The crack dealers working the area of lower Manhattan must be flush with cash because it appears certain that the brokers, dealers, wheeler-dealers, scam artists, cheats liars, high muckety-muck, junkies, flunkies, lunkheads, losers and lowlives of all stripes are consuming copious amounts of the stuff.
After a multi-week stock market run of between 20 and 25%, depending on your index of choice, a week chock-full of eyebrow-raising economic reports, a failed attempt at worldwide order and financial diplomacy at the G20, and the worst unemployment in 25 years, the masters of the financial universe decided to keep pushing prices higher, despite the aforementioned data and news, and the imminent revelations from corporate quarterly reports beginning next week.
No matter how anyone tries to justify the numbers, a loss of more than 2 million jobs just in the first quarter of this year is not good news. Stocks should have been headed lower, not higher. Watching the indices crawl forward, it seems that the charts must be from some foreign planet, not ours, which is mired amid the throes of a deepening - not improving - financial breakdown.
Apparently, the wizards of Wall Street see things differently. A slowing economy is a fine one to made ludicrous bets into according to their actions. Stimulus, bailouts, Ponzi schemes, a deteriorating housing market and job losses creates the perfect investing climate according to these geniuses. They are smoking some very powerful dope down there.
Stocks traded in tight ranges throughout the session. Today's action could have been due to indecision, consolidation or manipulation, but it was probably a little bit of each. In any case, nothing moved enough to raise anyone's blood pressure much. It was an all-around tough day for day-traders and short timers.
Dow 8,017.59, +39.51 (0.50%)
NASDAQ 1,621.87, +19.24 (1.20%)
S&P 500 842.50 8.12 (0.97%)
NYSE Composite 5,318.75, +51.65 (0.98%)
Stocks finished with their 4th straight week to the upside. That's a pretty nifty record in the middle of economic calamity and hardly believable. Wall Street insiders realize that another precipitous decline in stock values could lead to some very ugly consequences including widespread firings of top banking professionals, prosecutions and jailings of same, social unrest, and a near-complete breakdown of the social contract and economic death. Thus, the rally must continue, or, at least appear to be solid. It's just another sham being played by the monied interests of Wall Street and Washington and being dribbled along by the feigning financial press.
On the day, advancers beat decliners, 4091-2378, though new lows continued their advantage over new highs, 77-16. Volume was moderate.
NYSE Volume 1,484,215,000
NASDAQ Volume 2,140,955,000
To amplify Wall Street's insanity, read on. This hardly warranted mention on the airwaves, unbelievably.
Self-dealing made simple: The same banks which packaged the "toxic" mortgage loans - for which they received government bailout money - are now looking into buying the same assets under Treasury's Private-Public Partnership Investment Plan.
Yes, you read that right. Citigroup, Morgan Stanley, JP Morgan Chase and Goldman Sachs want to be buyers of each other's near-worthless paper, taking advantage of the government's largesse in the form of 14-1 leverage. These same banks would like to buy up each other's bad loans with roughly 15% down, the balance financed by the government, or, read correctly, the badly duped and without recourse US taxpayer.
Not only is this the worst self-dealing ever witnessed on the planet, but it also reeks of the kind of scheme Bernie Madoff recently re-popularized: PONZI. All of this will likely be swept neatly under the rug with help of the duplicitous Treasury Secretary, Fed Chairman Ben Bernanke and the Liar-King, President Barack Obama.
I know I predicted this would happen when I first heard of the proposal, so why should I - or anyone - be shocked? Our government has one purpose now, simply to serve the wishes of their puppet-masters on Wall Street. The whole bunch of them - from the President and congress to the bank CEOs - should be tried on charges of grand larceny and treason, because stealing from the very people you swore to protect and defend is nothing less.
Commodities dithered throughout the day. Oil closed 13 cents lower, at $52.51. Gold fell another $11.60, to $897.30. Silver shed 29 cents to finish the week at $12.74.
And here's a dose of honesty:
Have a nice weekend.
Friday, April 3, 2009
Thursday, April 2, 2009
Was Today the End of the Bull Run?
Markets boomed worldwide on Thursday as the Group of 20 met, promised to pass along $1 Trillion to the IMF and the World Bank, promised to improve regulations on banks and other financial solutions and left jolly London amid smiles, niceties and bright lights.
Naturally, nothing will really change. Twenty leaders, from the world's largest and best-developed economies, meeting over tea, crumpets, dinner and wide tables can accomplish less than nothing, and this group surely succeeded in one regard: they put on a very nice show. The reality of the situation is that the United States, Europe and the BRIC nations (Brazil, Russia, India, China) are as far apart - and the animosity just as great - as before they staged their little confidence-fest.
Back in America, where real people set about to do real work, another 669,000 people filed for unemployment in the past week. The number of people continuing to receive weekly or bi-weekly unemployment checks set another record at 5.8 million. Once again, Wall Street completely ignored the dire employment numbers and all of the evil implications behind a growing number of idle hands in America, and shot straight up at the open, reaching heights not seen since early February.
The Dow surged past 8000, the NASDAQ pushed above 1600 and the S&P 500 touched, for an instant, the bottom of the clouds of heaven, hitting 845 just before 1:00, coincidentally about the same time the G20 meeting was concluding in London. Therein laid the crucial test - at 845 on the S&P - a key inflection point at which the index has closed on four separate occasions recently: on December 4, January 27, January 29 and February 5. Since then, the S&P fell to 676 (March 9) and hit it again today. It took 21 sessions to bottom out and another 18 to get back to 845, so, if you are of the camp looking for the perfect V bottom, this fits it to a tee.
Two problems arise immediately, however, and a slew of them continue in the background. First, the index did not close at the magic number; indeed, it ended the day 11 points below it. Second, the late day selling seemed to signal the end of a mammoth three-day effort just to reach for the stars. And, of course, with the G20 meeting now behind us, and the government's non-farms payroll data due out tomorrow morning, one has to wonder just how long Wall Street can continue to ignore the massive numbers losing jobs every day, week and month. Besides that, we are poised just days away from important first quarter corporate reports, of which every indication points to it being a very dull quarter for a wide swath of companies.
All this week, investors shrugged off economic data, most of which consisted of basic bottom scraping, calling it "improvement" as many of the numbers being tossed about beat expert expectations, though marginally. A more realistic reading might conclude that these numbers suggest that we may have hit a bottom and that it could be only a temporary one.
More pessimistic minds would contend that the figures released this week amounted to nothing more than statistical rounding and do not indicate any kind of trend, and that the economy is ready to dive once again. In any case, stocks have climbed the proverbial "wall of worry" all the way to the top, to a point a which any more gains will begin to confirm that a new bull market has begun, and that the bears are dead meat. Sadly, for the optimists, bears do not go into hibernation with the advent of Spring. In fact, they are now hungry for more red meat.
One other factor to consider. The overall volume of today's run was quite literally off the charts, the highest volume seen since investors were selling as fast as they could. Today stocks were changing hands at a lightning pace, indicative of a blow-off top. We will find out whether or not it was the end of the bull run in less than 18 hours, when the markets are open for the final time this week.
Dow 7,978.08, +216.48 (2.79%)
NASDAQ 1,602.63, +51.03 (3.29%)
S&P 500 834.38, +23.30 (2.87%)
NYSE Composite 5,267.10, +181.34 (3.57%)
Advancers beat down decliners handily, 5479-1140, but despite the huge gains of the past three sessions, new lows did not give up their advantage over new highs, beating them once more, 89-42. While the gap has narrowed significantly, and the number of new highs continued to grow, this indicator has yet to roll over. If and when it does, and if it is able to maintain a bias to the opposite, then we may begin looking at the end of the bear market, not now, and not any sooner.
NYSE Volume 1,874,517,000
NASDAQ Volume 2,820,056,000
Taking a peek inside the Dow at some of the components, we note that 28 were gainers and just two, losers: Microsoft (MSFT) and Pfizer (PFE). leadership came from basic materials and industrials, with Alcoa (AA), Caterpillar (CAT), DuPont (DD), General Motors (GM) and United Technologies (UTX) sporting the best percentage gains. Banks were subdued, with JP Morgan Chase up a mere 0.07 on the day. One outlier was Disney (DIS), which gained upwards of 7%.
As far as concerns the banks, they were handed another get-out-of-jail-free card today as the FASB eased mark-to-market accounting rules, allowing the institutions with the most toxic assets to reprice those entities in more favorable terms. In other words, it's a return to fairyland accounting for tier 3 assets. Tra-la-la.
Oil ramped up $4.25, to $52.64. Gold hit the skids, losing $18.80, to $908.90. Silver gained 5 cents to $13.03.
Stocks will almost surely record their 4th straight week of gains when the indices close tomorrow. How much of a gain depends on a number of factors, not the least of which being how eager investors are about locking in profits over the weekend and how seriously those same investors view the employment picture.
Naturally, nothing will really change. Twenty leaders, from the world's largest and best-developed economies, meeting over tea, crumpets, dinner and wide tables can accomplish less than nothing, and this group surely succeeded in one regard: they put on a very nice show. The reality of the situation is that the United States, Europe and the BRIC nations (Brazil, Russia, India, China) are as far apart - and the animosity just as great - as before they staged their little confidence-fest.
Back in America, where real people set about to do real work, another 669,000 people filed for unemployment in the past week. The number of people continuing to receive weekly or bi-weekly unemployment checks set another record at 5.8 million. Once again, Wall Street completely ignored the dire employment numbers and all of the evil implications behind a growing number of idle hands in America, and shot straight up at the open, reaching heights not seen since early February.
The Dow surged past 8000, the NASDAQ pushed above 1600 and the S&P 500 touched, for an instant, the bottom of the clouds of heaven, hitting 845 just before 1:00, coincidentally about the same time the G20 meeting was concluding in London. Therein laid the crucial test - at 845 on the S&P - a key inflection point at which the index has closed on four separate occasions recently: on December 4, January 27, January 29 and February 5. Since then, the S&P fell to 676 (March 9) and hit it again today. It took 21 sessions to bottom out and another 18 to get back to 845, so, if you are of the camp looking for the perfect V bottom, this fits it to a tee.
Two problems arise immediately, however, and a slew of them continue in the background. First, the index did not close at the magic number; indeed, it ended the day 11 points below it. Second, the late day selling seemed to signal the end of a mammoth three-day effort just to reach for the stars. And, of course, with the G20 meeting now behind us, and the government's non-farms payroll data due out tomorrow morning, one has to wonder just how long Wall Street can continue to ignore the massive numbers losing jobs every day, week and month. Besides that, we are poised just days away from important first quarter corporate reports, of which every indication points to it being a very dull quarter for a wide swath of companies.
All this week, investors shrugged off economic data, most of which consisted of basic bottom scraping, calling it "improvement" as many of the numbers being tossed about beat expert expectations, though marginally. A more realistic reading might conclude that these numbers suggest that we may have hit a bottom and that it could be only a temporary one.
More pessimistic minds would contend that the figures released this week amounted to nothing more than statistical rounding and do not indicate any kind of trend, and that the economy is ready to dive once again. In any case, stocks have climbed the proverbial "wall of worry" all the way to the top, to a point a which any more gains will begin to confirm that a new bull market has begun, and that the bears are dead meat. Sadly, for the optimists, bears do not go into hibernation with the advent of Spring. In fact, they are now hungry for more red meat.
One other factor to consider. The overall volume of today's run was quite literally off the charts, the highest volume seen since investors were selling as fast as they could. Today stocks were changing hands at a lightning pace, indicative of a blow-off top. We will find out whether or not it was the end of the bull run in less than 18 hours, when the markets are open for the final time this week.
Dow 7,978.08, +216.48 (2.79%)
NASDAQ 1,602.63, +51.03 (3.29%)
S&P 500 834.38, +23.30 (2.87%)
NYSE Composite 5,267.10, +181.34 (3.57%)
Advancers beat down decliners handily, 5479-1140, but despite the huge gains of the past three sessions, new lows did not give up their advantage over new highs, beating them once more, 89-42. While the gap has narrowed significantly, and the number of new highs continued to grow, this indicator has yet to roll over. If and when it does, and if it is able to maintain a bias to the opposite, then we may begin looking at the end of the bear market, not now, and not any sooner.
NYSE Volume 1,874,517,000
NASDAQ Volume 2,820,056,000
Taking a peek inside the Dow at some of the components, we note that 28 were gainers and just two, losers: Microsoft (MSFT) and Pfizer (PFE). leadership came from basic materials and industrials, with Alcoa (AA), Caterpillar (CAT), DuPont (DD), General Motors (GM) and United Technologies (UTX) sporting the best percentage gains. Banks were subdued, with JP Morgan Chase up a mere 0.07 on the day. One outlier was Disney (DIS), which gained upwards of 7%.
As far as concerns the banks, they were handed another get-out-of-jail-free card today as the FASB eased mark-to-market accounting rules, allowing the institutions with the most toxic assets to reprice those entities in more favorable terms. In other words, it's a return to fairyland accounting for tier 3 assets. Tra-la-la.
Oil ramped up $4.25, to $52.64. Gold hit the skids, losing $18.80, to $908.90. Silver gained 5 cents to $13.03.
Stocks will almost surely record their 4th straight week of gains when the indices close tomorrow. How much of a gain depends on a number of factors, not the least of which being how eager investors are about locking in profits over the weekend and how seriously those same investors view the employment picture.
Wednesday, April 1, 2009
The Real April's Fools
Investors. Those people who study charts, read reports, follow the economy, buy and sell stocks are the truest of fools because - in America at least - they are playing poker with a bunch of cheats who can reshuffle the deck, hide cards and pull inside straights whenever they please. It also helps when they - the dealers, the cheats, the cons on Wall Street - have government officials all the way up to the Treasury Secretary, Chairman of the Federal Reserve, various high-powered members of congress and probably even the President himself, in their collective back pockets.
Today's trade was an object lesson of why it isn't wise to play cards with people who carry stacked decks.
At 8:15 this morning, the ADP Employment Survey, the most reliable set of numbers regarding private sector employment in the country, ticked off the details of our sad and seriously declining economic condition with the release of their March report, which showed that the private sector had shed another 742,000 jobs during the month. Predictably, at 9:30 am, the stock markets opened with broad losses, but the remorse for nearly a quarter of a million more Americans going jobless in one month's time lasted merely a half hour.
At 10:00, three more economic reports became public. Construction spending slipped 0.9% in February, the Institute of Supply Manager's (ISM) index of manufacturing activity rose to 36.3 in March, from 35.8 in February; and, Pending Home Sales for February grew by 2.1% in February after hitting rock bottom with a decline of 7.7% in January.
Apparently, these minor blips of improvement were enough to reverse a 125-point loss on the Dow (with all other indices trading lower in similar fashion) into a 152-point gain for the day. Those people out of work be damned. All the other indicators showed improvement.
As the day progressed, the news improved (satire). Ford posted a 41% decline in sales over year-ago figures. General Motors were only down 45%. Chrysler's March sales were down only39%. All of the figures proved to be better than "expert's expectations." So, the auto makers are still scraping the bottom, but it wasn't as bad as expected, so let's go buy some worthless stocks from the hucksters on Wall Street. Fools. Morons. Imbeciles. Investors. All share the same definition of mindless sheep being led to slaughter.
All of this is like saying that your basketball team, which lost by 45 points the week earlier, only lost by 41 today. Hip-hip, Horray! Let's break out the cake and party hats! Bring on the champagne!
Considering today's and yesterday's economic reports and news items, how is it that the dow Jones Industrilas overcome the massive 254-point drop Monday and gain back 240 points? It really is April Fool's Day, and the joke is on all of us suckers who continue to play this market as though it's a fair game. It's not. It's rigged by the nation's largest banks and brokerages, all of which are effectively insolvent.
Take a gander at this insightful article by Justice Litle, entitled Turbo Tommy's Sneaky Scam (Part 1 & 2), which details how Treasury Secretary Tim Geithner's Public Private Partnership Investment Plan (to remove toxic assets from bank balance sheets) can only work if it's rigged. This is not mainstream reading, but Litle seems to have it nailed down pretty well. I'd surely trust his judgement more than the thieves and criminals running our country and controlling the media.
While Wall Street was rollicking, Obama the Great was across the pond, trying to quiet down the full blown revolution of our trading partners at the meeting of the G20. Forget what the mainstream media tries to tell you, that Obama is being counted on to come up with concensus, that he alone can organize the world's leaders to follow our lead of debasing our currency, expanding our deficits to ungodly levels and doling out dollars to anybody with a hand out.
For a better insight into what's really happening in London, check out "China: Partner, Adversary, Rebel" by Jim Willie CB. It's an incredible insight which I am overjoyed to be able to share.
Dow 7,761.60, +152.68 (2.01%)
NASDAQ 1,551.60, +23.01 (1.51%)
S&P 500 811.08, +13.21 (1.66%)
NYSE Composite 5,085.76, +106.78 (2.14%)
On the day, advancers led decliners, 4585-1883. New lows continued to outpace new highs, 85-19. Volume, due to the high number of phantom trades being place by Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley, was elevated.
NYSE Volume 1,502,768,000
NASDAQ Volume 2,287,061,000
Commodities were mixed, but mostly lower. Oil lost $1.51, to 48.39. Gold gained $2.70, to $927.70, while silver lost a penny to $12.98.
Normally, I'd be happy about a stock market gain, especially in this environment, but, when the truth of just how corrupt the system has become smacks you on the forehead, you sit up, take notice and get angry. And I've been angry for a long time. I'm just about over the edge now.
Today's trade was an object lesson of why it isn't wise to play cards with people who carry stacked decks.
At 8:15 this morning, the ADP Employment Survey, the most reliable set of numbers regarding private sector employment in the country, ticked off the details of our sad and seriously declining economic condition with the release of their March report, which showed that the private sector had shed another 742,000 jobs during the month. Predictably, at 9:30 am, the stock markets opened with broad losses, but the remorse for nearly a quarter of a million more Americans going jobless in one month's time lasted merely a half hour.
At 10:00, three more economic reports became public. Construction spending slipped 0.9% in February, the Institute of Supply Manager's (ISM) index of manufacturing activity rose to 36.3 in March, from 35.8 in February; and, Pending Home Sales for February grew by 2.1% in February after hitting rock bottom with a decline of 7.7% in January.
Apparently, these minor blips of improvement were enough to reverse a 125-point loss on the Dow (with all other indices trading lower in similar fashion) into a 152-point gain for the day. Those people out of work be damned. All the other indicators showed improvement.
As the day progressed, the news improved (satire). Ford posted a 41% decline in sales over year-ago figures. General Motors were only down 45%. Chrysler's March sales were down only39%. All of the figures proved to be better than "expert's expectations." So, the auto makers are still scraping the bottom, but it wasn't as bad as expected, so let's go buy some worthless stocks from the hucksters on Wall Street. Fools. Morons. Imbeciles. Investors. All share the same definition of mindless sheep being led to slaughter.
All of this is like saying that your basketball team, which lost by 45 points the week earlier, only lost by 41 today. Hip-hip, Horray! Let's break out the cake and party hats! Bring on the champagne!
Considering today's and yesterday's economic reports and news items, how is it that the dow Jones Industrilas overcome the massive 254-point drop Monday and gain back 240 points? It really is April Fool's Day, and the joke is on all of us suckers who continue to play this market as though it's a fair game. It's not. It's rigged by the nation's largest banks and brokerages, all of which are effectively insolvent.
Take a gander at this insightful article by Justice Litle, entitled Turbo Tommy's Sneaky Scam (Part 1 & 2), which details how Treasury Secretary Tim Geithner's Public Private Partnership Investment Plan (to remove toxic assets from bank balance sheets) can only work if it's rigged. This is not mainstream reading, but Litle seems to have it nailed down pretty well. I'd surely trust his judgement more than the thieves and criminals running our country and controlling the media.
While Wall Street was rollicking, Obama the Great was across the pond, trying to quiet down the full blown revolution of our trading partners at the meeting of the G20. Forget what the mainstream media tries to tell you, that Obama is being counted on to come up with concensus, that he alone can organize the world's leaders to follow our lead of debasing our currency, expanding our deficits to ungodly levels and doling out dollars to anybody with a hand out.
For a better insight into what's really happening in London, check out "China: Partner, Adversary, Rebel" by Jim Willie CB. It's an incredible insight which I am overjoyed to be able to share.
Dow 7,761.60, +152.68 (2.01%)
NASDAQ 1,551.60, +23.01 (1.51%)
S&P 500 811.08, +13.21 (1.66%)
NYSE Composite 5,085.76, +106.78 (2.14%)
On the day, advancers led decliners, 4585-1883. New lows continued to outpace new highs, 85-19. Volume, due to the high number of phantom trades being place by Goldman Sachs, JP Morgan Chase, Merrill Lynch and Morgan Stanley, was elevated.
NYSE Volume 1,502,768,000
NASDAQ Volume 2,287,061,000
Commodities were mixed, but mostly lower. Oil lost $1.51, to 48.39. Gold gained $2.70, to $927.70, while silver lost a penny to $12.98.
Normally, I'd be happy about a stock market gain, especially in this environment, but, when the truth of just how corrupt the system has become smacks you on the forehead, you sit up, take notice and get angry. And I've been angry for a long time. I'm just about over the edge now.
Tuesday, March 31, 2009
April Fool's a Day Early?
Essentially, anyone who bought stocks after 10:30 this morning and held them into the close ended up with a loss. The Dow shot up up over 100 points to the positive at that point, tacked on 100 more by quarter to three, and then fell apart in the final 30 minutes, finishing with a gain, but less of one than had the markets closed 5 1/2 hours earlier.
For those foolish enough to believe portfolio managers were loading up throughout the day, their fate will be told in days ahead. The wisest of the wise bought stocks in the first half hour of trading, before the fools rushed in a day early. Everything that occurred during the session after 10:00 am was fluff and puffery, running in opposition to the economic reports of the day and the news, which was uniformly bad.
The S&P/Case Shiller Home Price Index [PDF] reported the worst month in the history of the series with a record 19% decline year-over-year for the February 2009 20 City Composite. Those numbers came out at 9:00 am, though the market chose to ignore them, opening the trading session with broad gains.
At 9:45 am, the Chicago Purchasing Manager's Index noted a decline for the month of March from 34.2 to 31.4 , its lowest level since 1980.
Finally, at 10:00 am, The Conference Board's consumer confidence reading edged slightly higher, to 26.0 in March, from 25.3 in February. The original February reading of 25 was an all-time low, though the revised reading still registered as the worst ever.
Meanwhile, GM and Ford announced plans to cover car payments for people who buy a new vehicle but lose their jobs, and Fritz Henderson, the new GM CEO, in his first full day on the job, said that more plant closings would be necessary and that bankruptcy would be "more probable" to a government workout. Stocks, in deference to reality, continued to soar through midday.
The Chicago Sun-Times filed for bankruptcy and President Obama flew off to London for a meeting of the G20, which, by most accounts, will accomplish nothing, as the parties are far apart on major issues such as taxation, regulation and stimulus. The conference begins tomorrow, though the demonstrations began in earnest today.
All of this led to a very fractured market at the close of one of the most volatile quarters in market history. Though March will be remembered as one of the best in market history, all major indices are down for the year by anywhere from 7-12%. and even though stocks finished the session with gains, there was a widespread feeling that the bears had actually carried the day.
Dow 7,608.92, +86.90 (1.16%)
NASDAQ 1,528.59, +26.79 (1.78%)
S&P 500 797.87, +10.34 (1.31%)
NYSE Composite 4,978.98, +79.93 (1.63%)
Nevertheless, advancing issues finished well ahead of decliners, 4720-1798, and new lows outnumbered new highs, 75-18, a string of daily wins for new lows which stretches all the way back to October, 2007, with the exception of 5 to 8 sessions with more new highs than lows. This has been the most accurate metric for measuring the market, since the bear market began in August of 2007, now stretching to 18 months, making this one of the longest bears in market history. Volume was off just a touch and seemed especially sluggish though the middle of the session, though very strong in the final 30 minutes.
NYSE Volume 1,638,661,000
NASDAQ Volume 2,145,532,000
Commodities were volatile as well though almost all ended with gains. Crude oil for May delivery ended the day higher by $1.49, at $49.90. Gold gained $7.30, to $925.00, while silver, the only loser of the major commodities, was down a nickel, to $12.99.
Market participants will be greeted early, at 8:15 am, by the ADP Employment survey for March, a precursor to Friday's government non-farm payroll report.
April Fool's Day starts a new quarter and a new month. March was the first month in six in which the Dow Jones Industrials registered a gain.
For those foolish enough to believe portfolio managers were loading up throughout the day, their fate will be told in days ahead. The wisest of the wise bought stocks in the first half hour of trading, before the fools rushed in a day early. Everything that occurred during the session after 10:00 am was fluff and puffery, running in opposition to the economic reports of the day and the news, which was uniformly bad.
The S&P/Case Shiller Home Price Index [PDF] reported the worst month in the history of the series with a record 19% decline year-over-year for the February 2009 20 City Composite. Those numbers came out at 9:00 am, though the market chose to ignore them, opening the trading session with broad gains.
At 9:45 am, the Chicago Purchasing Manager's Index noted a decline for the month of March from 34.2 to 31.4 , its lowest level since 1980.
Finally, at 10:00 am, The Conference Board's consumer confidence reading edged slightly higher, to 26.0 in March, from 25.3 in February. The original February reading of 25 was an all-time low, though the revised reading still registered as the worst ever.
Meanwhile, GM and Ford announced plans to cover car payments for people who buy a new vehicle but lose their jobs, and Fritz Henderson, the new GM CEO, in his first full day on the job, said that more plant closings would be necessary and that bankruptcy would be "more probable" to a government workout. Stocks, in deference to reality, continued to soar through midday.
The Chicago Sun-Times filed for bankruptcy and President Obama flew off to London for a meeting of the G20, which, by most accounts, will accomplish nothing, as the parties are far apart on major issues such as taxation, regulation and stimulus. The conference begins tomorrow, though the demonstrations began in earnest today.
All of this led to a very fractured market at the close of one of the most volatile quarters in market history. Though March will be remembered as one of the best in market history, all major indices are down for the year by anywhere from 7-12%. and even though stocks finished the session with gains, there was a widespread feeling that the bears had actually carried the day.
Dow 7,608.92, +86.90 (1.16%)
NASDAQ 1,528.59, +26.79 (1.78%)
S&P 500 797.87, +10.34 (1.31%)
NYSE Composite 4,978.98, +79.93 (1.63%)
Nevertheless, advancing issues finished well ahead of decliners, 4720-1798, and new lows outnumbered new highs, 75-18, a string of daily wins for new lows which stretches all the way back to October, 2007, with the exception of 5 to 8 sessions with more new highs than lows. This has been the most accurate metric for measuring the market, since the bear market began in August of 2007, now stretching to 18 months, making this one of the longest bears in market history. Volume was off just a touch and seemed especially sluggish though the middle of the session, though very strong in the final 30 minutes.
NYSE Volume 1,638,661,000
NASDAQ Volume 2,145,532,000
Commodities were volatile as well though almost all ended with gains. Crude oil for May delivery ended the day higher by $1.49, at $49.90. Gold gained $7.30, to $925.00, while silver, the only loser of the major commodities, was down a nickel, to $12.99.
Market participants will be greeted early, at 8:15 am, by the ADP Employment survey for March, a precursor to Friday's government non-farm payroll report.
April Fool's Day starts a new quarter and a new month. March was the first month in six in which the Dow Jones Industrials registered a gain.
Monday, March 30, 2009
GM, Chrysler Kaput. Is This News to Anybody?
Remarkably, the monstrous sell-off to begin what surely will be a testy week for investors, had as its catalyst an announcement by the federal government that the plans submitted by GM and Chrysler were inadequate in terms of qualifying for further federal assistance.
Remarkable in that the two companies have shown limited ability to comprehend the depth of their own problems, let alone the issues facing the entire global economy or the dictates which have been nothing if not clear from the Obama administration. Both companies have already received government assistance in the billions of dollars, have had ample time to devise realistic plans for their futures, and, even then, are asking for billions more.
Anyone with half a brain still functioning who had seen snippets of their plans - especially that of GM - could have seen with one eye closed that their projections were completely out of line with reality. GM, for instance, based many of its assumptions on selling 14 million vehicles in 2010, when they didn't even crack the 9 million mark in 2008. As far as Chrysler is concerned, their problems should not be an issue of national importance. They certainly are not too big to failnor are they worthy of any kind of public assistance, since they are a private company 80% owned by equity investors, Cerberus Capital, which has at its head, former Treasury Secretary John Snow and long ago decided to put Bob Nardelli in charge of Chrysler, the same Bob Nardelli who oversaw, as CEO, the near-destruction of Home Depot (HD) . Cerberus has already shed itself of Daimler, the profitable German subsidiary, and plans to partner with Italian automaker Fiat, a company in the throes of its own meltdown.
If the managers at Fiat have any sense, they'll steer themselves away from this private group of corporate bunglers, as should the government and taxpayers. And if anyone thinks that CEO Rick Waggoner, who submitted his resignation Monday at the behest of the White House, should be the beneficiary of any sympathy, bear in mind that under Waggoner's leadership, GM lost nearly $100 billion dollars and continued to build cars, trucks, vans and SUVs that guzzle gas and have limited appeal as its market share shrank and its stock price cratered.
These two bankrupt automakers, like the corrupt, insolvent, worthless national banks, should be allowed to do what all companies which have ceased to be competitive do: fail, file bankruptcy and either liquidate or reorganize. There's no good cause to keep them functioning any longer even though the damage to the economy would be paramount. The UAW would see 180,000 workers furloughed, pensioners could lose most of their future benefits and bondholders would be forced to take 10% or less on their dollars.
Life gets very tough when you don't have a backstop to bail you out, but this fiasco is just a furtherance of the insane, contradictory polices emanating from the Capitol and White House. The government has become such a major intermediary into business and Wall Street that their refusal to dole out more corporate welfare to companies that don't get it, causes a stock market rout and a resumption of the fear factor which has gripped the country for months, but took a few weeks in abeyance during the recent bear market rally.
Today's losses sent every index and sector into a tailspin which actually started on Friday of last week and probably won't end until the market is back below 7000 and looking to retest the March 9 multi-year lows.
Looking at the markets realistically, the bounce off the lows was so rapid and mostly unwarranted that an equally-severe snapback should have been expected. Despite the closing numbers, stocks were down even more in late afternoon trading before a mini-rally and short-covering brought all of the indices off their lows of the day.
Bulls can take some heart in the idea that the markets didn't completely fall off a cliff, and that volume was not nearly as high as last week's, though it points up the conclusion of more savvy investors that there are still a good number of players out there waiting to be skinned by the bears in coming days and weeks.
According to Investors Intelligence's Weekly Sentiment Poll bearish sentiment at the market lows earlier in the month were not even 50%, checking in at 47.2% at the bottom, hardly an indication of a market bottom. Sentiment would have to be closer to 80%, signaling capitulation, a condition to which today may have put us closer. It now seems almost certain that before the end of summer the market will finally roll over and die, though a few more trillion of investor dollars will have to be vaporized before the message finally becomes clear to the massive numbers of ill-informed investors which populate all income levels, from novice to wizened veteran.
The US economy is wrecked beyond simple recession-like repair, our banking system at the top is dysfunctional (though many smaller local and regional banks are healthy and poised to grow), unemployment will continue to rise well past 10%, states and municipalities are broke, consumers tapped out, homeowners hunkered down against high taxes and utility bills and the federal government running out of excuses as fast as they concoct rescues.
We are in a world of hurt and if you don't recognize all of the patterns, you deserve to lose everything. It's that stark and simple.
Dow 7,522.02, -254.16 (3.27%)
NASDAQ 1,501.80, -43.40 (2.81%)
S&P 500 787.53, -28.41 (3.48%)
NYSE Composite 4,899.05, -197.59 (3.88%)
On the day, market internals were miserable and pointing towards even worse conditions. Declining issues overwhelmed advancers, 5373-1163, and while that's nearly a 5-1 ratio, it was closer to 8-1 midday, and will almost certainly approach those levels at least a couple of times in coming days and weeks. Stocks reaching new 52-week lows - moderated by the huge number of companies which had already collapsed by this time last year - numbered 109, as compared to the feeble 14 new highs. As stated above, volume was off a bit from last week's strong levels.
NYSE Volume 1,511,506,000
NASDAQ Volume 2,028,632,000
Commodities witnessed a resumption of the deflation trade, with crude oil taking a big hit, down $3.97, to $48.41. Gold lost $7.60, closing at $917.70. Silver shed 23 cents, to $13.03. Almost every other major commodity was traded lower, except natural gas, which finished unchanged at the depressed price of $3.80/mmbtu.
Other financial news was similarly dire. Washington Mutual (WaMu) and its key executives are the subject of a massive class action lawsuit, home foreclosures were sharply higher in February and JP Morgan Chase will refund over $4 million to credit card holders who began paying $10/per month in additional fees in January. The deal was struck under pressure from NY Attorney General Andrew Cuomo.
As the week progresses, more economic reports will be revealed, including home prices, consumer confidence, auto and truck sales, private sector employment, all leading up to Friday's non-farm payroll report for March and new unemployment statistics.
Hold onto your hats, but sell your stocks if you played and have any gains over the past few weeks.
Remarkable in that the two companies have shown limited ability to comprehend the depth of their own problems, let alone the issues facing the entire global economy or the dictates which have been nothing if not clear from the Obama administration. Both companies have already received government assistance in the billions of dollars, have had ample time to devise realistic plans for their futures, and, even then, are asking for billions more.
Anyone with half a brain still functioning who had seen snippets of their plans - especially that of GM - could have seen with one eye closed that their projections were completely out of line with reality. GM, for instance, based many of its assumptions on selling 14 million vehicles in 2010, when they didn't even crack the 9 million mark in 2008. As far as Chrysler is concerned, their problems should not be an issue of national importance. They certainly are not too big to failnor are they worthy of any kind of public assistance, since they are a private company 80% owned by equity investors, Cerberus Capital, which has at its head, former Treasury Secretary John Snow and long ago decided to put Bob Nardelli in charge of Chrysler, the same Bob Nardelli who oversaw, as CEO, the near-destruction of Home Depot (HD) . Cerberus has already shed itself of Daimler, the profitable German subsidiary, and plans to partner with Italian automaker Fiat, a company in the throes of its own meltdown.
If the managers at Fiat have any sense, they'll steer themselves away from this private group of corporate bunglers, as should the government and taxpayers. And if anyone thinks that CEO Rick Waggoner, who submitted his resignation Monday at the behest of the White House, should be the beneficiary of any sympathy, bear in mind that under Waggoner's leadership, GM lost nearly $100 billion dollars and continued to build cars, trucks, vans and SUVs that guzzle gas and have limited appeal as its market share shrank and its stock price cratered.
These two bankrupt automakers, like the corrupt, insolvent, worthless national banks, should be allowed to do what all companies which have ceased to be competitive do: fail, file bankruptcy and either liquidate or reorganize. There's no good cause to keep them functioning any longer even though the damage to the economy would be paramount. The UAW would see 180,000 workers furloughed, pensioners could lose most of their future benefits and bondholders would be forced to take 10% or less on their dollars.
Life gets very tough when you don't have a backstop to bail you out, but this fiasco is just a furtherance of the insane, contradictory polices emanating from the Capitol and White House. The government has become such a major intermediary into business and Wall Street that their refusal to dole out more corporate welfare to companies that don't get it, causes a stock market rout and a resumption of the fear factor which has gripped the country for months, but took a few weeks in abeyance during the recent bear market rally.
Today's losses sent every index and sector into a tailspin which actually started on Friday of last week and probably won't end until the market is back below 7000 and looking to retest the March 9 multi-year lows.
Looking at the markets realistically, the bounce off the lows was so rapid and mostly unwarranted that an equally-severe snapback should have been expected. Despite the closing numbers, stocks were down even more in late afternoon trading before a mini-rally and short-covering brought all of the indices off their lows of the day.
Bulls can take some heart in the idea that the markets didn't completely fall off a cliff, and that volume was not nearly as high as last week's, though it points up the conclusion of more savvy investors that there are still a good number of players out there waiting to be skinned by the bears in coming days and weeks.
According to Investors Intelligence's Weekly Sentiment Poll bearish sentiment at the market lows earlier in the month were not even 50%, checking in at 47.2% at the bottom, hardly an indication of a market bottom. Sentiment would have to be closer to 80%, signaling capitulation, a condition to which today may have put us closer. It now seems almost certain that before the end of summer the market will finally roll over and die, though a few more trillion of investor dollars will have to be vaporized before the message finally becomes clear to the massive numbers of ill-informed investors which populate all income levels, from novice to wizened veteran.
The US economy is wrecked beyond simple recession-like repair, our banking system at the top is dysfunctional (though many smaller local and regional banks are healthy and poised to grow), unemployment will continue to rise well past 10%, states and municipalities are broke, consumers tapped out, homeowners hunkered down against high taxes and utility bills and the federal government running out of excuses as fast as they concoct rescues.
We are in a world of hurt and if you don't recognize all of the patterns, you deserve to lose everything. It's that stark and simple.
Dow 7,522.02, -254.16 (3.27%)
NASDAQ 1,501.80, -43.40 (2.81%)
S&P 500 787.53, -28.41 (3.48%)
NYSE Composite 4,899.05, -197.59 (3.88%)
On the day, market internals were miserable and pointing towards even worse conditions. Declining issues overwhelmed advancers, 5373-1163, and while that's nearly a 5-1 ratio, it was closer to 8-1 midday, and will almost certainly approach those levels at least a couple of times in coming days and weeks. Stocks reaching new 52-week lows - moderated by the huge number of companies which had already collapsed by this time last year - numbered 109, as compared to the feeble 14 new highs. As stated above, volume was off a bit from last week's strong levels.
NYSE Volume 1,511,506,000
NASDAQ Volume 2,028,632,000
Commodities witnessed a resumption of the deflation trade, with crude oil taking a big hit, down $3.97, to $48.41. Gold lost $7.60, closing at $917.70. Silver shed 23 cents, to $13.03. Almost every other major commodity was traded lower, except natural gas, which finished unchanged at the depressed price of $3.80/mmbtu.
Other financial news was similarly dire. Washington Mutual (WaMu) and its key executives are the subject of a massive class action lawsuit, home foreclosures were sharply higher in February and JP Morgan Chase will refund over $4 million to credit card holders who began paying $10/per month in additional fees in January. The deal was struck under pressure from NY Attorney General Andrew Cuomo.
As the week progresses, more economic reports will be revealed, including home prices, consumer confidence, auto and truck sales, private sector employment, all leading up to Friday's non-farm payroll report for March and new unemployment statistics.
Hold onto your hats, but sell your stocks if you played and have any gains over the past few weeks.
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