On the heels of a long holiday weekend, investors were met with a troubling scenario on Monday, as there was hardly a headline upon which to base trading. As such, stocks took an immediate dive to the negative at the opening bell and stayed down until momentum traders brought the major indices back to positive bearings after the noon hour. The Dow lagged the S&P and NYSE Composite, with the NASDAQ making a sharp turn at midday and closing close to unchanged.
Overall, there was little movement in anticipation of major earnings announcements which begin this week and will be the focus of trading through the end of the month. Of course, following the key Wells Fargo pre-announcement from Thursday, there's a good deal of excitement and anxiety building over first quarter earnings from major banks. The schedule for bank earnings goes as follows: Goldman Sachs (GS) on April 14, JP Morgan Chase (JPM) on April 16, Citigroup (C) on April 17, Bank of America (BAC) on April 20 and Wells Fargo (WFC) on April 22.
It is notable that Wells Fargo is the last to report, as their actual announcement will more than likely result in a sell-off, the company already having jumped the shark by leaking out their earnings news. The balance of this week, however, will be dominated by the three big banks reporting and it should be quite a show.
Dow 8,057.81, -25.57 (0.32%)
NASDAQ 1,653.31, +0.77 (0.05%)
S&P 500 858.73, +2.17 (0.25%)
NYSE Composite 5,410.28, +33.84 (0.63%)
As for today, it was just a low-volume grind in a fairly tight range. For the time being, volatility has been wrung out of the markets if only because stocks have once again topped out. The next move, whether to the upside or down, will be decisive though earnings reports from various companies over time could contribute to wide swings.
Advancing issues were 4644, to 2855 declining. New lows beat down new highs, 93-31, with the margin increasing again. Volume was on the low side.
NYSE Volume 1,481,100,000
NASDAQ Volume 1,832,720,000
What the market was waiting all day for - Talbot's earnings for the 4th quarter and full year of 2008 - finally appeared online after the close. If the market is seeking direction, take note: The company, trading under the symbol TLB, reported a 4th quarter adjusted net loss (period ended January 31, 2009) of $128.4 million or $2.40 per share compared to last year’s adjusted net loss of $7.1 million or $0.13 per share.
Talbot's operates more than 1000 retail apparel stores in the US, UK and Canada, so all this does is re-confirm that the retail sector is in deep trouble. Shares were down nearly 20% in after-hours trading.
Well, that's what we thought the market was awaiting. Instead, Goldman Sachs decided to report a day earlier, posting earnings of $3.39 per share, beating forecasts of $1.64 per share. Expect stocks to gap up at the open tomorrow on that surprise.
What is troubling about Goldman Sachs' earnings is that since changing their designation from an investment bank to a commercial bank, they also changed their reporting periods, which can be seen plainly in this report. [PDF]
The problem is that the company seems to have completely eviscerated the month of December, 2008, in which - according to unpublished reports - the company lost $1 billion, or $2.15 per share, which would have dramatically changed their results. Goldman's actual results - including the December loss - should have been $1.24 per share, well below the expectations. This is all just spin, and possibly accounting fraud, which, of course, will not be investigated. Shares of Goldman Sachs were lower in after-hours trading.
Oil closed down $2.19, at $50.05. Gold gained $12.50, to $895.80, while silver edged higher by 44 cents, to close at $12.77.
With companies - notably banks - jumping the gun on earnings announcements, the trading environment has gone from nearly impossible to "forget it" status. Nothing makes sense any more. Banks which needed billions of dollars just months ago are now reporting healthy profits. Is it all a sham, a grand design to raid the US treasury? We may never know, but all indications sure seem to be pointing that way.
Monday, April 13, 2009
Thursday, April 9, 2009
The Fantasy Economy of US Banking
I am not going to rant and rave about how the corrupt, insolvent banksters who are in control of our economy goosed the market today by having Wells Fargo (WFC) jump the gun and pre-announce their outstanding earnings - some $3 billion worth - less than 2 weeks before their actual earnings date.
The bank announced prior to the market opening, which jump-started the futures and set the tone for the trading, with all of the major indices gapping up more than 2$ at the open.
No, I'm not going to rant about how utterly without integrity are the leaders of our country and the business community. I'm just going to tell you that I closed all of my positions today and will be out of this market for the foreseeable future.
Dow 8,083.38, +246.27 (3.14%)
NASDAQ 1,652.54, +61.88 (3.89%)
S&P 500 856.56, +31.40 (3.81%)
NYSE Composite 5,376.44, +200.03 (3.86%)
It should be noted that while Wells Fargo was up 31%, they were outdone by Bank of America, which posted a 35% gain on the day. Other Dow components in the financial sector with outsize gains were American Express (AXP), up 20%, JP Morgan Chase, up 19%, and Citigroup, up a mere 12%. Bear in mind that all of these companies were the beneficiaries of taxpayer bailout money and other favorable loan terms from the Federal Reserve and Treasury. Ben Bernanke and Tim Geithner are smiling with riches tonight. Welcome to the fantasy economy.
On the day, the spill-over from the banking boom sent advancers solidly ahead of declining issues, 5586-1033. However, new lows remained ahead of new highs, 80-38. Trading volume was quiet strong.
NYSE Volume 1,835,800,000
NASDAQ Volume 2,179,931,000
Over in the commodity pits, oil was up $2.86, to $52.24. Gold continued to stall, losing $2.60, to $883.30. Silver also fell, but only by a penny, to $12.33.
Tomorrow being Good Friday, the markets are taking the day off. While the government runs not only record deficits, but enormous ones, unemployment continues to rise unabated and the real estate market continues to struggle, all's well on Wall Street, where criminals run the banks and brokerages with money supplied by you and me.
Happy Easter. I hope you find some gold inside your eggs.
The bank announced prior to the market opening, which jump-started the futures and set the tone for the trading, with all of the major indices gapping up more than 2$ at the open.
No, I'm not going to rant about how utterly without integrity are the leaders of our country and the business community. I'm just going to tell you that I closed all of my positions today and will be out of this market for the foreseeable future.
Dow 8,083.38, +246.27 (3.14%)
NASDAQ 1,652.54, +61.88 (3.89%)
S&P 500 856.56, +31.40 (3.81%)
NYSE Composite 5,376.44, +200.03 (3.86%)
It should be noted that while Wells Fargo was up 31%, they were outdone by Bank of America, which posted a 35% gain on the day. Other Dow components in the financial sector with outsize gains were American Express (AXP), up 20%, JP Morgan Chase, up 19%, and Citigroup, up a mere 12%. Bear in mind that all of these companies were the beneficiaries of taxpayer bailout money and other favorable loan terms from the Federal Reserve and Treasury. Ben Bernanke and Tim Geithner are smiling with riches tonight. Welcome to the fantasy economy.
On the day, the spill-over from the banking boom sent advancers solidly ahead of declining issues, 5586-1033. However, new lows remained ahead of new highs, 80-38. Trading volume was quiet strong.
NYSE Volume 1,835,800,000
NASDAQ Volume 2,179,931,000
Over in the commodity pits, oil was up $2.86, to $52.24. Gold continued to stall, losing $2.60, to $883.30. Silver also fell, but only by a penny, to $12.33.
Tomorrow being Good Friday, the markets are taking the day off. While the government runs not only record deficits, but enormous ones, unemployment continues to rise unabated and the real estate market continues to struggle, all's well on Wall Street, where criminals run the banks and brokerages with money supplied by you and me.
Happy Easter. I hope you find some gold inside your eggs.
Wednesday, April 8, 2009
Stocks Are Cheap, I Guess
According to the expert headline writers at Yahoo! Finance, "Insurance Companies and Homebuilders Sparked Wednesday's Rally."
Really! They said that, which doesn't adequately explain why the NASDAQ was sporting an 85-15% up to down volume bias, and probably wasn't the reason for any rally at all. Why stocks rallied today may have been hope for more crookedness, in the form of a relaxation of shorting rules proposed by the SEC, or maybe they were right in part, at least as far as concerns insurance companies, because the Treasury is rumored to be planning to include some life insurance companies under the bailout umbrella of TARP.
As for homebuilders, Pulte Homes (PHM) agreed to purchase Centex (CTX) for $1.3 billion in stock, which is amazing in that its hard to believe any homebuilder could even be worth $1.3 billion, let alone have that amount of stock available for the purchase of another homebuilder. Maybe they've been getting secret TARP funds from Tim Geithner.
In any case, the rally was not all that large as to get uptight about it, considering that it is occurring in the middle of the worst financial meltdown in the history of the world. Yes, you read that right. The worst EVER. Beating the tulip bust, the fall of Rome and even our very own Great Depression. Additionally, the rally fell apart precisely at 2:00 pm. So much for homebuilders and failed insurance providers.
Why is this the worst financial meltdown ever, you ask? Simple, because during the Great Depression the USA was a net exporter and routinely ran budget surpluses rather than deficits. We were on the gold standard then, as compared to the "thin air" standard we've been on since 1971, when the great (satire), late Richard Nixon repudiated our debts by refusing to honor the Bretton Woods agreements, thus taking our currency from one being backed by gold to one being backed by "the full faith and credit" of the United States of America, which is a very bad joke today because nobody has any faith in America anymore and we are a nation strung out on credit. The burgeoning national debt, now surging past $12 trillion, will never be repaid, ever, so, yes, this is the worst economic crisis and collapse in the history of the planet.
There are other reasons, such as the fact that we no longer have an industrial base, having shipped all of that to foreign countries, and the social safety net, which includes social security, welfare, and unemployment benefit recipients, were not even around during the Great Depression, though now they act only as an increase on GDP and a net productivity loss. Those people are freeloaders, producing nothing. So, those of you who believe the official government figure of 8.5% unemployment, start including retirees, welfare loafers and people supposedly seeking work, and you can just jump that number up to about 20-25% of the population, the same unemployment that we had during the 30s, but now we simply don't count those people as it might scare some other people.
America is collapsing quickly, so one naturally wonders why stocks are going up when all indications are that they should be going down. Maybe not you, but that's how I spend my idle hours, which are growing by the day due to my outstanding investment (make that trading) skills, thank you.
Apparently, today's little rally was short-circuited precisely at 2:00 pm because that's when the Fed minutes from the last FOMC meeting were released, and, of course, the Fed said that conditions sucked (they use bigger words) and the geniuses on Wall Street - who apparently were unaware of the horrible economic conditions - decided they should sell.
This market sucks, though. It has no direction except down. The rally of the last 4 weeks was a mirage, a total fraud. The economy sucks, your stocks suck, this country is headed straight into a black hole, and the worst part of it is that because of our corrupt politicians, bankers, CEOs and news media, the American public is largely unaware of the condition. That, however, is expected, as the majority of Americans have college degrees but are dumber than nails about anything that really matters, like the economy, the constitution, the rule of law, etc.
Dow 7,837.11, +47.55 (0.61%)
NASDAQ 1,590.66, +29.05 (1.86%)
S&P 500 825.15, +9.60 (1.18%)
NYSE Composite 5,176.48, +55.81 (1.09%)
On the day, advancing issues actually outdid decliners, 4628-1772, but the one true gauge which has remained constant throughout this episode, stretching back to October of 2007, new lows exceeded new highs, 69-10. Volume was weak, well off levels of just a week ago, another signal that nobody is buying except insiders with positions to protect.
NYSE Volume 1,314,803,000
NASDAQ Volume 1,851,850,000
Commodities also spent most of the day yo-yoing up and down, like there was something to decide as concerns the direction of prices. Oil was down, then up, then finished with a minuscule gain of 23 cents, at $49.38. Whoop-de-do! Gold gained $2.26, but remains at depressed levels, closing at $885.90. Silver also was up 13 cents, to $12.34.
Our fabulous Treasury Secretary, Timothy Geithner, said that results of the bank stress tests will not be released until after earnings for the guilty parties are announced, a sure signal that all the books have been fully cooked. Geithner is an obvious obfuscator and a complete, incompetent liar.
The nation has been led by elite crooks and criminals and the American people are paying a huge price for allowing it. In the end, one can only hope that the politicians and bankers will receive the treatment they so richly deserve. While today's tidy gains may look positive to some, they were merely a means for the banksters to steal again from both sides, buyers and sellers.
Stocks were completely out of kilter. The NASDAQ gapped up and stayed up, the Dow underperformed, all manner of technical levels were violated, including the most important support at 7775 on the Dow, but none of that matters since fundamentals don't matter, nor does sentiment, economic reports, earnings or any other measure. The big money makes the markets dance and they are playing all the wrong tunes right now.
The move engulfed yesterday completely, marking the 4th straight day of lower highs and lower lows, leaving investors scratching their heads in search of direction. Don't be fooled. The fundamentals are horrid and the markets will continue to decline. It's just a matter of when and by how much. Dow 5500 is looking pretty good, but 4000 is certainly not out of the question.
Stocks really aren't cheap, considering that in the near future, say six to nine months, most of them will be bankrupt or close to it. Some already are.
Really! They said that, which doesn't adequately explain why the NASDAQ was sporting an 85-15% up to down volume bias, and probably wasn't the reason for any rally at all. Why stocks rallied today may have been hope for more crookedness, in the form of a relaxation of shorting rules proposed by the SEC, or maybe they were right in part, at least as far as concerns insurance companies, because the Treasury is rumored to be planning to include some life insurance companies under the bailout umbrella of TARP.
As for homebuilders, Pulte Homes (PHM) agreed to purchase Centex (CTX) for $1.3 billion in stock, which is amazing in that its hard to believe any homebuilder could even be worth $1.3 billion, let alone have that amount of stock available for the purchase of another homebuilder. Maybe they've been getting secret TARP funds from Tim Geithner.
In any case, the rally was not all that large as to get uptight about it, considering that it is occurring in the middle of the worst financial meltdown in the history of the world. Yes, you read that right. The worst EVER. Beating the tulip bust, the fall of Rome and even our very own Great Depression. Additionally, the rally fell apart precisely at 2:00 pm. So much for homebuilders and failed insurance providers.
Why is this the worst financial meltdown ever, you ask? Simple, because during the Great Depression the USA was a net exporter and routinely ran budget surpluses rather than deficits. We were on the gold standard then, as compared to the "thin air" standard we've been on since 1971, when the great (satire), late Richard Nixon repudiated our debts by refusing to honor the Bretton Woods agreements, thus taking our currency from one being backed by gold to one being backed by "the full faith and credit" of the United States of America, which is a very bad joke today because nobody has any faith in America anymore and we are a nation strung out on credit. The burgeoning national debt, now surging past $12 trillion, will never be repaid, ever, so, yes, this is the worst economic crisis and collapse in the history of the planet.
There are other reasons, such as the fact that we no longer have an industrial base, having shipped all of that to foreign countries, and the social safety net, which includes social security, welfare, and unemployment benefit recipients, were not even around during the Great Depression, though now they act only as an increase on GDP and a net productivity loss. Those people are freeloaders, producing nothing. So, those of you who believe the official government figure of 8.5% unemployment, start including retirees, welfare loafers and people supposedly seeking work, and you can just jump that number up to about 20-25% of the population, the same unemployment that we had during the 30s, but now we simply don't count those people as it might scare some other people.
America is collapsing quickly, so one naturally wonders why stocks are going up when all indications are that they should be going down. Maybe not you, but that's how I spend my idle hours, which are growing by the day due to my outstanding investment (make that trading) skills, thank you.
Apparently, today's little rally was short-circuited precisely at 2:00 pm because that's when the Fed minutes from the last FOMC meeting were released, and, of course, the Fed said that conditions sucked (they use bigger words) and the geniuses on Wall Street - who apparently were unaware of the horrible economic conditions - decided they should sell.
This market sucks, though. It has no direction except down. The rally of the last 4 weeks was a mirage, a total fraud. The economy sucks, your stocks suck, this country is headed straight into a black hole, and the worst part of it is that because of our corrupt politicians, bankers, CEOs and news media, the American public is largely unaware of the condition. That, however, is expected, as the majority of Americans have college degrees but are dumber than nails about anything that really matters, like the economy, the constitution, the rule of law, etc.
Dow 7,837.11, +47.55 (0.61%)
NASDAQ 1,590.66, +29.05 (1.86%)
S&P 500 825.15, +9.60 (1.18%)
NYSE Composite 5,176.48, +55.81 (1.09%)
On the day, advancing issues actually outdid decliners, 4628-1772, but the one true gauge which has remained constant throughout this episode, stretching back to October of 2007, new lows exceeded new highs, 69-10. Volume was weak, well off levels of just a week ago, another signal that nobody is buying except insiders with positions to protect.
NYSE Volume 1,314,803,000
NASDAQ Volume 1,851,850,000
Commodities also spent most of the day yo-yoing up and down, like there was something to decide as concerns the direction of prices. Oil was down, then up, then finished with a minuscule gain of 23 cents, at $49.38. Whoop-de-do! Gold gained $2.26, but remains at depressed levels, closing at $885.90. Silver also was up 13 cents, to $12.34.
Our fabulous Treasury Secretary, Timothy Geithner, said that results of the bank stress tests will not be released until after earnings for the guilty parties are announced, a sure signal that all the books have been fully cooked. Geithner is an obvious obfuscator and a complete, incompetent liar.
The nation has been led by elite crooks and criminals and the American people are paying a huge price for allowing it. In the end, one can only hope that the politicians and bankers will receive the treatment they so richly deserve. While today's tidy gains may look positive to some, they were merely a means for the banksters to steal again from both sides, buyers and sellers.
Stocks were completely out of kilter. The NASDAQ gapped up and stayed up, the Dow underperformed, all manner of technical levels were violated, including the most important support at 7775 on the Dow, but none of that matters since fundamentals don't matter, nor does sentiment, economic reports, earnings or any other measure. The big money makes the markets dance and they are playing all the wrong tunes right now.
The move engulfed yesterday completely, marking the 4th straight day of lower highs and lower lows, leaving investors scratching their heads in search of direction. Don't be fooled. The fundamentals are horrid and the markets will continue to decline. It's just a matter of when and by how much. Dow 5500 is looking pretty good, but 4000 is certainly not out of the question.
Stocks really aren't cheap, considering that in the near future, say six to nine months, most of them will be bankrupt or close to it. Some already are.
Tuesday, April 7, 2009
Bear Market Rally Built on Fraud
Every day, day after day after day, the sharks on Wall Street do the same thing, over and over and over again. According to the new rules of the game, stocks are suddenly much more attractive at 2:30, or 3:00, or 3:15, or 3:30, without any news, without any economic reports, without any technical rationale, than they were earlier in the day.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
Monday, April 6, 2009
Wall Street Crooks Steal from Both Sides
Upon which side of the debate do you fall? Do you believe this is a bear market rally or the beginning of a new bull?
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Whatever your opinion, the big money which flows from the major brokerages has you covered. Today was a serious case in point of how the brokerages steal from both sides. Stocks began the day with losses, hit bottom at 12:30 and gained the rest of the day, finishing close to the best levels of the session, with minor losses.
The Dow, in particular, outperformed the other indices by a wide margin, likely owing to the fact that three of the major failed, insolvent banking institutions - Bank of America, JP Morgan Chase and Citigroup - are included in the average. Throw in American Express, General Motors and General Electric and you have what prosecutors would call means and motive for manipulating the Dow currency close to the break-even line, which is exactly what occurred on Monday.
Dow 7,975.85, -41.74 (0.52%)
NASDAQ 1,606.71, -15.16 (0.93%)
S&P 500 835.48, -7.02 (0.83%)
NYSE Composite 5,250.10, -68.65 (1.29%)
Apparently, financial outlooks were poor in the morning, but markedly improved in the afternoon. I prefer to believe that the major brokerages, which can exert as much or as little influence as they like, prefer their markets to be rigged in their favor. In any case, what the charts are yelling, loud and clear, is that the rally of recent weeks has run out of steam, having hit a trading and volume top on Thursday of last week and followed up with what amounts to churning the following two days.
Of course, I've been proven wrong before and there's a high probability that the Wall Street fixers will say, "to hell with the technicals," which are pointing upwards at heavy resistance, and just pump the indices right on through, declaring a new bull market, the end of banking problems and a new day in America.
There are more than a few detractors to the view, though the general tone of the lap-dog media is that conditions are improving, even though the only evidence of that are a couple of minor bounces off bottoms by a few random economic indicators and the actual stock market rally itself (which you can't count as a sign it's getting better and also use as the ultimate discounting mechanism).
Looking at market internals, it is notable that declining issues outnumbered advancing ones, 4497-1963, a 5-2 margin, which is much worse than the headline numbers suggest. Additionally, new low continued ahead of new highs, 66-18, a narrow edge, but one that has yet to flip over after favoring the new lows on a daily basis for more than 16 months.
Volume was down again, as it was Friday, suggesting a dearth of buying enthusiasm, not surprising after the giant run-up which has stretched to four weeks without interruption.
NYSE Volume 6,221,203,500
NASDAQ Volume 1,976,220,500
Commodities traded in a more realistic fashion, with oil down $1.46, to $51.05, though it traded below $50 briefly during the day. Gold's losses continued to mount, losing $24.50, to $872.80. Silver was also beaten down 63 cents, to finish at $12.11, a near-term low and a distinct buying opportunity.
Some have questioned my penchant for silver under $13.00 an ounce, so here's my rationale, simply put: At $13.80 per ounce, 90% silver coins, of which are the widest variety in the US, have a melt value exactly 10 times their face value, so it's an easy calculation, but, more importantly, if US greenbacks lose their value entirely, silver coins may become the currency of choice, and the 10X face value may become the accepted rate of exchange, though there's some room for thinking that the number could be 20X face value, which would be even better.
In any case, buying at $13/oz. or less, you will eventually be a winner when the US economy fully disintegrates. Whether it's by currency devaluation and resultant inflation, or, runaway deflation, silver coins will still maintain solid value either here or abroad. Don't get me wrong. I'd love to buy more pre-1964 Washington quarters and Morgan and Peace dollars at $6/oz., though sadly, those days seem to be long gone.
The metals and most other commodities continue to display classic deflation conditions. In such a scenario, investors and traders alike are victims of slack demand and consequent oversupply. The argument for deflation continues to gain traction as the Fed and treasury desperately try to inflate, though their efforts are largely staunched because they continue to throw money down the black hole that consists of the nation's five largest banks, plus AIG.
Another does of reality, courtesy former bank regulator, William K. Black:
An exceptional interview with Mr. Black was aired this past weekend on Bill Moyers Journal
Subscribe to:
Posts (Atom)
Posts
