Stocks traded in different directions on different exchanges, with the Dow and S&P up and the NASDAQ and NYSE Comp. lower. This has been a recurring theme of late due to the diversity of opinion on market direction and the relative benefits and deficiencies of various sectors in play.
The bottom line is that no sector has been a safe haven and that stocks as a whole have withered over the past month. With earnings reports coming out soon, stocks are sure to be under pressure for the next three to five weeks.
All of the major indices spent most of the day in the red, though there was noticeable buying effort in the afternoon, mostly among financials and health care-related issues.
Dow 8,324.87, +44.13 (0.53%)
NASDAQ 1,787.40, -9.12 (0.51%)
S&P 500 898.72, +2.30 (0.26%)
NYSE Composite 5,770.00, -5.24 (0.09%)
While the headline numbers may have been confusing, there was clarity in the internals, as declining issues raced past gainers, 3932-2446. New lows checked in at 83, with only 34 stocks making new highs. Volume remained at embarrassingly low levels.
NYSE Volume 1,140,635,000
NASDAQ Volume 1,996,618,000
Commodities continued to take on water, as they did at the end of last week. Oil sank to its lowest level in six weeks, closing down $2.68, at $64.05. Gold was down $6.70, to $924.30. Silver fell 17 cents to $13.24.
Deflationary pressure remains a key issue for economists world-wide.
Monday, July 6, 2009
Thursday, July 2, 2009
Stocks Hammered on Unemployment Data
Taking its queue from another back-sliding non-farms payroll report, stocks sold off right from the opening bell and finished with a loss rivaling the June 15 and June 22 losses of 28 and 22 points, respectively, the difference being that those prior losses occurred on Mondays, opening weeks, whereas this one ended a week, and was leading into a holiday weekend to boot, an ominous sign.
The data from the Bureau of Labor Statistics (BLS), released an hour prior to the market's opening bell, showed a worsening condition in the labor market, with a loss of 467,000 jobs for the month of June. Expectations were for many fewer job losses, in the range of 385,000. May job losses of were revised positively, to -322,000, from -345,000. The unemployment rate rose to 9.5%. True unemployment, including those whose unemployment insurance had expired without securing a new job, was estimated at 16.5%.
First time claims came in at 614,000 for the most recent week, another blow to the recovery crowd.
President Obama called the numbers, "sobering," while many others were calling the increased unemployment predictable and Obama's recovery plans ineffective. The administration is facing increased pressure to right the economy, as most average Americans are not seeing any improvement in their standards of living, better job prospects or assistance meeting mortgage and credit obligations.
Major indices fell for the third consecutive week, confirming beliefs that the market has made a short term negative turn. The Dow, NASDAQ and S&P all finished within support ranges - 8300, 1800 and 900, respectively.
Factory orders were up 1.2% in May after a revised gain of 0.5% in April, but the employment numbers overshadowed those marginally improved results.
Dow 8,284.21, -219.85 (2.59%)
NASDAQ 1,796.52, -49.20 (2.67%)
S&P 500 897.04, -26.29 (2.85%)
NYSE Composite 5,779.64, -174.37 (2.93%)
Losers beat gainers by a huge margin (5206-1155) and new lows overtook new highs, 59-29. Perhaps the most "sobering" figure was that of the day's volume of trade, which hit levels so low as to ring the liquidity alarm. Markets are so turgid and corrupted, that, in addition to the normal summer slowdown, trading volumes have hit multi-year lows. If US markets cannot be relied upon as providing some degree of flexibility and volatility, traders will seek out more pliant markets.
It is quite possible that the low volume levels are reflective of net outflows from US equities into other markets. This was the fear in Treasuries, though the poor liquidity scenario may have struck Wall Street instead. If that is the case, one could hardly blame an investor for seeking safer havens offering better returns. As the new high-new low indicator has been relevant throughout the market's decline, now volume is becoming more intriguing by the day.
NYSE Volume 626,027,000
NASDAQ Volume 1,955,272,000
Sentiment from the unemployment numbers spilled over into the commodity market, where crude oil stumbled badly, off $2.58, to $66.73. Gold slipped $10.30, to $931.00, with silver finishing lower by 35 cents, at $13.41.
Earnings reports will begin to fill the news hole next week. Judging by current data, some expectations may have to be lowered and the start date for recovery pushed back to a more realistic date, some time next year.
Enjoy the 4th, remembering that the holiday is all about FREEDOM.
The data from the Bureau of Labor Statistics (BLS), released an hour prior to the market's opening bell, showed a worsening condition in the labor market, with a loss of 467,000 jobs for the month of June. Expectations were for many fewer job losses, in the range of 385,000. May job losses of were revised positively, to -322,000, from -345,000. The unemployment rate rose to 9.5%. True unemployment, including those whose unemployment insurance had expired without securing a new job, was estimated at 16.5%.
First time claims came in at 614,000 for the most recent week, another blow to the recovery crowd.
President Obama called the numbers, "sobering," while many others were calling the increased unemployment predictable and Obama's recovery plans ineffective. The administration is facing increased pressure to right the economy, as most average Americans are not seeing any improvement in their standards of living, better job prospects or assistance meeting mortgage and credit obligations.
Major indices fell for the third consecutive week, confirming beliefs that the market has made a short term negative turn. The Dow, NASDAQ and S&P all finished within support ranges - 8300, 1800 and 900, respectively.
Factory orders were up 1.2% in May after a revised gain of 0.5% in April, but the employment numbers overshadowed those marginally improved results.
Dow 8,284.21, -219.85 (2.59%)
NASDAQ 1,796.52, -49.20 (2.67%)
S&P 500 897.04, -26.29 (2.85%)
NYSE Composite 5,779.64, -174.37 (2.93%)
Losers beat gainers by a huge margin (5206-1155) and new lows overtook new highs, 59-29. Perhaps the most "sobering" figure was that of the day's volume of trade, which hit levels so low as to ring the liquidity alarm. Markets are so turgid and corrupted, that, in addition to the normal summer slowdown, trading volumes have hit multi-year lows. If US markets cannot be relied upon as providing some degree of flexibility and volatility, traders will seek out more pliant markets.
It is quite possible that the low volume levels are reflective of net outflows from US equities into other markets. This was the fear in Treasuries, though the poor liquidity scenario may have struck Wall Street instead. If that is the case, one could hardly blame an investor for seeking safer havens offering better returns. As the new high-new low indicator has been relevant throughout the market's decline, now volume is becoming more intriguing by the day.
NYSE Volume 626,027,000
NASDAQ Volume 1,955,272,000
Sentiment from the unemployment numbers spilled over into the commodity market, where crude oil stumbled badly, off $2.58, to $66.73. Gold slipped $10.30, to $931.00, with silver finishing lower by 35 cents, at $13.41.
Earnings reports will begin to fill the news hole next week. Judging by current data, some expectations may have to be lowered and the start date for recovery pushed back to a more realistic date, some time next year.
Enjoy the 4th, remembering that the holiday is all about FREEDOM.
Wednesday, July 1, 2009
Stocks Start 3rd Quarter with Modest Gains
After closing out what was a very good quarter with a final bummer of a day, investors toed the waters at the opening of the third quarter, nibbling at positions in a very slow session. Stocks finished with solid gains on low volume, after a slew of economic reports showed the economy remaining in the throes of recession, though clearly not in as rough shape as 3 to 6 months ago.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
The Chicago Purchasing Manager's Index (PMI) was up sharply in June, to 39.9, after a reading of 34.9 in May. Still, the number was well below 50, which is the threshold for expansion. The report confirmed continued weakness in manufacturing, though slightly improved on a month-to-month basis.
The Institute for Supply Management (ISM) index was also up in June, with a reading of 44.8 following a 42.8 number in May.
Construction spending for May was off 0.9%, offsetting a gain of 0.6% in the prior month. Pending home sales were up a marginal 0.1% in May, after April's surprisingly good showing of a 7.1% gain.
Finally, the ADP Employment Report [PDF}, an unbiased snapshot of the private labor market, recorded a loss of 473,000 jobs in May, slightly better than the 485,000 jobs lost in May.
With all that to chew on, stocks were up sharply right out of the gate, but peaked early in the day. After 10:30 am, the major indices lost value for the remainder of the session.
Dow 8,504.06, +57.06 (0.68%)
NASDAQ 1,845.72, +10.68 (0.58%)
S&P 500 923.31, +3.99 (0.43%)
NYSE Composite 5,953.82, +48.67 (0.82%)
Advancing issues took back the initiative over decliners, beating them, 4476-1870. New highs outnumbered new lows, 74-62, but volume was depressingly low, not uncommon in a holiday-shortened week. The markets will be closed on Friday.
NYSE Volume 950,845,000
NASDAQ Volume 2,000,025,000
Crude oil futures fell 58 cents, to $69.31, after the government reported a build in gasoline inventory of as much as 2.3 million barrels. That kind of data could spark a real rout in oil futures, as prices traditionally peak nearing the 4th of july holiday. With that much of a glut on the market and the economy generally weak, demand for oil and gas may remain slack for months, cutting into prices. One would normally think that in a true open market, but the futures market is anything but, dominated by hedge funds and large traders who can exert enormous control over price movements.
Gold shot up $13.90, to $941.30, while silver tacked on 16 cents, to $13.76.
The Commerce Department releases June Non-farm payroll data tomorrow morning prior to the market open. With the ADP figures already in hand, the government's massaged figures may prove anti-climactic. Still, we're off and running in the quarter which was promised to be the one in which recovery really began. There are still signs that the recession is easing off, but actual recovery may still be as many as 6 months away, if not more. Investors may find themselves hoping for more than companies can deliver, though there have been reports of analysts raising estimates for a large number of companies. If they can meet those numbers, stocks could actually advance further. We are now in the 23rd month of the bear market, so a turn could actually occur at any time, though I'd hedge my bets against it. Another sharp decline, and possibly a retest of the March lows are probably more likely.
Tuesday, June 30, 2009
Consumer Confidence and the Second American Revolution
Proof that I'm not a pessimist, but rather a realist, comes from The Conference Board's latest Consumer Confidence reading. As it turns out, pessimism may turn out to be a new national pastime if the 5000 households surveyed are any indication.
Check out these figures:
The overall index stands at 49.3 in June, down from 54.8. That number is much worse than it would appear on the surface. Consider that the index is calibrated to conform to a 1985 reading of 100. Well, life certainly wasn't perfect in 1985, so the index being more than halved in the subsequent 24 years means what? People are only half as satisfied or confident as they were then? In any case, it's not good.
Here's the really terrifying stuff. though. The percentage of people claiming that business conditions were "good" fell to 8.0%, from 8.8%. 8 percent! Now that's what I call pessimistic. There's more: People who thought jobs were plentiful: 4.7%; people who thought their incomes would increase in the next six months: 9.8%. Less than one in ten people expect a raise by December. That's pretty gloomy, no? Or maybe, just maybe, the people in this survey, which we assume is a nice cross-section of America, are not pessimists, but realists, who have seen the government's attempts at stimulus fall flat, who maybe don't believe all the lies from the controlled media, and who may have been around long enough and been through enough to lose faith in the federal government and its promises to fix everything.
America has always been an optimistic nation, but considering the current crop of politicians (largely failures) in the power structure of Washington, it is conceivable that many people have lost their patience and are losing faith in the "system," which is clearly broken and not about to be fixed by the people who broke it.
This is not to say that Americans are becoming pessimists, it's just saying that they're fed up with the status quo, and actually have been for quite some time. Americans may also be sending a message to Washington which goes something like this:
"We don't want more debt. We don't want a $1.75 trillion deficit. We want you (the government) to tighten your belts, cut spending and trim some of the fat. We are not on board with tax-and-spend, cap-and-trade, more expensive health care and the rest of your proposed plans for us. We are not standing with you, because you don't stand for us. If you continue, we shall stand against you."
That's pretty much it, isn't it? Americans are pretty tired of the US government, their state government and their local government sticking their noses into every last aspect of their lives and taxing them into oblivion. Nobody in Washington is currently listening to the American people and there's pretty good evidence that nobody's been listening for the past 10 years. Since they're not going to listen, then why pay them tribute? We owe them nothing. In fact, they owe us plenty.
Change will come, and mostly by the actions of government. Voting obviously hasn't made an impact, so the natural progression is for people to vote with their wallets and purses, and that's already occurring. Less and less revenue is flowing into government coffers and the flow will continue to slacken until it is just a trickle. This device, known as "starving the government" will produce change because the government will be unable to fund anything but the most rudimentary programs, and maybe not even those.
Americans, realists all, will not pay taxes and government will fall. That is our history, that is our right. The second American revolution has begun.
Noting that confidence is waning, Wall Streeters quickly abandoned their "window dressing" strategy in favor of a "jump ship" approach. After the Conference Board's report, stocks turned from narrowly positive to grossly negative in a hurry and stayed down for the remainder of the session. Coupled with yesterday's gains, the Dow is up a mind-boggling 8 points this week.
Dow 8,447.00, -82.38 (0.97%)
NASDAQ 1,835.04, -9.02 (0.49%)
S&P 500 919.33, -7.90 (0.85%)
NYSE Composite 5,905.14, -57.36 (0.96%)
Internals confirmed that the turnaround was no fluke. Declining issues outpaced advancers, 3653-2712. New lows surpassed new highs, breaking a three-day trend, 64-59. Volume was very light, as has been the case for most of the past month.
NYSE Volume 1,296,750,000
NASDAQ Volume 2,064,647,000
Like stocks, oil turned around on Tuesday, shedding $1.60, to close at $69.89. Gold also beat a steady retreat, losing $13.30, to $927.40. There was some dumping of silver as well, down 38 cents, to $13.60.
Americans are neither happy nor optimistic, a fairly obvious condition after being promised change but receiving more of the same. The time for real change has been at hand for some time. Whether Americans actually have the nerve and fortitude of their forefathers, only time will tell. Unheeded citizen complaints can only take one of two paths: reformation or tyranny.
Check out these figures:
The overall index stands at 49.3 in June, down from 54.8. That number is much worse than it would appear on the surface. Consider that the index is calibrated to conform to a 1985 reading of 100. Well, life certainly wasn't perfect in 1985, so the index being more than halved in the subsequent 24 years means what? People are only half as satisfied or confident as they were then? In any case, it's not good.
Here's the really terrifying stuff. though. The percentage of people claiming that business conditions were "good" fell to 8.0%, from 8.8%. 8 percent! Now that's what I call pessimistic. There's more: People who thought jobs were plentiful: 4.7%; people who thought their incomes would increase in the next six months: 9.8%. Less than one in ten people expect a raise by December. That's pretty gloomy, no? Or maybe, just maybe, the people in this survey, which we assume is a nice cross-section of America, are not pessimists, but realists, who have seen the government's attempts at stimulus fall flat, who maybe don't believe all the lies from the controlled media, and who may have been around long enough and been through enough to lose faith in the federal government and its promises to fix everything.
America has always been an optimistic nation, but considering the current crop of politicians (largely failures) in the power structure of Washington, it is conceivable that many people have lost their patience and are losing faith in the "system," which is clearly broken and not about to be fixed by the people who broke it.
This is not to say that Americans are becoming pessimists, it's just saying that they're fed up with the status quo, and actually have been for quite some time. Americans may also be sending a message to Washington which goes something like this:
"We don't want more debt. We don't want a $1.75 trillion deficit. We want you (the government) to tighten your belts, cut spending and trim some of the fat. We are not on board with tax-and-spend, cap-and-trade, more expensive health care and the rest of your proposed plans for us. We are not standing with you, because you don't stand for us. If you continue, we shall stand against you."
That's pretty much it, isn't it? Americans are pretty tired of the US government, their state government and their local government sticking their noses into every last aspect of their lives and taxing them into oblivion. Nobody in Washington is currently listening to the American people and there's pretty good evidence that nobody's been listening for the past 10 years. Since they're not going to listen, then why pay them tribute? We owe them nothing. In fact, they owe us plenty.
Change will come, and mostly by the actions of government. Voting obviously hasn't made an impact, so the natural progression is for people to vote with their wallets and purses, and that's already occurring. Less and less revenue is flowing into government coffers and the flow will continue to slacken until it is just a trickle. This device, known as "starving the government" will produce change because the government will be unable to fund anything but the most rudimentary programs, and maybe not even those.
Americans, realists all, will not pay taxes and government will fall. That is our history, that is our right. The second American revolution has begun.
Noting that confidence is waning, Wall Streeters quickly abandoned their "window dressing" strategy in favor of a "jump ship" approach. After the Conference Board's report, stocks turned from narrowly positive to grossly negative in a hurry and stayed down for the remainder of the session. Coupled with yesterday's gains, the Dow is up a mind-boggling 8 points this week.
Dow 8,447.00, -82.38 (0.97%)
NASDAQ 1,835.04, -9.02 (0.49%)
S&P 500 919.33, -7.90 (0.85%)
NYSE Composite 5,905.14, -57.36 (0.96%)
Internals confirmed that the turnaround was no fluke. Declining issues outpaced advancers, 3653-2712. New lows surpassed new highs, breaking a three-day trend, 64-59. Volume was very light, as has been the case for most of the past month.
NYSE Volume 1,296,750,000
NASDAQ Volume 2,064,647,000
Like stocks, oil turned around on Tuesday, shedding $1.60, to close at $69.89. Gold also beat a steady retreat, losing $13.30, to $927.40. There was some dumping of silver as well, down 38 cents, to $13.60.
Americans are neither happy nor optimistic, a fairly obvious condition after being promised change but receiving more of the same. The time for real change has been at hand for some time. Whether Americans actually have the nerve and fortitude of their forefathers, only time will tell. Unheeded citizen complaints can only take one of two paths: reformation or tyranny.
Monday, June 29, 2009
Stocks Gain to Open Week; Madoff Gets 150 Years
The most significant news story of the day was the sentencing of serial Ponzi-schemer Bernard Madoff by US District Court judge Denny Chin, who figuratively "threw the book" at the convicted swindler, issuing the maximum sentence of 150 years in prison to the 71-year-old. Madoff will spend the rest of his life behind bars for masterminding the largest securities fraud in history.
Perhaps one of just a few bright lights from the unwinding of the US economy, Madoff may never had been discovered if not for the horrific losses taken by the market in the fall of 2008. It was amid crashing stocks that Madoff first admitted his guilt as he could no longer maintain that his investments were making profits.
Ads Madoff heads out of the spotlight and behind bars, it's worth noting that various frauds, scams and scandals come to light during serious market declines. If Madoff proves to be the worst of them, all well and good, but there was surely more than the solitary machinations of a singular evil genius at work within the latest market crash. The bodies are all now safely buried in the books of Citigroup, Goldman Sachs, JP Morgan, Bank of America, Wells Fargo and Morgan Stanley. The real crimes have been neatly swept under the rug by Treasury Secretary Geithner and Fed Chairman Barnanke.
The words "toxic assets" have been swiftly dispatched from the standard economics news lexicon; those have all been absorbed by the Federal Reserve for future disposal. Accounting rules have been changed to accommodate the bankers, as usual. The same kinds of things happened before and during the Great Depression. Incompetence and lack of foresight in allowing a speculative bubble to get out of hand were the causes then, as now, and there will likely be more scandal, finger-pointing, accusations, firings and eventually, prosecutions of those who undermined the core of our economy.
The economy has suffered severe damage, stocks are overpriced in an unsustainable trading range, but the word on the street is that the bad times are already behind us. We can almost hear Roosevelt's campaigners singing "Happy Days Are Here Again."
We so wish it were so, but evidence points in the opposite direction. While our maladies may not ever approach those of the Great Depression, by some standards they already are. True unemployment figures point to 18-20% currently, but what never gets reported and is at the root of our problem, is the black market or "underground" economy, which the government stopped trying to measure back in the 1970s. From pot dealing to off-the-books labor, this illicit economy grows daily, eroding the tax base along with our confidence in government institutions.
So broad, vast and rapacious are federal and state taxes that companies and individuals are nearly coerced into cheating if only to ensure their own survival. The costs of taxation on business are so odious today that there's actually a disincentive to entrepreneurism. Nobody wants a partner that takes but never contributes. Still, people make money without paying taxes, and that's what - besides the incredible amount in aid to states - is really keeping the economy from going bust. There's a lot of money around, and nobody's starving or freezing yet. Let's hope it stays that way.
Dow 8,529.38, +90.99 (1.08%)
NASDAQ 1,844.06, +5.84 (0.32%)
S&P 500 927.23, +8.33 (0.91%)
NYSE Composite 5,962.50, +55.54 (0.94%)
As market participants apparently had cash on hand and nothing better to do with it, they bid up stocks early in the day and traded sideways after 10:00 in the AM. As well as the final numbers look, the internals were conforming but far from encouraging. Advancing issues beat back decliners by a modest margin, 3540-2858. New highs surpassed new lows, 88-52, but volume was the most tepid in some time, somewhat expected in this shortened holiday week.
NYSE Volume 1,065,345,000
NASDAQ Volume 2,021,623,000
Oil shot up $2.33, to $71.49, as Nigerian rebels attacked an offshore oil rig and China announced it would add to its strategic reserves. Gold finished the day down 30 cents, at $940.70. Silver dropped 18 cents, to end the day at $13.98.
Again, there was little in the way of corporate or economic news. It looks like another slow trading week ahead.
Perhaps one of just a few bright lights from the unwinding of the US economy, Madoff may never had been discovered if not for the horrific losses taken by the market in the fall of 2008. It was amid crashing stocks that Madoff first admitted his guilt as he could no longer maintain that his investments were making profits.
Ads Madoff heads out of the spotlight and behind bars, it's worth noting that various frauds, scams and scandals come to light during serious market declines. If Madoff proves to be the worst of them, all well and good, but there was surely more than the solitary machinations of a singular evil genius at work within the latest market crash. The bodies are all now safely buried in the books of Citigroup, Goldman Sachs, JP Morgan, Bank of America, Wells Fargo and Morgan Stanley. The real crimes have been neatly swept under the rug by Treasury Secretary Geithner and Fed Chairman Barnanke.
The words "toxic assets" have been swiftly dispatched from the standard economics news lexicon; those have all been absorbed by the Federal Reserve for future disposal. Accounting rules have been changed to accommodate the bankers, as usual. The same kinds of things happened before and during the Great Depression. Incompetence and lack of foresight in allowing a speculative bubble to get out of hand were the causes then, as now, and there will likely be more scandal, finger-pointing, accusations, firings and eventually, prosecutions of those who undermined the core of our economy.
The economy has suffered severe damage, stocks are overpriced in an unsustainable trading range, but the word on the street is that the bad times are already behind us. We can almost hear Roosevelt's campaigners singing "Happy Days Are Here Again."
We so wish it were so, but evidence points in the opposite direction. While our maladies may not ever approach those of the Great Depression, by some standards they already are. True unemployment figures point to 18-20% currently, but what never gets reported and is at the root of our problem, is the black market or "underground" economy, which the government stopped trying to measure back in the 1970s. From pot dealing to off-the-books labor, this illicit economy grows daily, eroding the tax base along with our confidence in government institutions.
So broad, vast and rapacious are federal and state taxes that companies and individuals are nearly coerced into cheating if only to ensure their own survival. The costs of taxation on business are so odious today that there's actually a disincentive to entrepreneurism. Nobody wants a partner that takes but never contributes. Still, people make money without paying taxes, and that's what - besides the incredible amount in aid to states - is really keeping the economy from going bust. There's a lot of money around, and nobody's starving or freezing yet. Let's hope it stays that way.
Dow 8,529.38, +90.99 (1.08%)
NASDAQ 1,844.06, +5.84 (0.32%)
S&P 500 927.23, +8.33 (0.91%)
NYSE Composite 5,962.50, +55.54 (0.94%)
As market participants apparently had cash on hand and nothing better to do with it, they bid up stocks early in the day and traded sideways after 10:00 in the AM. As well as the final numbers look, the internals were conforming but far from encouraging. Advancing issues beat back decliners by a modest margin, 3540-2858. New highs surpassed new lows, 88-52, but volume was the most tepid in some time, somewhat expected in this shortened holiday week.
NYSE Volume 1,065,345,000
NASDAQ Volume 2,021,623,000
Oil shot up $2.33, to $71.49, as Nigerian rebels attacked an offshore oil rig and China announced it would add to its strategic reserves. Gold finished the day down 30 cents, at $940.70. Silver dropped 18 cents, to end the day at $13.98.
Again, there was little in the way of corporate or economic news. It looks like another slow trading week ahead.
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