Our markets are indeed funny creatures. After the Fed issued a $4.7 billion POMO, all the cumputers went out and bought shares of Apple (AAPL), the darling of the tech sector and the one stock - according to some estimates - that makes up 20% of the entire NASDAQ every day in volume.
Apple was up more than 4% on the day in anticipation of earnings which come out on Monday, Oct. 18.
Share of Google were catapulted into the stratosphere, up 60 points (11%) to just over $600 per share after the company reported earnings that beat aggressive estimates for the third quarter.
Otherwise, the rest of the market wasn't very impressed with Ben Bernanke's speech in which he almost gushed openly about QE2 and the need to re-inflate the economy. In other words, Ben simply can't wait to print up more money and debase the currency further.
One little problem - well, two - with Ben's strategy is that interest rates are already at record low levels and people are still reluctant to spend, and, that second little annoyance: unemployment continues to hang around the 10% level and isn't seen improving until sometime in... well, make your best guess.
So, besides the ultra-bubbly-looking NASDAQ stocks, the rest of the market drifted below the unchanged mark for almost the entire session. The Dow ended lower, the NASDAQ was on a launch pad and the S&P barely budged. What all of this is saying is that there's a great deal of dislocation between the stocks, the indices and investors. Divergence is usually a good harbinger for an impending crash, to which we alerted the world yesterday. We're still on that tack, but POMO, QE2, elections and jerry-rigging the markets aren't going to help achieve the desired unwind.
Angelo Mozilo, former head of former Countrywide Financial, settled his SEC case for $67 million, along with two of his henchmen, Eric Sieracki and David Sambol. The coverup and deceit of the federal agencies continues. There is still an open DOJ criminal investigation, but with the invisible man, Eric Holder, not particularly interested in prosecuting anybody for anything, the chances of it being dropped are approaching 100%.
As usual, nobody admitted any guilt and the odd twist is that Bank of America, which bought the company in 2007, will pay a good deal of the disgorgement and fines.
Prior to the Mozilo deal, BofA had already been downgraded by Standard and Poors, from a buy to a hold. The stock skidded all day, along with other bank stocks associated to the foreclosure fraud issues which continue to be played out, talked about and eventually likely will be extensively litigated.
Dow 11,062.78, -31.79 (0.29%)
NASDAQ 2,468.77, +33.39 (1.37%)
S&P 500 1,176.19, +2.38 (0.20%)
NYSE Composite 7,520.60, -25.99 (0.34%)
NASDAQ Volume 2,246,778,000
NYSE Volume 6,512,256,500
Despite the split decision in the indices, declining issues led advancers by an unhealthy amount, 3625-2778. New highs continued to dominate new lows, 607-65, though it is notable that the number of new lows is beginning to rise off absurd lows in the 20s, now up two straight days. Volume was very strong, though this being an options expiration day on top of the fat fiat money sent through on the POMO, that's not unexpected.
For a change, the major commodities were all lower. Oil lost $1.44, to $81.25. Gold fell $5.60, to $1,372.00. Even silver, which has been on a tremendous tear, shed 15 cents, to $24.29, still mighty pricey.
With elections just twelve trading days away, we anxiously await the essential "October surprise" moment. Will it be in the form of a market crash, a terror event or a political gaffe.
Ladies and gents, place your bets and have a nice weekend. Take the Jets!
Friday, October 15, 2010
Thursday, October 14, 2010
CRASH ALERT... BANKS ABOUT TO ROLL OVER AGAIN
As the headline suggests, Foreclosuregate has precipitated a front-running on the banks by investors who are rightfully scared that issues stemming from the rampant fraud, not only from foreclosure and robo-signing issues, but dating back to mortgage originations, bad paperwork, MERS, and the entire RMBS fiasco.
Proof was in the activity of the stocks that appear poised to take what amounts to a knockout blow: JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and the granddaddy of them all, Bank of America (BAC). Shares of these banks, which are the servicers of vast numbers of mortgages, many already in default or foreclosure, fell by 5-6% on the day.
On the other side of the sell-off are the monoline insurers, those companies which will gain from tranches of mortgages securities being "put back" to the banks as investors seek to be compensated and made whole at par for non-performing securities. Such entities such as AMBAC (ABK), MBIA (MBI), Radian Group (RDN) and MGIC Investment Corp. (MTG) were up anywhere from 5-18%. The smart money is already in, against the banks and on the insurers.
At issue are mortgages made and securities issued between 2005 and 2007, which were mostly securitized and sold by the Big Four banks. Many of the loans have already defaulted and are being put back to the banks, with litigation ramping up.
As for overall market reaction, stocks were down hard on the day on news that PPI increase 0.4% in September and new unemployment claims ramped up to 462,000, but is probably more like 475,000, as the BLS routinely understates these numbers and upwardly revises them the following week.
The Dow was down by as many as 72 points before the interventionists took aim at the unchanged line at 3:00 - their usual "happy hour" - and almost got there, perhaps leaving all of the indices in the red as a signal to those in the know that the massive sell-off was set to kick into high gear beginning Friday.
A market decline prior to the election is clearly in the cards as a message for Tea partiers and Republicans to carry into the elections as a repudiation of Democrat party policies. in case nobody noticed, equity options expire tomorrow, and the usual out-of-the-blue rally has gone missing.
Stocks are about to become very cheap, very soon, as a crash is well set-up by Fed pumping liquidity and enormous denial of reality on the part of the entire Wall Street scum crowd.
The Fed's QE2, attempting to "reduce disinflation," targeting a 2% inflation rate and an additional 0.5 to 1.0% improvement in GDP, is exactly backwards at this point. To say they are "pushing on a string" is like saying your son's high school football team has a good chance of beating the Baltimore Ravens.
The Fed will attempt to influence the economy by timed purchases of Treasuries and more bad paper in the MBS universe. They're going to get stuck with a load of bad paper which hopefully will cause their utter and complete collapse. Since the Fed is one of the major causes of financial pain in this country, it's about time they meet their maker and go the way of buggy whips, typewriters and people who think the banks are a good buy. Planning to purchase as much as $1.5 trillion of paper over the next 6-12 months isn't even going to raise an eyebrow on the slumbering economy. They'd need $20 trillion to unwind the mess the banks have created and continue to deny. It's OVER. Bank of America, Wells Fargo and Citigroup will FAIL. JP Morgan Chase may survive, as they hold a special place in American finance, but they will be impaired for many years.
Dow 11,094.57, -1.51 (0.01%)
NASDAQ 2,435.38, -5.85 (0.24%)
S&P 500 1,173.81, -4.29 (0.36%)
NYSE Composite 7,546.59, -14.91 (0.20%)
NASDAQ Volume 2,026,980,750.00
NYSE Volume 5,962,782,000
Declining issues outpaced advancers, 3706-2738, but new highs remained in favor over new lows, 610-58. Volume was slightly improved, but only because the volume on the bank stocks was so unusually high (about 4.5X normal on BAC and WFC alone).
In anticipation of the deflationary depression the United States is about to enter, oil backed off 32 cents, to $82.69. The alternative currency play in the precious metals remained very much alive, with gold hiher by $7.10, to $1,377.60. Silver was higher by another 50 cents, to $24.44, capping a 25% move from the beginning of September.
Make no bones about it, the US is heading right over the cliff. Whether anybody recognizes the fact or the media gives credence to it before the elections or before Christmas is just a matter of how well the power players in government can keep it under wraps. But it's here, and it's going to hurt for a very long time.
Proof was in the activity of the stocks that appear poised to take what amounts to a knockout blow: JP Morgan Chase (JPM), Citigroup (C), Wells Fargo (WFC) and the granddaddy of them all, Bank of America (BAC). Shares of these banks, which are the servicers of vast numbers of mortgages, many already in default or foreclosure, fell by 5-6% on the day.
On the other side of the sell-off are the monoline insurers, those companies which will gain from tranches of mortgages securities being "put back" to the banks as investors seek to be compensated and made whole at par for non-performing securities. Such entities such as AMBAC (ABK), MBIA (MBI), Radian Group (RDN) and MGIC Investment Corp. (MTG) were up anywhere from 5-18%. The smart money is already in, against the banks and on the insurers.
At issue are mortgages made and securities issued between 2005 and 2007, which were mostly securitized and sold by the Big Four banks. Many of the loans have already defaulted and are being put back to the banks, with litigation ramping up.
As for overall market reaction, stocks were down hard on the day on news that PPI increase 0.4% in September and new unemployment claims ramped up to 462,000, but is probably more like 475,000, as the BLS routinely understates these numbers and upwardly revises them the following week.
The Dow was down by as many as 72 points before the interventionists took aim at the unchanged line at 3:00 - their usual "happy hour" - and almost got there, perhaps leaving all of the indices in the red as a signal to those in the know that the massive sell-off was set to kick into high gear beginning Friday.
A market decline prior to the election is clearly in the cards as a message for Tea partiers and Republicans to carry into the elections as a repudiation of Democrat party policies. in case nobody noticed, equity options expire tomorrow, and the usual out-of-the-blue rally has gone missing.
Stocks are about to become very cheap, very soon, as a crash is well set-up by Fed pumping liquidity and enormous denial of reality on the part of the entire Wall Street scum crowd.
The Fed's QE2, attempting to "reduce disinflation," targeting a 2% inflation rate and an additional 0.5 to 1.0% improvement in GDP, is exactly backwards at this point. To say they are "pushing on a string" is like saying your son's high school football team has a good chance of beating the Baltimore Ravens.
The Fed will attempt to influence the economy by timed purchases of Treasuries and more bad paper in the MBS universe. They're going to get stuck with a load of bad paper which hopefully will cause their utter and complete collapse. Since the Fed is one of the major causes of financial pain in this country, it's about time they meet their maker and go the way of buggy whips, typewriters and people who think the banks are a good buy. Planning to purchase as much as $1.5 trillion of paper over the next 6-12 months isn't even going to raise an eyebrow on the slumbering economy. They'd need $20 trillion to unwind the mess the banks have created and continue to deny. It's OVER. Bank of America, Wells Fargo and Citigroup will FAIL. JP Morgan Chase may survive, as they hold a special place in American finance, but they will be impaired for many years.
Dow 11,094.57, -1.51 (0.01%)
NASDAQ 2,435.38, -5.85 (0.24%)
S&P 500 1,173.81, -4.29 (0.36%)
NYSE Composite 7,546.59, -14.91 (0.20%)
NASDAQ Volume 2,026,980,750.00
NYSE Volume 5,962,782,000
Declining issues outpaced advancers, 3706-2738, but new highs remained in favor over new lows, 610-58. Volume was slightly improved, but only because the volume on the bank stocks was so unusually high (about 4.5X normal on BAC and WFC alone).
In anticipation of the deflationary depression the United States is about to enter, oil backed off 32 cents, to $82.69. The alternative currency play in the precious metals remained very much alive, with gold hiher by $7.10, to $1,377.60. Silver was higher by another 50 cents, to $24.44, capping a 25% move from the beginning of September.
Make no bones about it, the US is heading right over the cliff. Whether anybody recognizes the fact or the media gives credence to it before the elections or before Christmas is just a matter of how well the power players in government can keep it under wraps. But it's here, and it's going to hurt for a very long time.
Wednesday, October 13, 2010
Foreclosure-Gate Goes Full Monte; Stocks Soar!
Our stock markets have officially reached escape velocity today and have become permanently detached from reality.
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
Tuesday, October 12, 2010
ForeclosureGate Harming All Markets?
Very busy on a number of matters here today, so, I'll apologize for the brevity of this post in advance.
The ongoing saga of residential real estate in the USA just continues to escalate. While more in the banking and investment community are saying a nationwide moratorium on foreclosures would be very damaging to the economy, voices on the other side of the debate, many calling for a complete halt to foreclosures and evictions, are expressing the concern that such a national stop and reset would be the proper first step toward fixing the very sick residential real estate market.
The problem is that real estate is a huge part of GDP and post-foreclosure sales of bank REO properties have been making up 25% of the total for some time now. Stopping the flow is going to have a material effect on GDP. Shutting down foreclosures and sales will throw us right back into recession, almost without a doubt.
Even as it is, without a national moratorium, hundreds of thousands of foreclosures are already in no-go mode and state Attorneys General are ramping up efforts to investigate, the latest being NY AG Andrews Cuomo - incidentally running for governor - who is calling on the four biggest lenders, Ally (GMAC), Chase, Bank of America and Wells Fargo to immediately halt all foreclosures, which - news to the AG - all but Wells Fargo have already done.
Further, 40 state AGs are due to announce (possibly as early as tonight) a joint task force to look into "robo-signing" and other allegations of fraud and abuse by the mortgage servicers.
All of this confusion will lead to a frozen real estate market. Anecdotal stories of short sales halted and prospective buyers preferring to "wait and see" are contributing to grind the already-maligned real estate business to a complete halt, and it seems to be spilling over into other markets, particularly stocks, which essentially treaded water for the second straight day.
Dow 11,020.40, +10.06 (0.09%)
NASDAQ 2,417.92, +15.59 (0.65%)
S&P 500 1,169.77, +4.45 (0.38%)
NYSE Composite 7,489.62, +10.61 (0.14%)
Advancers beat decliners, 3259-2433. New highs: 394; New lows: 36. Volume was improved from Monday's holiday-held-back level.
NASDAQ Volume 1,984,735,250
NYSE Volume 4,233,061,500
Oil dropped 54 cents, to $81.67, heading back to the security of the $75-80 level. Gold lost $7.70, to $1,346.70, while silver slipped 20 cents, to $23.15.
The ongoing saga of residential real estate in the USA just continues to escalate. While more in the banking and investment community are saying a nationwide moratorium on foreclosures would be very damaging to the economy, voices on the other side of the debate, many calling for a complete halt to foreclosures and evictions, are expressing the concern that such a national stop and reset would be the proper first step toward fixing the very sick residential real estate market.
The problem is that real estate is a huge part of GDP and post-foreclosure sales of bank REO properties have been making up 25% of the total for some time now. Stopping the flow is going to have a material effect on GDP. Shutting down foreclosures and sales will throw us right back into recession, almost without a doubt.
Even as it is, without a national moratorium, hundreds of thousands of foreclosures are already in no-go mode and state Attorneys General are ramping up efforts to investigate, the latest being NY AG Andrews Cuomo - incidentally running for governor - who is calling on the four biggest lenders, Ally (GMAC), Chase, Bank of America and Wells Fargo to immediately halt all foreclosures, which - news to the AG - all but Wells Fargo have already done.
Further, 40 state AGs are due to announce (possibly as early as tonight) a joint task force to look into "robo-signing" and other allegations of fraud and abuse by the mortgage servicers.
All of this confusion will lead to a frozen real estate market. Anecdotal stories of short sales halted and prospective buyers preferring to "wait and see" are contributing to grind the already-maligned real estate business to a complete halt, and it seems to be spilling over into other markets, particularly stocks, which essentially treaded water for the second straight day.
Dow 11,020.40, +10.06 (0.09%)
NASDAQ 2,417.92, +15.59 (0.65%)
S&P 500 1,169.77, +4.45 (0.38%)
NYSE Composite 7,489.62, +10.61 (0.14%)
Advancers beat decliners, 3259-2433. New highs: 394; New lows: 36. Volume was improved from Monday's holiday-held-back level.
NASDAQ Volume 1,984,735,250
NYSE Volume 4,233,061,500
Oil dropped 54 cents, to $81.67, heading back to the security of the $75-80 level. Gold lost $7.70, to $1,346.70, while silver slipped 20 cents, to $23.15.
Monday, October 11, 2010
How Far Does the Fraud Have to Go?
Here's a case out of Fairfax County, Virginia, in which Bank of America is re-instituted as a defendant on a case involving fraudulent appraisals, overpriced lots and a judge who's apparently just seen the light. The total amount, in a back-of-the-envelope calculation is upwards of $40 million.
This is just one case. There are hundreds, if not thousands more involving the biggest banks in the nation, the ones which were bailed out and the same ones Attorney general Eric Holder refuses to investigate thoroughly and bring cases against.
Holder is indeed a withholder of justice for the American people. He is not performing his sworn duty as an appointed key official of this administration. Eric Holder must be held to account for his actions and inactions in not only the banking system but in the BP oil spill debacle as well.
This is just one case. There are hundreds, if not thousands more involving the biggest banks in the nation, the ones which were bailed out and the same ones Attorney general Eric Holder refuses to investigate thoroughly and bring cases against.
Holder is indeed a withholder of justice for the American people. He is not performing his sworn duty as an appointed key official of this administration. Eric Holder must be held to account for his actions and inactions in not only the banking system but in the BP oil spill debacle as well.
Subscribe to:
Posts (Atom)
Posts
