Let's see if we can get this story right for a change.
When the markets opened at 9:30 am in New York, the flood of news could not have been more distressing. Three bank employees lost their lives in Greece, where government employees and other activists openly clashed with police (see video below). European markets were suffering intense losses, ranging between 1.28% (Great Britain) and 3.16% (Greece).
Here in the US, the precursor to the government's monthly non-farm payroll report (due out Friday morning), the monthly ADP private sector employment report [PDF] showed little progress for the month of April, with a mere 32,000 new jobs being created, hardly the kind of news investors are seeking. Hiring simply has not materialized, no matter how many times President Obama says, "we're making progress," or the news media hoists up another flag for economic recovery.
Stock futures trended deeply lower prior to the opening bell, with bond yields falling fast and the US dollar strengthening against the Euro, in particular. Once the trading was underway, stocks were slammed, with the Dow down 107 points in the opening minutes of trade and the NASDAQ falling 42 points, piercing its 50-day moving average.
Apparently, this kind of rational market reaction to bad news was too much for our intrepid clandestine market riggers - the Plunge Protection Team (PPT) - which swung into action less than 15 minutes after the open. Suddenly, markets around the globe began to turn. All of the major indices headed higher, with the Dow actually registering positive numbers by midday.
Eventually, all of the major indices closed at or below their respective 50-day MAs, but that was after the PPT made certain that small investors were skewered and the major banks and financial firms didn't suffer too badly. The government, the media and the Wall Street elite have a vested interest in glad-handing everybody and spreading as much cheer as possible, no matter how bad the economy is. Not only is there a great deal of money at risk, but for the politicians and financiers, their jobs might be lost if the truth be set loose upon the American public.
The downturn is in full force, whether the undercover lever-pullers like it or not. They've been throwing wads of money - in the billions and trillions of dollars - at the economy, with no discernible results. No new jobs are being created and, despite the glowing reports from Wall Street firms, the American middle class is going down the tubes in a very big hurry.
Residential real estate has experienced a momentary pause in its decline, but foreclosures are only being slowed because the banks have too many properties already in their greedy, little hands. They are taking massive losses on a daily basis, but accounting rules manage to hide most of the sins.
As with the slow grind down from October 2007 to September 2008, this stock market decline will not be sudden, thanks to the internal workings of the government agents. It will be slow, because, according to the powers that be, that's better for the American public. Everything must revolve around the election cycle, another crooked enterprise.
Dow 10,868.12, -58.65 (0.54%)
NASDAQ 2,402.29, -21.96 (0.91%)
S&P 500 1,165.87, -7.73 (0.66%)
NYSE Composite 7,258.02, -79.23 (1.08%)
Declining issues beat down advancers, 5100-1510, better than 3:1. New highs bettered new lows by the slimmest margin in over a year, 151-133. When that indicator rolls over, you will know that the rout is on. With the levels so close, now would be a good time to liquidate large portions of your portfolio, because there may little left if you think you can ride the market down or actually believe that "things are getting better."
Volume was at or near its highest level of the year, due, no doubt, to the incredible amount of shares which had to be bought and sold to bring the market back from its early depths.
NYSE Volume 7,701,488,000.00
NASDAQ Volume 2,980,217,000.00
Commodities also turned higher after an early sell-off, though nothing could save the crude oil futures from slipping another $2.77, to $79.97. Just a few days ago, crude was selling for $86/barrel. It's the one hopeful element from deflation at work - food and fuel should become much more affordable.
Gold got a bit of a boost, for reasons unknown, gaining $6.00, to $1,174.60. Silver was beaten down again, dropping 31 cents, to $17.51.
Markets may take a breather on Thursday, though there is the chance that many traders will opt to get out of the way of Friday's non-farm payroll report. Also, there are major elections in Europe over the weekend, so holding for Monday might not be the most-favored play.
Make no doubt about it. Europe is already in tatters. Great Britain is on the brink along with Portugal, Italy, Ireland, Spain, and, of course, Greece, the poster child for socialism's demise. US policy-makers continue down the European path in many regards, especially in terms of public entitlements, unfunded liabilities and rampant, unpayable debt.
Sooner or later, these issues must be addressed. Spending our way out of the mess we're has been already amply proven to be a failed element of Keynesian economics.
Almost forgot: there's a small problem off the southern US coast. Something about an oil leak...
Wednesday, May 5, 2010
Tuesday, May 4, 2010
Recovery Fake Out: America Becoming Zombie Nation
Television has a mesmerizing effect on people. It offers the uncanny ability to either engross the viewer or put them to sleep. On that latter point, just ask the hosts of late-night shows, like Jay Leno, who do their audience counts within the first fifteen minutes of the show because after that, Americans are nodding off "en masse."
TV is a kind of drug for the modern masses. Viewers tend to believe just about anything they see or hear on the tube, so when the major networks and their cable outlets keep chirping that the US economy is on the road to recovery, people automatically go along. After all, who wants to believe that the recent economic crisis - that actually had its roots in the late 90s - isn't already over? Nobody wants to be the party-pooper. We all need to get moving toward a brighter future. Right?
Well, some of us aren't convinced, especially since we've seen little evidence that the government or Wall Street has done anything to prevent another global economic meltdown like the one we witnessed in the fall of 2008, and since $8-12 trillion worth of extended benefits to the Wall Street zombie financial firms and another nearly $1 trillion in excess government spending (most of which went to near-bankrupt state treasuries), has produced no new jobs and few tangible results that look even remotely like a growing economy.
No, the troika of Wall Street, Washington and the well-kept, neat-and-tidy media non-investigators have pulled the wool over America's eyes again. And why not? As a nation, gullible Americans keep trusting governments, investment advisors and media pundits who say things are "getting better" even when we see no evidence of such in our personal lives. Have you or your spouse or any of your friends gotten a raise lately? Are firms fighting over the services of you or your buddies? Are you turning down lots of job offers? Are malls and strip centers opening new stores? Are restaurants and small businesses expanding? Are local, state and federal governments concerned more about dealing with tax-receipt surpluses or bone-crushing deficits?
Are prices going up so fast you can't seem to keep up? (Don't answer that yet.) Or are they somewhat stable in most areas? Food and fuel prices have remained fairly constant for over a year now.
Truth of the matter - sorry to keep harping on this, but nobody seems to get it - is that the downturn hasn't ended. In fact, it may be in a debt-induced state of near-term denial. Sure, Wall Street and stocks in general have recovered magnificently, but they did so on the back of billions of dollars worth of government no-interest loans (bailouts) and trillions worth of guarantees. It's what they do. They were given money and told to invest and spend. It wasn't that difficult of a task.
Right now, though, doubt is creeping back into the formula. Stocks may have reached an emotional and intellectual peak, a point at which neither enthusiasm nor analysis would lead an astute investor to buy. Then there's Goldman Sach, Greece and the rest of Europe to worry about, to say nothing of that growing oil slick in the Gulf of Mexico.
Of course, behind the scenes are millions of unsold homes in bank inventories, more foreclosures soon to come down the pike and those 8 million unemployed people on extended, extended benefits who still can't find reasonable work.
We also cannot leave out the Treasury and the Fed...
According to a new missive from Agora Financial (I neither support or decry their positions, and I am in no way affiliated with them), the US Treasury has already borrowed money from these sources:
All they're saying is that your pension plans may soon be obliterated by either a massive crash, debt explosion or spiraling inflation. The smart money is on the first two. Inflation is still a decade away. It simply cannot occur within the framework of a struggling economy with high unemployment (the government's own U6 reading is at 17%).
After Monday's wild ride upside, Tuesday was a real bummer, bringing Greece and most of Europe back into focus. Globablly, markets were hammered and the US was not spared by PPT intervention, late-breaking "good" news or any of the usual clandestine tricks. This one looks like the real deal. Unless Friday's April jobs report is a real hummer, stocks and the economy will continue down, probably slumping through the remainder of the second quarter, into the third.
Dow 10,926.77, -225.06 (2.02%)
NASDAQ 2,424.25, -74.49 (2.98%)
S&P 500 1,173.60, -28.66 (2.38%)
NYSE Composite 7,337.25, -205.87 (2.73%
The tone of today's decline was stark. declining issues overwhelmed advancers, 5611-1013. New highs eked out a small advantage over new lows, the smallest margin in many months, 169-98. That's a scary notion: that there may be more daily new lows than new highs some time soon. We had become so accustomed to seeing a huge gap there, but that particular metric, if it turns over, could be forecasting a major downturn. Volume was magnificent, close to the highest levels of the year, another ominous sign.
NYSE Volume 7,379,542,500.00
NASDAQ Volume 2,869,652,750.00
Oil was sent lower by speculators spooked by a weaker Euro, dropping $3.45, to $82.74. Gold trended lower for a second straight day, down $14.10, to $1,168.60, while silver took a spanking, losing $1.00, to $17.82.
This is not a pretty picture. despite $trillions of stimulus worldwide, massive bailouts and extraordinary measures by governments around the planet, nothing has been able to keep the global economy from continuing to contract. The recent upturn in GDP is mostly a chimera, short-lived and over-hyped. Nobody went bust except the bottom of the market: families, individuals and small businesses. All of the big firms were saved and are now operating as zombies. They have no real life of their own. All their numbers are crooked or cooked or both and the mood - not just in America, but globally - is dour.
We're at a critical turning point, and if there's no "sell in may and go away," a "June Swoon" is almost certain.
TV is a kind of drug for the modern masses. Viewers tend to believe just about anything they see or hear on the tube, so when the major networks and their cable outlets keep chirping that the US economy is on the road to recovery, people automatically go along. After all, who wants to believe that the recent economic crisis - that actually had its roots in the late 90s - isn't already over? Nobody wants to be the party-pooper. We all need to get moving toward a brighter future. Right?
Well, some of us aren't convinced, especially since we've seen little evidence that the government or Wall Street has done anything to prevent another global economic meltdown like the one we witnessed in the fall of 2008, and since $8-12 trillion worth of extended benefits to the Wall Street zombie financial firms and another nearly $1 trillion in excess government spending (most of which went to near-bankrupt state treasuries), has produced no new jobs and few tangible results that look even remotely like a growing economy.
No, the troika of Wall Street, Washington and the well-kept, neat-and-tidy media non-investigators have pulled the wool over America's eyes again. And why not? As a nation, gullible Americans keep trusting governments, investment advisors and media pundits who say things are "getting better" even when we see no evidence of such in our personal lives. Have you or your spouse or any of your friends gotten a raise lately? Are firms fighting over the services of you or your buddies? Are you turning down lots of job offers? Are malls and strip centers opening new stores? Are restaurants and small businesses expanding? Are local, state and federal governments concerned more about dealing with tax-receipt surpluses or bone-crushing deficits?
Are prices going up so fast you can't seem to keep up? (Don't answer that yet.) Or are they somewhat stable in most areas? Food and fuel prices have remained fairly constant for over a year now.
Truth of the matter - sorry to keep harping on this, but nobody seems to get it - is that the downturn hasn't ended. In fact, it may be in a debt-induced state of near-term denial. Sure, Wall Street and stocks in general have recovered magnificently, but they did so on the back of billions of dollars worth of government no-interest loans (bailouts) and trillions worth of guarantees. It's what they do. They were given money and told to invest and spend. It wasn't that difficult of a task.
Right now, though, doubt is creeping back into the formula. Stocks may have reached an emotional and intellectual peak, a point at which neither enthusiasm nor analysis would lead an astute investor to buy. Then there's Goldman Sach, Greece and the rest of Europe to worry about, to say nothing of that growing oil slick in the Gulf of Mexico.
Of course, behind the scenes are millions of unsold homes in bank inventories, more foreclosures soon to come down the pike and those 8 million unemployed people on extended, extended benefits who still can't find reasonable work.
We also cannot leave out the Treasury and the Fed...
According to a new missive from Agora Financial (I neither support or decry their positions, and I am in no way affiliated with them), the US Treasury has already borrowed money from these sources:
Little Luxembourg, no bigger than Rhode Island, gave us $104.2 billion. Russia has us on the hook for another $120 billion. Brazil, nearly $140 billion. Secretive banks in the Caribbean, nearly $190 billion...
Those thugs that run Iran, Iraq, Libya, Nigeria, Indonesia, and Venezuela? So far — along with a half-dozen other oil-producing nations — they've got us dangling for another $191 billion in I.O.U.s.
Great Britain just loaned us $214 billion. D.C. borrowed $523 billion from bankrupt state governments. And, as if the bank bailouts weren't bad enough, we're in hock another $630 billion to Wall Street financial firms and other buyers.
Japan owns a $712 billion slice of America. China owns a staggering $776 billion call on our capital. And guess who tops the list? The Fed itself, which uses dollars they print to buy up $4.785 TRILLION of their own debt, just to keep the prosperity illusion alive.
All they're saying is that your pension plans may soon be obliterated by either a massive crash, debt explosion or spiraling inflation. The smart money is on the first two. Inflation is still a decade away. It simply cannot occur within the framework of a struggling economy with high unemployment (the government's own U6 reading is at 17%).
After Monday's wild ride upside, Tuesday was a real bummer, bringing Greece and most of Europe back into focus. Globablly, markets were hammered and the US was not spared by PPT intervention, late-breaking "good" news or any of the usual clandestine tricks. This one looks like the real deal. Unless Friday's April jobs report is a real hummer, stocks and the economy will continue down, probably slumping through the remainder of the second quarter, into the third.
Dow 10,926.77, -225.06 (2.02%)
NASDAQ 2,424.25, -74.49 (2.98%)
S&P 500 1,173.60, -28.66 (2.38%)
NYSE Composite 7,337.25, -205.87 (2.73%
The tone of today's decline was stark. declining issues overwhelmed advancers, 5611-1013. New highs eked out a small advantage over new lows, the smallest margin in many months, 169-98. That's a scary notion: that there may be more daily new lows than new highs some time soon. We had become so accustomed to seeing a huge gap there, but that particular metric, if it turns over, could be forecasting a major downturn. Volume was magnificent, close to the highest levels of the year, another ominous sign.
NYSE Volume 7,379,542,500.00
NASDAQ Volume 2,869,652,750.00
Oil was sent lower by speculators spooked by a weaker Euro, dropping $3.45, to $82.74. Gold trended lower for a second straight day, down $14.10, to $1,168.60, while silver took a spanking, losing $1.00, to $17.82.
This is not a pretty picture. despite $trillions of stimulus worldwide, massive bailouts and extraordinary measures by governments around the planet, nothing has been able to keep the global economy from continuing to contract. The recent upturn in GDP is mostly a chimera, short-lived and over-hyped. Nobody went bust except the bottom of the market: families, individuals and small businesses. All of the big firms were saved and are now operating as zombies. They have no real life of their own. All their numbers are crooked or cooked or both and the mood - not just in America, but globally - is dour.
We're at a critical turning point, and if there's no "sell in may and go away," a "June Swoon" is almost certain.
Finding the Best Free Credit Report Service
If the 2008 financial crisis didn't already do enough damage to people's frazzled nerves, hidden, sometimes undetectable errors on a person's credit score can wreak havoc on one's personal finances and even jeopardize current or future employment opportunities.
The three major credit reporting agencies - TransUnion, Equifax and Experian - are responsible for keeping accurate records on millions of Americans, so there's potential for errors on credit reports; even finding differences between the three are common.
To help consumers sort through the maze of possibly conflicting reports, there are a number of services which will provide a free credit score, but finding which one of these services is best may also prove to be more a guessing game than making an educated choice.
One of the best among a large field of choices is FreeCreditScore.com. In addition to their 7-day free trial offer, the site also provides a wealth of information on what is important in one's credit history and tips on what separates a strong credit report from a weak one.
The three major credit reporting agencies - TransUnion, Equifax and Experian - are responsible for keeping accurate records on millions of Americans, so there's potential for errors on credit reports; even finding differences between the three are common.
To help consumers sort through the maze of possibly conflicting reports, there are a number of services which will provide a free credit score, but finding which one of these services is best may also prove to be more a guessing game than making an educated choice.
One of the best among a large field of choices is FreeCreditScore.com. In addition to their 7-day free trial offer, the site also provides a wealth of information on what is important in one's credit history and tips on what separates a strong credit report from a weak one.
Stocks Begin May with a Bang
Investors, at least for the first trading day of May, shunned the sage adage, "sell in May and go away," sending shares on all indices up sharply despite threatening news from the Gulf of Mexico, where an untamed oil leak threatens some of America's most cherished and productive marshlands lining the Louisiana coast.
While the world waits anxiously as the oil slick off the southern US coastline creeps closer to shore, the mood on Wall Street was exceptionally ebullient.
Dow 11,151.83, +143.22 (1.30%)
NASDAQ 2,498.74, +37.55 (1.53%)
S&P 500 1,202.26, +15.57 (1.31%)
NYSE Compos 7,543.15, +68.72 (0.92%
While equities were in sharp focus, commodities, including, somewhat surprisingly, crude oil, finished the day in mixed fashion. Oil futures finished lower by $1.23, closing at $84.93 for the June contract. Gold continued its steady climb, adding $3.40, to $1,186.10, though silver diverged, losing 16 cents, to $18.66.
With the ongoing potential disaster looming in the background and no real movement in the general economy, investors must have seen something other than the growing selling pressure from the previous week, taking the opportunity to snatch up stocks at what actually don't appear to be bargain prices.
Despite the super-sized gains of the day, Monday's - and especially first-of-the-month trading days - seem to be more guided by herding behavior than actual analysis, especially from fund managers who have no good options other than equities in which to park their clients' funds.
With earnings season largely behind them, the markets are seeking a catalyst for the next move, whether that be forward or back. Considering current conditions - the Gulf oil spill notwithstanding - one can hardly make a bullish case in the overall market, though some of the economic data of late, especially the ISM Index, which hit a 4-year high of 60.4 in April.
Still, there are far too many doubts swirling about for a major upside rally to materialize.
While the world waits anxiously as the oil slick off the southern US coastline creeps closer to shore, the mood on Wall Street was exceptionally ebullient.
Dow 11,151.83, +143.22 (1.30%)
NASDAQ 2,498.74, +37.55 (1.53%)
S&P 500 1,202.26, +15.57 (1.31%)
NYSE Compos 7,543.15, +68.72 (0.92%
While equities were in sharp focus, commodities, including, somewhat surprisingly, crude oil, finished the day in mixed fashion. Oil futures finished lower by $1.23, closing at $84.93 for the June contract. Gold continued its steady climb, adding $3.40, to $1,186.10, though silver diverged, losing 16 cents, to $18.66.
With the ongoing potential disaster looming in the background and no real movement in the general economy, investors must have seen something other than the growing selling pressure from the previous week, taking the opportunity to snatch up stocks at what actually don't appear to be bargain prices.
Despite the super-sized gains of the day, Monday's - and especially first-of-the-month trading days - seem to be more guided by herding behavior than actual analysis, especially from fund managers who have no good options other than equities in which to park their clients' funds.
With earnings season largely behind them, the markets are seeking a catalyst for the next move, whether that be forward or back. Considering current conditions - the Gulf oil spill notwithstanding - one can hardly make a bullish case in the overall market, though some of the economic data of late, especially the ISM Index, which hit a 4-year high of 60.4 in April.
Still, there are far too many doubts swirling about for a major upside rally to materialize.
Friday, April 30, 2010
Markets Go Boom... and Bust
What happened of significance that stocks would sell of so drastically on Friday?
Was it the DOJ announcing that a criminal probe of Goldman Sach's was underway (And that the G-Men were looking at issues other than the ABACUS deal noted in the SEC charges.)? Shares of Goldman Sachs (GS) fell 15.04, to 145.20, a decline of 9.4%, during Friday's session.
That might be a good start for a general market decline.
Or maybe that oil spill in the Gulf of Mexico is causing more than average general ill-will to be directed at multi-national corporations who pollute, don't pay taxes and cause monstrous disasters such as is unfolding in the marshes along the Louisiana coastline?
What about Greece... and Portugal... and Spain... and Italy? Is the debt bomb exploding over Europe destined to visit mainland America? Finance ministers are meeting over the weekend in hopes of hammering out a bailout for the destitute Greeks (they won't).
Could it be that the Senate finally getting around to debating - after weeks of Republican stonewalling at the behest of the nation's largest financial firms - senator Dodd's financial regulation legislation that has, as one of its many tentacles, authority to liquidate firms that it deems insolvent (Bank of America, Wells Fargo and Citigroup come to mind) and a slew of other amendments which would make the kind of cowboy financial engineering that typified the sub-prime era difficult to repeat.
All of those are good starting points for argument, but there are two likely causes which intersect with all other issues. First quarter GDP was reported to be measured at 3.2%, annualized. That is after 4th quarter '09 coming in at 5.6%. Investors with even fifth grade educations can do the math: the economy is slowing again and that brings to the forefront the words everybody dreads: "double dip."
The second cause is likely more mechanical than analytical. Stocks have been hovering around multi-year highs. People with large stakes and large profits probably figured that today was a good day to sell, just like Wednesday was. The reason Wall Street more resembles a casino than an investment market is because the big money, the people calling the shots and pulling the levers are all gamblers at heart. And, as gambling operations generally produce few winners but lots of losers, the winners are likely getting out of town.
From an emotional chart perspective, one look at a two year Dow chart reveals that the index is bumping into the bottom of the pre-Lehman resistance of September '08. Since little has been done to correct the abuses of the time or restore credibility and liquidity to credit markets, it only stands to reason that there will be no move through that Dow resistance level from 11,200 to 11,750.
Flagging Friday finishes are always troubling, but today's should be marked with multiple red flags. The global economic model, based largely upon central banking, fractional reserve requirements, fiat currencies already heavily in debt (read: insolvent) and currently devolving into nation-gobbling monstrosities, is severely broken and thus, sliced, diced, ad whipsawed according to the prevailing tone.
Economies, from you next-door neighbor to the county seat, to states and nations, are tettering on a balance beam built on public good will and creditworthiness and there isn't much of either of those in quantity at the present time. One could purport that economic circumstances today are worse than they were in 2008. Massive borrowing and easy money policies have not stemmed the tide of deflation that continues to waffle through every aspect of civilization.
One area which experienced strong gains on Friday was commodities, especially gold. With uncertain times comes a need to hold something material and money flowed into tangible assets today in a scared trade. More evidence of widespread deflation came from the bond pits, where the 10-year treasury dipped to 3.65% yield today. Interest rates simply have nowhere to go but down in a slumping, or even stagnating, economy.
Dow 11,008.61, -158.71 (1.42%)
NASDAQ 2,461.19, -50.73 (2.02%)
S&P 500 1,186.68, -20.10 (1.67%)
NYSE Composite 7,474.40, -114.89 (1.51%
There were 4904 losing stocks to 1669 winners. 547 new highs dwarfed a mere 41 new lows. Volume was significant as it has been most of the past 8 trading days. Money is moving, from stocks to commodities, fixed income and cash, a perfect brew for a further deflationary spiral, which never really stopped moving, but was only slowed by monetary moves by the Fed and other central banks.
NYSE Volume 6,859,333,000.00
NASDAQ Volume 2,689,440,250.00
Crude oil rallied 98 cents, to $86.15. Gold built another $11.70 on top of recent gains, finishing the week at $1,180.10, a 2010 high. Silver also rose 6 cents, to $18.61.
There's a world of hurt gaining momentum out there, and you can bet your last Kentucky Derby (tomorrow), mint julep dollar that the famous schemers and weasels of Wall Street are going to be left holding the most recent bag of pain. No, that taks has been assigned, as usual, to the middle class, the little guy, the working class.
Isn't it time to stop believing in the fairy tales of high finance and posturing politicians?
Was it the DOJ announcing that a criminal probe of Goldman Sach's was underway (And that the G-Men were looking at issues other than the ABACUS deal noted in the SEC charges.)? Shares of Goldman Sachs (GS) fell 15.04, to 145.20, a decline of 9.4%, during Friday's session.
That might be a good start for a general market decline.
Or maybe that oil spill in the Gulf of Mexico is causing more than average general ill-will to be directed at multi-national corporations who pollute, don't pay taxes and cause monstrous disasters such as is unfolding in the marshes along the Louisiana coastline?
What about Greece... and Portugal... and Spain... and Italy? Is the debt bomb exploding over Europe destined to visit mainland America? Finance ministers are meeting over the weekend in hopes of hammering out a bailout for the destitute Greeks (they won't).
Could it be that the Senate finally getting around to debating - after weeks of Republican stonewalling at the behest of the nation's largest financial firms - senator Dodd's financial regulation legislation that has, as one of its many tentacles, authority to liquidate firms that it deems insolvent (Bank of America, Wells Fargo and Citigroup come to mind) and a slew of other amendments which would make the kind of cowboy financial engineering that typified the sub-prime era difficult to repeat.
All of those are good starting points for argument, but there are two likely causes which intersect with all other issues. First quarter GDP was reported to be measured at 3.2%, annualized. That is after 4th quarter '09 coming in at 5.6%. Investors with even fifth grade educations can do the math: the economy is slowing again and that brings to the forefront the words everybody dreads: "double dip."
The second cause is likely more mechanical than analytical. Stocks have been hovering around multi-year highs. People with large stakes and large profits probably figured that today was a good day to sell, just like Wednesday was. The reason Wall Street more resembles a casino than an investment market is because the big money, the people calling the shots and pulling the levers are all gamblers at heart. And, as gambling operations generally produce few winners but lots of losers, the winners are likely getting out of town.
From an emotional chart perspective, one look at a two year Dow chart reveals that the index is bumping into the bottom of the pre-Lehman resistance of September '08. Since little has been done to correct the abuses of the time or restore credibility and liquidity to credit markets, it only stands to reason that there will be no move through that Dow resistance level from 11,200 to 11,750.
Flagging Friday finishes are always troubling, but today's should be marked with multiple red flags. The global economic model, based largely upon central banking, fractional reserve requirements, fiat currencies already heavily in debt (read: insolvent) and currently devolving into nation-gobbling monstrosities, is severely broken and thus, sliced, diced, ad whipsawed according to the prevailing tone.
Economies, from you next-door neighbor to the county seat, to states and nations, are tettering on a balance beam built on public good will and creditworthiness and there isn't much of either of those in quantity at the present time. One could purport that economic circumstances today are worse than they were in 2008. Massive borrowing and easy money policies have not stemmed the tide of deflation that continues to waffle through every aspect of civilization.
One area which experienced strong gains on Friday was commodities, especially gold. With uncertain times comes a need to hold something material and money flowed into tangible assets today in a scared trade. More evidence of widespread deflation came from the bond pits, where the 10-year treasury dipped to 3.65% yield today. Interest rates simply have nowhere to go but down in a slumping, or even stagnating, economy.
Dow 11,008.61, -158.71 (1.42%)
NASDAQ 2,461.19, -50.73 (2.02%)
S&P 500 1,186.68, -20.10 (1.67%)
NYSE Composite 7,474.40, -114.89 (1.51%
There were 4904 losing stocks to 1669 winners. 547 new highs dwarfed a mere 41 new lows. Volume was significant as it has been most of the past 8 trading days. Money is moving, from stocks to commodities, fixed income and cash, a perfect brew for a further deflationary spiral, which never really stopped moving, but was only slowed by monetary moves by the Fed and other central banks.
NYSE Volume 6,859,333,000.00
NASDAQ Volume 2,689,440,250.00
Crude oil rallied 98 cents, to $86.15. Gold built another $11.70 on top of recent gains, finishing the week at $1,180.10, a 2010 high. Silver also rose 6 cents, to $18.61.
There's a world of hurt gaining momentum out there, and you can bet your last Kentucky Derby (tomorrow), mint julep dollar that the famous schemers and weasels of Wall Street are going to be left holding the most recent bag of pain. No, that taks has been assigned, as usual, to the middle class, the little guy, the working class.
Isn't it time to stop believing in the fairy tales of high finance and posturing politicians?
Subscribe to:
Posts (Atom)
Posts
