For those not in the know, ZIRP stands for Zero Interest Rate Policy, the policy which the FOMC of the Federal Reserve reiterated again today, ensuring that the federal funds rate will remain at zero at least until March 15, the date of their next meeting, unless some exogenous event - unlikely - forces their hand in the interim.
The zero per cent federal funds rate obviously applies to banks only, those borrowing from the Federal Reserve. Sadly, you and I cannot receive such largesse. Were that the case, the conditions under which most Americans suffer - high debt and high rates - would be greatly alleviated.
Alas, that is not the mandate of the Fed, however. Their goal is - despite what they or their slaves in congress might tell us - to nuke the toxic assets and malinvestments made by the big national banks into some far away wasteland, never to be heard of or seen again. The problem is that the banks are not happy with the condition. They wish to have their cake and eat it too. Not only have they been made whole for their subprime scandals and toxic mortgage mistakes by the Fed, but they continue to hold onto these assets as though they are magic candy, sending out delinquency notices and foreclosing on families who cannot meet their demands for payment.
Would the banks simply stop playing their charade on the American public and just take the losses as they should, our economy could get moving again and interest rates would rise to some acceptable level - maybe three to four per cent - where everybody would be happy. Of course, that would necessitate some degree of pain to the likes of Citigroup, JP Morgan Chase and the rotten Bank of America (could they please change their name? It makes all of us US citizens look bad.) and that would simply not be acceptable.
This two-year old Fed policy of zero per cent interest on federal funds has been a complete failure. The economy continues to limp along, though money flows freely to Wall Street and the banks, on a daily, regular basis. Meanwhile, real unemployment remains at 18-20% (Great Depression levels), the federal government continues to run extraordinary deficits ($1.5 trillion for fiscal 2011), and homes remain unaffordable to the majority of Americans. If the banks would write down and write off their bad loans, the real estate market would crash, making homes more affordable than ever.
But it won't happen. Not with a nitwit in the White House and a gaggle of othr equally worthless politicians demanding the status quo remain in play. No banks go down, which means no growth in the economy.
So be it.
We've had ZIRP since December 2008, and will have it for the rest of his year, probably. The Fed has long ago run out of good ideas with which to fix a broken economy. Now would be a good time to abolish it.
Dow 11,985.44, +8.25 (0.07%)
NASDAQ 2,739.50, +20.25 (0.74%)
S&P 500 1,296.63, +5.45 (0.42%)
NYSE Composite 8,193.64, +52.51 (0.64%)
Advancers finished well ahead of declining issues, 4128-1605. On the NASDAQ, there were 160 new highs and just 13 new lows. The numbers on the NYSE were similar, 241-11. Volume was just a tad better on the NASDAQ. The NYSE might just as well have been closed. The Dow punctured the 12,000 mark, but couldn't hold it; party hats were deferred until another day.
NASDAQ Volume 2,047,729,500
NYSE Volume 4,812,036,000
The new March front end oil contract got bid up $1.14, to $87.33, a price that is largely unsustainable. NYMEX crude should be sitting at $70 or less per barrel. Anything above that acts as a tax on consumers and slows the economy further. Gold was actually higher, though only by 70 cents, to $1,333.00. Silver gained 32 cents, to $27.13, and seems to be stabilizing along with gold at these levels.
The Fed says there's no inflation (except for food and fuel). Obviously, they live in a different world than ours, where one neither has to eat, stay warm or drive a car. No wonder they're keeping interest rates at ZERO. It matches their collective IQ.
Wednesday, January 26, 2011
Tuesday, January 25, 2011
Stick Save, and a Beauty!
The US stock markets are such a massive fraud. Not that other stock markets aren't, I simply don't know them well enough, though I can take a measured guess that there's some degree of flipidation or flamenomics in play. After all, these stock marketeers are all tied in with the TBTF banks in their own countries.
So what if the entire global banking system is just a huge fraud played upon the middle and lower classes by an elite upper class? Well, we would expect high prices, shoddy service, broken promises, an unsustainable drain from the most productive class element, working people. Were that not enough, the banks in America have brought us much more, as in blatant fraud, bailouts with taxpayer money, record bonuses for executives, voodoo accounting by which they artificially inflate their own earnings, all the time while they are technically insolvent.
Well, then what?
That would be a government overthrown in Tunesia, the nation of Iceland already defaulted, riots in Egypt and Ireland about to go ballistic, insurance companies suing banks, banks walking away from houses they don't want to own, states and municipalities suffering from reduced tax revenues, investigations into pension funds (though like all investigations conducted by government agencies, the result is usually negligible and never is any individual held civilly or criminally culpable), outlandish, never-before-seen federal deficits, an interest rate permanently plugged at ZERO, and a myriad of other social developments such as tent cities, rising bank robberies, wider social distress and general disagreement with government policies.
There isn't room in the blogosphere to represent the kind of damage being done by the Federal Reserve and Chinese central bank's endless money and credit creation (same thing), but the stock markets, supposedly acting as a barometer measuring corporate strength - while falsely implying that America is somehow better for this - are absurdly manipulated, controlled and corrupted.
Today's action is a pure case of intraday manipulation. Let's forget the past two paragraphs for a moment. They're there, they're real, but they apparently don't matter to stocks, because, if they did, stocks would not have staged the dramatic recovery it did today, most of it in the last fifteen minutes of trading.
Just for the record, at the lows for the day, the Dow was down more than 80 points, the S&P was off 10, the NASDAQ down 23. Now, look at the close. The only things that changed were the prices of these "securities." The lows of the day were met around 2:30 - 3:00 pm. In the final hour of trading, stocks went straight up.
The news of the day, in fact, was largely negative. The Case-Shiller index of residential home prices fell for the fifth consecutive month.
Dow 11,977.19, -3.33 (0.03%)
NASDAQ 2,719.25, +1.70 (0.06%)
S&P 500 1,291.18, +0.34 (0.03%)
NYSE Composite 8,141.13, -16.29 (0.20%)
3308 stocks fell; 3193 gained. On the NASDAQ, there were 63 new highs and 23 new lows, the gap compressing once again. The NYSE had 103 new highs; 18 new lows. Volume... well, same old story.
NASDAQ Volume 1,949,290,625.00
NYSE Volume 5,169,361,500
Commodities really complete the story. Consider all that's been reported here in the last few paragraphs. It's all real. Would anyone in their right mind believe that this is an environment ripe for inflation. There are 15 million working-age Americans out of work. 43 million Americans are on food stamps. The Fed will have to print maybe another $10 trillion, maybe more, over the next three years to keep the carousel turning. It's simply not going to happen, or, if it does, will end in disaster.
But the commodity trade over the past week has been flashing those same old deflationary signals again, all on the backs of oversupply and slack demand. Americans, and to a large extent, the populations of other nations, are being squeezed, and their ability to continue to grease the skids of commerce is waning.
Crude was off again, down $1.68, to $86.19, a two-month low. Gold continued what is now a full-blown exodus, losing $12.20, to $1,332.30. Silver fell 52 cents, to $26.80. energy and food also fell, nearly across the board. There's more than enough of everything. So why are we paying through the nose for it?
Everything will follow home prices. Everything, because if the value of a roof over one's head is discounted, then what, really what, has any value?
Price discovery will eventually set free all assets to their rightful holders.
So what if the entire global banking system is just a huge fraud played upon the middle and lower classes by an elite upper class? Well, we would expect high prices, shoddy service, broken promises, an unsustainable drain from the most productive class element, working people. Were that not enough, the banks in America have brought us much more, as in blatant fraud, bailouts with taxpayer money, record bonuses for executives, voodoo accounting by which they artificially inflate their own earnings, all the time while they are technically insolvent.
Well, then what?
That would be a government overthrown in Tunesia, the nation of Iceland already defaulted, riots in Egypt and Ireland about to go ballistic, insurance companies suing banks, banks walking away from houses they don't want to own, states and municipalities suffering from reduced tax revenues, investigations into pension funds (though like all investigations conducted by government agencies, the result is usually negligible and never is any individual held civilly or criminally culpable), outlandish, never-before-seen federal deficits, an interest rate permanently plugged at ZERO, and a myriad of other social developments such as tent cities, rising bank robberies, wider social distress and general disagreement with government policies.
There isn't room in the blogosphere to represent the kind of damage being done by the Federal Reserve and Chinese central bank's endless money and credit creation (same thing), but the stock markets, supposedly acting as a barometer measuring corporate strength - while falsely implying that America is somehow better for this - are absurdly manipulated, controlled and corrupted.
Today's action is a pure case of intraday manipulation. Let's forget the past two paragraphs for a moment. They're there, they're real, but they apparently don't matter to stocks, because, if they did, stocks would not have staged the dramatic recovery it did today, most of it in the last fifteen minutes of trading.
Just for the record, at the lows for the day, the Dow was down more than 80 points, the S&P was off 10, the NASDAQ down 23. Now, look at the close. The only things that changed were the prices of these "securities." The lows of the day were met around 2:30 - 3:00 pm. In the final hour of trading, stocks went straight up.
The news of the day, in fact, was largely negative. The Case-Shiller index of residential home prices fell for the fifth consecutive month.
Dow 11,977.19, -3.33 (0.03%)
NASDAQ 2,719.25, +1.70 (0.06%)
S&P 500 1,291.18, +0.34 (0.03%)
NYSE Composite 8,141.13, -16.29 (0.20%)
3308 stocks fell; 3193 gained. On the NASDAQ, there were 63 new highs and 23 new lows, the gap compressing once again. The NYSE had 103 new highs; 18 new lows. Volume... well, same old story.
NASDAQ Volume 1,949,290,625.00
NYSE Volume 5,169,361,500
Commodities really complete the story. Consider all that's been reported here in the last few paragraphs. It's all real. Would anyone in their right mind believe that this is an environment ripe for inflation. There are 15 million working-age Americans out of work. 43 million Americans are on food stamps. The Fed will have to print maybe another $10 trillion, maybe more, over the next three years to keep the carousel turning. It's simply not going to happen, or, if it does, will end in disaster.
But the commodity trade over the past week has been flashing those same old deflationary signals again, all on the backs of oversupply and slack demand. Americans, and to a large extent, the populations of other nations, are being squeezed, and their ability to continue to grease the skids of commerce is waning.
Crude was off again, down $1.68, to $86.19, a two-month low. Gold continued what is now a full-blown exodus, losing $12.20, to $1,332.30. Silver fell 52 cents, to $26.80. energy and food also fell, nearly across the board. There's more than enough of everything. So why are we paying through the nose for it?
Everything will follow home prices. Everything, because if the value of a roof over one's head is discounted, then what, really what, has any value?
Price discovery will eventually set free all assets to their rightful holders.
Monday, January 24, 2011
Being Wrong for so Long Might Be Right
Just as the financial sentiment seemed to be turning, the Fed POMO'd another $8.8 billion today (who's counting, anyway?) to launch the markets off into the stratosphere.
There will be no correction for the time being, as I've been calling for, as this is not a rational market. Nor is this a free market, or a trusted market; it is a Ponzi market, underwritten by taxpayer dollars via the Federal Reserve, which buys bonds from the Treasury.
I've been out of stocks since July of 2007. I missed the collapse and am now missing the huge comeback, but I'm not concerned. There are other, safer places to hide/invest than in semi-worthless pieces of paper.
For those not yet convinced, today was a bright one. Equities were up smartly at the open and continued to pile on gains throughout the day. All the big money was putting down markers, via options, for the next ramp up, due before February 18. Then they will stage a sell-off, rinse and repeat. It's how things work when a few insiders control 90% of the 70% of trades done by machines and the Fed keeps handing them monopoly money to facilitate more trading.
So be it. Or not (my Murphy's Law sense tells me that the moment I relent, the collapse will occur).
Dow 11,980.52 108.68 (0.92%)
NASDAQ 2,717.55 28.01 (1.04%)
S&P 500 1,290.84 7.49 (0.58%)
NYSE Compos 8,157.42 51.67 (0.64%)
Advancers decimated decliners, 4454-2089. On the NASDAQ, there were 81 new highs and 18 new lows. On the NYSE, 130 new highs and 17 new lows. Despite the apparent panic buying of equities, volume was again mysteriously missing, as were avid day-traders (the approach now being pushed by none other than nationally-syndicated political talk-show host and self-appointed "Great American," Bill Cunningham. I rest my case.
NASDAQ Volume 1,926,345,875
NYSE Volume 4,484,331,500
Amazingly, crude oil didn't pop off another couple of bucks along with the market. Instead, crude futures were sold off by $1.24, to finish at $87.87, the lowest price since early December. Gold also had no luck catching much of a bid, as stories of a gold bubble are rampant within the mainstream media. Gold did finish marginally higher, up $3.50, to $1,344.50, though there's a feeling that the selling isn't over with just yet.
On a brighter note for gold-bugs, there is growing concern that there's far too much "paper" gold in vehicles like the GLD and other derivatives, which far outstrip the actual metal on hand and deliveries are being delayed or bought out at premium. The same, to a lesser extent, applies to silver, which fell another 11 cents, to $27.32, though it was much lower midday.
That's all for now.
There will be no correction for the time being, as I've been calling for, as this is not a rational market. Nor is this a free market, or a trusted market; it is a Ponzi market, underwritten by taxpayer dollars via the Federal Reserve, which buys bonds from the Treasury.
I've been out of stocks since July of 2007. I missed the collapse and am now missing the huge comeback, but I'm not concerned. There are other, safer places to hide/invest than in semi-worthless pieces of paper.
For those not yet convinced, today was a bright one. Equities were up smartly at the open and continued to pile on gains throughout the day. All the big money was putting down markers, via options, for the next ramp up, due before February 18. Then they will stage a sell-off, rinse and repeat. It's how things work when a few insiders control 90% of the 70% of trades done by machines and the Fed keeps handing them monopoly money to facilitate more trading.
So be it. Or not (my Murphy's Law sense tells me that the moment I relent, the collapse will occur).
Dow 11,980.52 108.68 (0.92%)
NASDAQ 2,717.55 28.01 (1.04%)
S&P 500 1,290.84 7.49 (0.58%)
NYSE Compos 8,157.42 51.67 (0.64%)
Advancers decimated decliners, 4454-2089. On the NASDAQ, there were 81 new highs and 18 new lows. On the NYSE, 130 new highs and 17 new lows. Despite the apparent panic buying of equities, volume was again mysteriously missing, as were avid day-traders (the approach now being pushed by none other than nationally-syndicated political talk-show host and self-appointed "Great American," Bill Cunningham. I rest my case.
NASDAQ Volume 1,926,345,875
NYSE Volume 4,484,331,500
Amazingly, crude oil didn't pop off another couple of bucks along with the market. Instead, crude futures were sold off by $1.24, to finish at $87.87, the lowest price since early December. Gold also had no luck catching much of a bid, as stories of a gold bubble are rampant within the mainstream media. Gold did finish marginally higher, up $3.50, to $1,344.50, though there's a feeling that the selling isn't over with just yet.
On a brighter note for gold-bugs, there is growing concern that there's far too much "paper" gold in vehicles like the GLD and other derivatives, which far outstrip the actual metal on hand and deliveries are being delayed or bought out at premium. The same, to a lesser extent, applies to silver, which fell another 11 cents, to $27.32, though it was much lower midday.
That's all for now.
Friday, January 21, 2011
A Day of Little Consequence
Besides GE beating 4th quarter estimates soundly and Bank of America missing badly (though the mainstream media call the earnings nember "confusing"), it was a pretty dull session.
Dow 11,871.84, +49.04 (0.41%)
NASDAQ 2,689.54, -14.75 (0.55%)
S&P 500 1,283.35, +3.09 (0.24%)
NYSE Composite 8,105.75, +29.03 (0.36%)
NASDAQ Volume 1,936,012,000.00
NYSE Volume 5,191,208,500
Declining issues held a 3321-3166 advantage over advancers. NASDAQ, the only major index to finish lower, recorded 53 new highs and 23 new lows. The numbers were 77 and 12 on the NYSE, respectively.
Oil dropped 48 cents, to $89.11. Gold continued an extended decline, losing $5.50, to $1,341.00. Silver fell 5 cents, to $27.43. All trends seem to remain in place for a top and correction, soon.
Americans continue to decline in education, living standards and general decency. These trends can be reversed, though it takes work, another thing seemingly in decline in the USA.
Dow 11,871.84, +49.04 (0.41%)
NASDAQ 2,689.54, -14.75 (0.55%)
S&P 500 1,283.35, +3.09 (0.24%)
NYSE Composite 8,105.75, +29.03 (0.36%)
NASDAQ Volume 1,936,012,000.00
NYSE Volume 5,191,208,500
Declining issues held a 3321-3166 advantage over advancers. NASDAQ, the only major index to finish lower, recorded 53 new highs and 23 new lows. The numbers were 77 and 12 on the NYSE, respectively.
Oil dropped 48 cents, to $89.11. Gold continued an extended decline, losing $5.50, to $1,341.00. Silver fell 5 cents, to $27.43. All trends seem to remain in place for a top and correction, soon.
Americans continue to decline in education, living standards and general decency. These trends can be reversed, though it takes work, another thing seemingly in decline in the USA.
Thursday, January 20, 2011
Another Dip for Equity Speculators
As we've heard from countless pundits and analysts, stocks are cheap and headed higher in 2011.
The market, however, and continued unemployment and rising homelessness, tell us that American consumers are all but tapped out and seething over higher fuel and now, food prices. Ben Bernanke's great experiment with QE2, now well into its third month, continues to shovel money at the Primary Dealers, who, in turn, speculate and control the stock markets.
When they wish to sell, they do. When they desire gains, they simply hit the "BUY" button and spend the money the Fed has lavished upon them, which is why today's decline was simply wiped away and turned into a smallish dip. The speculators have all of their bets covered and will crush anybody, short or long, standing in the line of fire.
Stocks were getting creamed earlier in the day before the pretenders of recovery decided to give the market a little boost with some controlled buying. The Dow was down as much as 80 points before recovering into the close with only a small loss, though little could be done to stem the tide against Apple and other tech stocks on the NASDAQ, which suffered through another drubbing, the second in as many days. The NASDAQ, probably the most inflated of the major indices, has lost 62 points over the course of the last two sessions, but that's only the very beginning of what appears to be a massive exodus from high-flying tech names, since the index is up more than 600 points since September, 2010.
Dow 11,822.80, -2.49 (0.02%)
NASDAQ 2,704.29, -21.07 (0.77%)
S&P 500 1,280.26, -1.66 (0.13%)
NYSE Composite 8,076.72, -28.20 (0.35%)
Despite the marginal losses overall, especially on the Dow and S&P, the A/D line told a more sinister story. Declining issues beat back advancers by better than a 2:1 margin. Losers beat winners, 4359-2107. On The NASDAQ, there were 36 new highs to 22 new lows, the convergence now notable and significant of a major turning point. On the NYSE, new highs held sway over new lows, 44-24, also close to doing a complete reversal. Volume picked up again today, marking the best of the week, which is bad news for holders of stocks, generally.
NASDAQ Volume 2,277,221,500.00
NYSE Volume 5,579,977,500
What moved markets and commodities on the day was a set of data points out of China, where inflation is running at a 4.6% rate (probably higher) and the government is under increasing pressure to keep a lid on rising food prices. Unlike in the USA, where higher prices for things we put in our bodies is simply a sign of "recovery" and passed along to the consumer, in China people have a tendency to get a little bit crazier when they are facing wholesale starvation. If China doesn't clamp down hard on rising prices, there will be riots and military movements inside the Great Wall.
Commodities reacted strongly to China's inflation data, as they should have. Oil moved lower by $2.00, to $88.86, its lowest level in two weeks. Gold was pounded lower by $23.70, to $1,346.50, a two-month low, but likely only a temporary setback. Silver was punished mercilessly, losing more than 4.5%, down $1.33, to $27.47. Surely, the gold and silver trade is once again in the hands of the major world banking interests, who are resolute - though highly unsuccessful - in keeping prices of the precious metals down. But they will on occasion carry the day, or week, though for the multitude of investors who swear by gold and silver, these continued declines appear as buying opportunities.
Friday marks option expiration for a multitude of stocks and that derivative market will influce trading on the final session of the week. Monday now appears as the best possible continuation of the down-trend.
The market, however, and continued unemployment and rising homelessness, tell us that American consumers are all but tapped out and seething over higher fuel and now, food prices. Ben Bernanke's great experiment with QE2, now well into its third month, continues to shovel money at the Primary Dealers, who, in turn, speculate and control the stock markets.
When they wish to sell, they do. When they desire gains, they simply hit the "BUY" button and spend the money the Fed has lavished upon them, which is why today's decline was simply wiped away and turned into a smallish dip. The speculators have all of their bets covered and will crush anybody, short or long, standing in the line of fire.
Stocks were getting creamed earlier in the day before the pretenders of recovery decided to give the market a little boost with some controlled buying. The Dow was down as much as 80 points before recovering into the close with only a small loss, though little could be done to stem the tide against Apple and other tech stocks on the NASDAQ, which suffered through another drubbing, the second in as many days. The NASDAQ, probably the most inflated of the major indices, has lost 62 points over the course of the last two sessions, but that's only the very beginning of what appears to be a massive exodus from high-flying tech names, since the index is up more than 600 points since September, 2010.
Dow 11,822.80, -2.49 (0.02%)
NASDAQ 2,704.29, -21.07 (0.77%)
S&P 500 1,280.26, -1.66 (0.13%)
NYSE Composite 8,076.72, -28.20 (0.35%)
Despite the marginal losses overall, especially on the Dow and S&P, the A/D line told a more sinister story. Declining issues beat back advancers by better than a 2:1 margin. Losers beat winners, 4359-2107. On The NASDAQ, there were 36 new highs to 22 new lows, the convergence now notable and significant of a major turning point. On the NYSE, new highs held sway over new lows, 44-24, also close to doing a complete reversal. Volume picked up again today, marking the best of the week, which is bad news for holders of stocks, generally.
NASDAQ Volume 2,277,221,500.00
NYSE Volume 5,579,977,500
What moved markets and commodities on the day was a set of data points out of China, where inflation is running at a 4.6% rate (probably higher) and the government is under increasing pressure to keep a lid on rising food prices. Unlike in the USA, where higher prices for things we put in our bodies is simply a sign of "recovery" and passed along to the consumer, in China people have a tendency to get a little bit crazier when they are facing wholesale starvation. If China doesn't clamp down hard on rising prices, there will be riots and military movements inside the Great Wall.
Commodities reacted strongly to China's inflation data, as they should have. Oil moved lower by $2.00, to $88.86, its lowest level in two weeks. Gold was pounded lower by $23.70, to $1,346.50, a two-month low, but likely only a temporary setback. Silver was punished mercilessly, losing more than 4.5%, down $1.33, to $27.47. Surely, the gold and silver trade is once again in the hands of the major world banking interests, who are resolute - though highly unsuccessful - in keeping prices of the precious metals down. But they will on occasion carry the day, or week, though for the multitude of investors who swear by gold and silver, these continued declines appear as buying opportunities.
Friday marks option expiration for a multitude of stocks and that derivative market will influce trading on the final session of the week. Monday now appears as the best possible continuation of the down-trend.
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