red-letter site, though you may just want to bookmark it. Today's site in question is known as Rave About It, and its functionality comes in a variety of forms.
One can browse or search for businesses, and one can also write reviews of businesses once signing in for an account. The search function is particularly strong, as it allows for searching for specifics in addition to by locale.
For instance, a search for party hire Sydney returns a wealth of results - everything from Funeral Caterers to Turquoise Turkish Cuisine, and, well, everything in between and beyond.
The site is extremely functional in that you can find a business, read other users' reviews and decide for yourself if it is worth your hard-earned money or whether you should keep on looking. The additional ability to review and rate (with 1-5 check marks) any business you might frequent or happen upon is a great benefit, not only for you, but for anyone who might be searching for a similar business, store, service or experience.
So, when traveling Down Under, don't forget to Rave About It.
That's what I call a red-letter site, though you may just want to bookmark it. Today's site in question is known as Rave About It, and its functionality comes in a variety of forms.
One can browse or search for businesses, and one can also write reviews of businesses once signing in for an account. The search function is particularly strong, as it allows for searching for specifics in addition to by locale.
For instance, a search for party hire Sydney returns a wealth of results - everything from Funeral Caterers to Turquoise Turkish Cuisine, and, well, everything in between and beyond.
The site is extremely functional in that you can find a business, read other users' reviews and decide for yourself if it is worth your hard-earned money or whether you should keep on looking. The additional ability to review and rate (with 1-5 check marks) any business you might frequent or happen upon is a great benefit, not only for you, but for anyone who might be searching for a similar business, store, service or experience.
So, when traveling Down Under, don't forget to Rave About It.
Stocks Hammered Again, But It Should Have Been Worse
After falling below key support on Tuesday, the Dow Jones Industrials, and US equities in general, were pounded down as fears of bank nationalization and unease over the future of the economy and even the welfare of the nation itself scared investors out of many positions.
While the technical damage on the Dow was serious, it should have been even worse, if not for subversive afternoon intervention by the usual corrupt cast of characters - the PPT, Goldman Sachs, Morgan Stanley, et. al. - which brought the Dow all the way back from a 215 point loss at 1:15 pm to a small gain at 10 minutes until 3:00.
At the heart of the matter was the fates of Bank of America and Citigroup, which suffered another day of crippling losses. At the low point of the day, Bank of America (BAC) was down 1.40, to 2.53, while Citigroup (C) fell 90 cents, to 1.51. On a basis unadjusted for splits, both were at all-time lows. Bank of America closed the day down a mere 14 cents, at 3.79, though Citigroup was not so fortunate, finishing 22% lower, down 56 cents at 1.95.
BofA CEO Ken Lewis was also subpoenaed by NY Attorney General Andrew Cuomo over the bonuses paid to Merrill Lynch executives in 2008. BofA took over Merrill under government supervision during the meltdown last fall.
It was only a hastily-prepared White House statement pledging a commitment to keeping banks in private hands that kept the markets from an all-out rout.
There's little doubt that the some kind of solution must be found for the ailing banking session, and soon. The public, however, has seen enough of bailouts and handouts, so the newly-installed Obama administration and Democratically-led congress must tread lightly.
Truth of the matter is that two of the nation's largest banks (and probably more) will have to be managed by the government, or somebody sober, for some time, in order to restore even a hint of credibility in the markets. There is also a distinct possibility that the government may not have sufficient power to prevent a complete collapse of an over-leveraged banking sector. In some ways, it is nothing more than the market hurrying the bankers' self-inflicted collapse.
Yesterday's rant by Rick Santelli at the Chicago Board of Trade (Feb. 19, 2009) on CNBC created no small sensation across the blogosphere. One of his more poignant remarks was his this gem:
Santelli was even called on the carpet by NBC's Brian Williams and Matt Lauer (NBC owns CNBC) on this morning's Today Show and put across the screen from his network nemesis, Steve Leisman, a puppy lapdog for the industrial-military-communications junta which rules the government and the nation. Santelli certainly has never backed down from a fight, and his performance on the Today Show was remarkably well-reasoned and honest with obvious middle-class populist overtones.
And now the censorship begins. While attempting to retrieve the code, I was initially met with a mention that the above-referenced video was no longer available on Youtube.com, a not-very-subtle attempt by the media elite to silence the truth and keep the public under wraps.. Don't be surprised if Santelli isn't quietly relieved of his duties soon or, more likely, continually marginalized. Nevertheless, as mentioned yesterday, the genie is well out of the bottle and the public outrage at just about anything and everything concerning government and big business will not be contained much longer.
Dow 7,365.67, -100.28 (1.34%)
NASDAQ 1,441.23, -1.59 (0.11%)
S&P 500 770.05, -8.89 (1.14%)
NYSE Compos 4,804.51, -76.65 (1.57%)
Internals were as expected, favoring declining issues over advancing ones, 4906-1775. New lows dominated new highs, expanding to new levels with 1119 new lows and a mere 25 new highs. The massive number of stocks hitting 52-week lows (1 in 6) have only been seen on days of extreme market turmoil, and today surely fit that bill. Volume was the highest in weeks, owing to options expirations, market intervention, usual trading and high levels of outright open executions on the sell side.
NYSE Volume 2,117,367,000
NASDAQ Volume 2,560,465,000
Commodities remained on their own track. Oil for March delivery closed down 54 cents, at $38.94 on the final day of that contract. Gold topped the $1000 mark, gaining $25.70, to $1,002.20. In concert, silver gained 56 cents, to $14.49. All food-related commodity futures were markedly lower.
The CPI figures released this morning demonstrated an increase of 0.4%, the first gain since July, 2008, though it is more than likely only an aberration in the continuing deflationary spiral.
Stocks should have finished much lower than they did today, which only means that they will fall further at some future date. Considering the level of angst in the market, in the public, and the ineptitude of government and corporate business to constrain the wealth destruction leads one to believe that the market is well into the third and most crucial phase of the bear market, total, utter, final capitulation.
All of the major indices finished the week with substantial losses. The Dow registered its lowest close since October 27, 1997.
For the week, the Dow was down a whopping 485 points, and closing in on a 50% decline from the October 2007 all-time high. The NASDAQ lost 93 points; the S&P surrendered 57; the NYSE Composite was down 402 points.
It's not a pretty picture and not likely to improve soon.
While the technical damage on the Dow was serious, it should have been even worse, if not for subversive afternoon intervention by the usual corrupt cast of characters - the PPT, Goldman Sachs, Morgan Stanley, et. al. - which brought the Dow all the way back from a 215 point loss at 1:15 pm to a small gain at 10 minutes until 3:00.
At the heart of the matter was the fates of Bank of America and Citigroup, which suffered another day of crippling losses. At the low point of the day, Bank of America (BAC) was down 1.40, to 2.53, while Citigroup (C) fell 90 cents, to 1.51. On a basis unadjusted for splits, both were at all-time lows. Bank of America closed the day down a mere 14 cents, at 3.79, though Citigroup was not so fortunate, finishing 22% lower, down 56 cents at 1.95.
BofA CEO Ken Lewis was also subpoenaed by NY Attorney General Andrew Cuomo over the bonuses paid to Merrill Lynch executives in 2008. BofA took over Merrill under government supervision during the meltdown last fall.
It was only a hastily-prepared White House statement pledging a commitment to keeping banks in private hands that kept the markets from an all-out rout.
There's little doubt that the some kind of solution must be found for the ailing banking session, and soon. The public, however, has seen enough of bailouts and handouts, so the newly-installed Obama administration and Democratically-led congress must tread lightly.
Truth of the matter is that two of the nation's largest banks (and probably more) will have to be managed by the government, or somebody sober, for some time, in order to restore even a hint of credibility in the markets. There is also a distinct possibility that the government may not have sufficient power to prevent a complete collapse of an over-leveraged banking sector. In some ways, it is nothing more than the market hurrying the bankers' self-inflicted collapse.
Yesterday's rant by Rick Santelli at the Chicago Board of Trade (Feb. 19, 2009) on CNBC created no small sensation across the blogosphere. One of his more poignant remarks was his this gem:
You know, they’re pretty much of the notion that you can’t buy your way into prosperity, and if the multiplier that all of these Washington economists are selling us is over… that we never have to worry about the economy again. The government should spend a trillion dollars an hour because we’ll get 1.5 trillion back.
Santelli was even called on the carpet by NBC's Brian Williams and Matt Lauer (NBC owns CNBC) on this morning's Today Show and put across the screen from his network nemesis, Steve Leisman, a puppy lapdog for the industrial-military-communications junta which rules the government and the nation. Santelli certainly has never backed down from a fight, and his performance on the Today Show was remarkably well-reasoned and honest with obvious middle-class populist overtones.
And now the censorship begins. While attempting to retrieve the code, I was initially met with a mention that the above-referenced video was no longer available on Youtube.com, a not-very-subtle attempt by the media elite to silence the truth and keep the public under wraps.. Don't be surprised if Santelli isn't quietly relieved of his duties soon or, more likely, continually marginalized. Nevertheless, as mentioned yesterday, the genie is well out of the bottle and the public outrage at just about anything and everything concerning government and big business will not be contained much longer.
Dow 7,365.67, -100.28 (1.34%)
NASDAQ 1,441.23, -1.59 (0.11%)
S&P 500 770.05, -8.89 (1.14%)
NYSE Compos 4,804.51, -76.65 (1.57%)
Internals were as expected, favoring declining issues over advancing ones, 4906-1775. New lows dominated new highs, expanding to new levels with 1119 new lows and a mere 25 new highs. The massive number of stocks hitting 52-week lows (1 in 6) have only been seen on days of extreme market turmoil, and today surely fit that bill. Volume was the highest in weeks, owing to options expirations, market intervention, usual trading and high levels of outright open executions on the sell side.
NYSE Volume 2,117,367,000
NASDAQ Volume 2,560,465,000
Commodities remained on their own track. Oil for March delivery closed down 54 cents, at $38.94 on the final day of that contract. Gold topped the $1000 mark, gaining $25.70, to $1,002.20. In concert, silver gained 56 cents, to $14.49. All food-related commodity futures were markedly lower.
The CPI figures released this morning demonstrated an increase of 0.4%, the first gain since July, 2008, though it is more than likely only an aberration in the continuing deflationary spiral.
Stocks should have finished much lower than they did today, which only means that they will fall further at some future date. Considering the level of angst in the market, in the public, and the ineptitude of government and corporate business to constrain the wealth destruction leads one to believe that the market is well into the third and most crucial phase of the bear market, total, utter, final capitulation.
All of the major indices finished the week with substantial losses. The Dow registered its lowest close since October 27, 1997.
For the week, the Dow was down a whopping 485 points, and closing in on a 50% decline from the October 2007 all-time high. The NASDAQ lost 93 points; the S&P surrendered 57; the NYSE Composite was down 402 points.
It's not a pretty picture and not likely to improve soon.
Thursday, February 19, 2009
Panic Selling Crashes Stocks Through False Bottom
Yesterday's manipulated close above the false bottom at Dow 7552 could not hold, not even for a day, in the wake of unprecedented government handouts and institutional selling that nearly brought the major stock indices to their knees in the final hours of Thursday's session. The Dow Jones Industrials finished the day at their lowest level since October 9, 2002, prior, even to the start of the Iraq War.
The best the government interlopers (through their proxies at Goldman Sachs, Morgan Stanley, et. al.) could muster today was putting a good face on an unmitigated disaster. The game is over for Wall Street. A massive systemic collapse of global finance is palpable and seemingly inevitable.
With an opening pop, investors bought the Dow up about 60 points, but the market could not sustain the gains. By 10:30 the index was back into the red. After a brief, heartless rally, stocks cascaded lower with the Dow eventually falling below 7450. From 11:30 to the close, the the major indices were all under water. Selling was relentless, with the occasional covering of options positions, which close tomorrow. A line could be drawn diagonally across the tops. The slope of the bottoms was more severe.
Dow 7,465.95, -89.68 (1.19%)
NASDAQ 1,442.82, -25.15 (1.71%)
S&P 500 778.94, -9.48 (1.20%)
NYSE Compos 4,881.16, -43.38 (0.88%)
It was not the size of the losses that mattered much in this session, but the overall tenor and tone of trading. The level of desperation as a standard emotion continues to deepen, even daily. People are angry. The press, economists, and the public are all up in arms over the rapid-fire moves of the federal government. Most of the abuse is being heaped upon newly-elected President Obama, though much of the focus is rightfully on the US congress.
Unsurprisingly, the Dow components were a shambles, 20 down and 10 up, with most of the largest losses sustained by financials and tech, though the damage was truly broad-based. Paradoxically, the largest percentage gainer on the Dow was Home Depot, which gained 1.82%, up 0.36 to 20.16.
If you're seeking a good proxy for the Dow, look no further than JP Morgan Chase (JPM), which turned negative today just as the Dow was rolling over. The pride of Wall Street banking, JPM is probably overvalued by a factor of 5-10, since it is in largely the same boat as brethren Bank of America and Citigroup, all of whom are in the government's notorious gang of Systemically Significantly Failing Institutions under the Capital Purchase Program.
JP Morgan Chase dipped 0.91 to 20.60, a mere 4.23% loss, but it is joined at the hip to Bank of America (-0.64, 3.93, -14%) and Citigroup (-40, 2.51, -13.75).
The January Producer Price Index (PPI) registered its first gain in six months, edging up 0.8% over December. This shouldn't have come as much of a surprise, since retailers discounted heavily in December during one of the worst holiday shopping seasons in memory.
Inflation alarmists should also take a cold shower on this news, as much of the increase was due to slightly higher energy prices, and, of course, the figures are seasonally adjusted. Deflation continues to rule.
But the real story of the day was the final breakdown through the November 20 bottom on the Dow. The process will no doubt continue as the other indices approach and retest their lows. The markets are again in uncharted territory.
Friday's action most certainly will be among the most volatile of recent vintage. Thursday was only a prelude to the real wealth-cleansing that will occur over the coming days, weeks and months.
Internals did little to mask the carnage. Decliners swept by advancers, 4384-2129. New lows outnumbered new highs, 617-11. Volume was strong enough to suggest more selling as more participants become engaged in a race to the bottom.
NYSE Volume 1,485,501,000
NASDAQ Volume 2,036,313,000
Commodities exhibited perhaps the most random and directionless trade in decades. Oil priced $4.86 higher, to $39.48. Gold fell $1.70, to $976.50, while silver lost 36 cents, to $13.94. The metals cooled off what was, until today, a torrid rally. Beef and corn were up, pork and soybeans were down. Natural gas fell to a new seasonal low as at $4.11, as milder weather and conservation measures are keeping demand tamped down.
The level of unrest, not only on Wall Street but on Main Street and across the nation and around the world, cannot be underestimated. Cheats and scoundrels in government and business have opened the gates of hell with their wrong-headed policies over many years. Another of America's dates with destiny is fast approaching.
Brace yourself.
The best the government interlopers (through their proxies at Goldman Sachs, Morgan Stanley, et. al.) could muster today was putting a good face on an unmitigated disaster. The game is over for Wall Street. A massive systemic collapse of global finance is palpable and seemingly inevitable.
With an opening pop, investors bought the Dow up about 60 points, but the market could not sustain the gains. By 10:30 the index was back into the red. After a brief, heartless rally, stocks cascaded lower with the Dow eventually falling below 7450. From 11:30 to the close, the the major indices were all under water. Selling was relentless, with the occasional covering of options positions, which close tomorrow. A line could be drawn diagonally across the tops. The slope of the bottoms was more severe.
Dow 7,465.95, -89.68 (1.19%)
NASDAQ 1,442.82, -25.15 (1.71%)
S&P 500 778.94, -9.48 (1.20%)
NYSE Compos 4,881.16, -43.38 (0.88%)
It was not the size of the losses that mattered much in this session, but the overall tenor and tone of trading. The level of desperation as a standard emotion continues to deepen, even daily. People are angry. The press, economists, and the public are all up in arms over the rapid-fire moves of the federal government. Most of the abuse is being heaped upon newly-elected President Obama, though much of the focus is rightfully on the US congress.
Unsurprisingly, the Dow components were a shambles, 20 down and 10 up, with most of the largest losses sustained by financials and tech, though the damage was truly broad-based. Paradoxically, the largest percentage gainer on the Dow was Home Depot, which gained 1.82%, up 0.36 to 20.16.
If you're seeking a good proxy for the Dow, look no further than JP Morgan Chase (JPM), which turned negative today just as the Dow was rolling over. The pride of Wall Street banking, JPM is probably overvalued by a factor of 5-10, since it is in largely the same boat as brethren Bank of America and Citigroup, all of whom are in the government's notorious gang of Systemically Significantly Failing Institutions under the Capital Purchase Program.
JP Morgan Chase dipped 0.91 to 20.60, a mere 4.23% loss, but it is joined at the hip to Bank of America (-0.64, 3.93, -14%) and Citigroup (-40, 2.51, -13.75).
The January Producer Price Index (PPI) registered its first gain in six months, edging up 0.8% over December. This shouldn't have come as much of a surprise, since retailers discounted heavily in December during one of the worst holiday shopping seasons in memory.
Inflation alarmists should also take a cold shower on this news, as much of the increase was due to slightly higher energy prices, and, of course, the figures are seasonally adjusted. Deflation continues to rule.
But the real story of the day was the final breakdown through the November 20 bottom on the Dow. The process will no doubt continue as the other indices approach and retest their lows. The markets are again in uncharted territory.
Friday's action most certainly will be among the most volatile of recent vintage. Thursday was only a prelude to the real wealth-cleansing that will occur over the coming days, weeks and months.
Internals did little to mask the carnage. Decliners swept by advancers, 4384-2129. New lows outnumbered new highs, 617-11. Volume was strong enough to suggest more selling as more participants become engaged in a race to the bottom.
NYSE Volume 1,485,501,000
NASDAQ Volume 2,036,313,000
Commodities exhibited perhaps the most random and directionless trade in decades. Oil priced $4.86 higher, to $39.48. Gold fell $1.70, to $976.50, while silver lost 36 cents, to $13.94. The metals cooled off what was, until today, a torrid rally. Beef and corn were up, pork and soybeans were down. Natural gas fell to a new seasonal low as at $4.11, as milder weather and conservation measures are keeping demand tamped down.
The level of unrest, not only on Wall Street but on Main Street and across the nation and around the world, cannot be underestimated. Cheats and scoundrels in government and business have opened the gates of hell with their wrong-headed policies over many years. Another of America's dates with destiny is fast approaching.
Brace yourself.
Will Congress Ever Represent the Public Interest?
Now that President Obama and the Dem-controlled congress has spent somewhere in the neighborhood of $1.5 Trillion over the past few weeks, one wonders from where - especially in the stimulus bill - the new jobs are going to come.
There is plenty of money being thrown at Wall Street banking interests, state governments, food stamps, unemployment insurance, mortgage defaults and public works projects, but nowhere is found a single tax credit or incentive for small businesses to actually hire anyone.
It seems that since small business creates more than 90% of private sector jobs, congress would have included something along those lines, maybe even (my idea here) swapping unemployment benefits for actual work. My concept would put to work people collecting unemployment, by requiring them to find a job in a relevant industry. The business would only have to pay a small amount for, say, six months, like 1/4 to 1/3 of the amount the recipient is receiving in benefits, while the worker is integrated into the business.
Not only would the worker have a job guaranteed after his benefits run out, the government would pick up much of the tab during the initial period. Of course, the business would have to keep all current employees on the job (to avoid cheating the system) during this period and guarantee employment to the worker for at least another 6 months to a year.
Well, that's just one idea, but another would be for congress to actually get up to speed with the rest of us by running some public surveys available in 360 degree software or other such programs.
Imagine congress sending an email to constituents, or putting a public interest poll on their taxpayer-funded web sites with real choices for real legislative options.
Maybe it's just too much to ask of our special interest congress. But, it is nice to think about.
There is plenty of money being thrown at Wall Street banking interests, state governments, food stamps, unemployment insurance, mortgage defaults and public works projects, but nowhere is found a single tax credit or incentive for small businesses to actually hire anyone.
It seems that since small business creates more than 90% of private sector jobs, congress would have included something along those lines, maybe even (my idea here) swapping unemployment benefits for actual work. My concept would put to work people collecting unemployment, by requiring them to find a job in a relevant industry. The business would only have to pay a small amount for, say, six months, like 1/4 to 1/3 of the amount the recipient is receiving in benefits, while the worker is integrated into the business.
Not only would the worker have a job guaranteed after his benefits run out, the government would pick up much of the tab during the initial period. Of course, the business would have to keep all current employees on the job (to avoid cheating the system) during this period and guarantee employment to the worker for at least another 6 months to a year.
Well, that's just one idea, but another would be for congress to actually get up to speed with the rest of us by running some public surveys available in 360 degree software or other such programs.
Imagine congress sending an email to constituents, or putting a public interest poll on their taxpayer-funded web sites with real choices for real legislative options.
Maybe it's just too much to ask of our special interest congress. But, it is nice to think about.
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