After last week's mini-correction - which is probably the worst decline we'll see for a while - stocks and the Fed are back on track, pumping newly-created POMO dollars into the system for the banking crooks to parlay into stocks. Up, up and away!
According to the Fed's published schedule of monetary injections, today was slated for $6-8 billion in outright coupon purchases. In other words, the Fed is buying back bonds from the Primary Dealers which were purchased just a few weeks ago, presumably at a loss, a small loss, but, nevertheless, a loss, so that the banks will remain willing participants to the Zimbabwe-ification of the US financial system.
These continued injections have become so commonplace that nobody bothers to report on them or even think about them. For those unfamiliar with the process, let's recap:
Step 1: The US Treasury issues bonds in certain amounts and maturities.
Step 2: Primary Dealers (AKA Too Big To Fail (TBTF) banks) buy the bonds.
Step 3: The Federal Reserve buys the bonds from the TBTF banks.
This is the simple process by which our currency is devalued every day and how the banks are shoring up their horrifically-insolvent balance sheets. While the Fed takes a loss of say, half a billion a day, the banks record the transaction as a profit. Viola! The banks are once again sound. The only problem is that the Fed is holding huge amounts of government debt.
Now, if you've been following carefully, you might question the process. Why bother? Why not just give the banks the money directly from the Federal Reserve, since they have the ability to just create money out of thin air?
Ah, what about the government's obligations? They must issue debt, so the game must continue. The auctions, however, conducted in secrecy, electronically, so that only a few people - ostensibly Fed Chairman Ben Bernanke and Treasury Secretary Tim Geithner - know who's buying what and for how much.
That's a problem, for obvious reasons, and explains, in part, why some people are beginning to think that the entire economy of the United States has already sunk and is being kept afloat by a massive fraud, perpetrated by the Federal Reserve, Treasury Department and the nation's six to eight largest banks (with assistance from European Central banks who are doing pretty much the same thing).
Nobody is buying US government debt. Nobody could be that stupid. The Fed is buying it all, monetizing the debt, smashing down interest rates and destroying the currency. The tiny little secret nobody wishes to speak of is that the rest of the world had better play along or their currencies will be flushed straight into the toilet along with billions of Ben Bernanke Bucks.
Yes, the Federal Reserve is buying all Treasuries issued, cooking their own books and helping out the banks, because, if they don't do it, we'll just have to liquidate those TBTF institutions and Jamie Dimon (our next Treasury Secretary) and his wealthy friends wouldn't like that. Besides, the Fed and the banks and the politicians they control would no longer be able to sway the American public every which way, as they choose.
Think about it. The Chinese stopped buying our debt at least a year ago. They are trying to unload it as fast as they can without causing a panic. Japan is also no longer interested. Reportedly, the UK has been buying scads of the stuff, but they're even more broke than we are, so that's a gigantic canard.
The Fed is buying all, or nearly all, of US debt issuance. We are a self-dealing, Ponzi-fied, Zimbabwe on steroids. There's no doubt about it and there's also no way out. The Fed cannot stop creating money because it just gets more and more worthless every day. It's being spent as quickly as they can put it into circulation, forcing prices higher and higher, inflating everything on the planet - including stocks - in a very devious, vicious cycle all caused by the bankers who imploded the world's economy back in 2008 when they couldn't figure out a way to cover all their bets without all of them failing.
That is when Hank Paulson, then Treasury Secretary, with Ben Bernanke as his willing accomplice, figuratively held a gun to the heads of the President, George W. Bush, and the leaders of congress and demanded $700 billion dollars with no strings attached. It was the crime of the century, committed in broad daylight, in front of hundreds of millions of people worldwide.
Ever since then, all we've gotten for our time and money is a song and dance, orchestrated to keep us all in line and dong the "recovery boogie." It's such an absolute charade, a sham and a complete lie that a lot - and I do mean a lot - of people are coming to the conclusion that it's not working, that we're stuck in this no-jobs, no-growth, high-inflation limbo until the the bar finally falls to earth.
The big holders of mortgage-backed securities are suing the banks with regularity. They want their money back for all the bad securities issued by the banks, backed by mortgages which were written with no other purpose than to have the homeowner default.
Insurance companies suing banks, with the Fed printing money as fast as they possibly can and prices rising globally because of it results in an unsustainable situation. It's already bad, and quickly getting worse. The rest of what suffices for news these days is just for show.
Think about it. In Wisconsin, they're trying to fill a $3 billion void in their budget. Why, the Fed issues twice that amount through their Treasury purchases EVERY DAY! Oil hitting $100 a barrel? All caused by uncontrolled speculation and outright thievery. There's a glut of oil out there and what the big energy companies are really worried about is people rationing their use of gas, taking fewer trips and buying less. with so many people out of work, they have little driving to do, and the oil companies are just trying to remain as richly profitable as they've always been by CHARGING MORE TO FEWER CUSTOMERS.
QE2, the Fed's gambit to restore economic prosperity by issuing more paper money, is slated to end by June. After that, it's anybody's guess, but the path of least resistance - and most sense, from an OMG mentality - would be to continue printing more. There's no economy, tax revenues have fallen off a cliff, and the Fed, because they've chosen to keep insolvent banks operating instead of closing them down, is powerless to do anything but what they've been doing for 2 1/2 years: print, print, print, and when you're done printing, print some more. Hello hyperinflation, followed by an acute depression, the worst ever seen. See you in Hades, Mr. Bernanke, because that's precisely where you and your policies are sending everyone else.
Dow 12,226.34, +95.89 (0.79%)
NASDAQ 2,782.27, +1.22 (0.04%)
S&P 500 1,327.22, +7.34 (0.56%)
NYSE Composite 8,438.55, +60.51 (0.72%)
Advancing issues outpaced decliners, 4051-2535. NASDAQ new highs: 144; new lows: 21. NYSE new highs: 258; new lows: 15. Volume was back down in the doldrums again, so everything is back to normal.
NASDAQ Volume 2,057,503,500
NYSE Volume 4,593,278,500
Oil prices fell again today, down 91 cents, to $96.97, but the damage has been done. Regular unleaded gas is now at a national average of $3.37 per gallon. Seven states are already over $3.45. Want to see a recession created almost overnight. Push ol to $115 a barrel and gas to a national average of $3.75 and see what happens. The protests in Wisconsin will look more like a picnic compared to the mass outrage that induces. Already, people are reconsidering their choices of paying $75-150 a week to get to and from a job that pays them less than $400 a week, taking home $300-340. For many, it's just not worth it any more.
Meanwhile, gold bugs and silver surfers are loving the chaos. Gold was up again today, but only by 60 cents, to $1,409.90. It was as high as $1,416 in earlier trading. Gold is now being pressured downward, or at least held down, for two reasons. First, the banker's know that everyone watches gold as a proxy to fiat currencies, so they are suppressing demand. Second, the very same banks want to hoard it, because they know everyone is right. The global economy is as close to complete meltdown as it was in the fall of 2008.
Silver got all the gains today, up 91 cents (same as the drop in oil, coincidentally), to $33.80. We're unsure whether or not that's a new 30-year high; we only know that $50 per ounce is the number that stopped the Hunt brothers back in 1979-80. When the bubble they created finally burst, Nelson Bunker Hunt, who purportedly lost more than a billion dollars in one day, said, "a billion dollars isn't what it used to be."
And, so, those immortal words, while the Fed pumps billions into an eventual oblivion, ring more true than ever, today.
Monday, February 28, 2011
Friday, February 25, 2011
Short Attention Span Investing
These days, investors have extremely short memories. The Ponzi system that is running - and ruining - Wall Street likes it that way because they can profit from excess trading and wild swings in prices.
Just four days ago, the world seemed to be about to end. Lybia was exploding and the oil we get from the Middle East was about to be cut off. Panic was rampant. Too bad it was all a lie and the big move in oil prices due more to speculation than the madness of kings and monarchs.
The US gets the vast majority of its oil from Canada, Mexico, Nigeria and Venezuela, though Saudi Arabia is third on the list. Lybia isn't even in the Top 15 and Algeria's contribution amounts to more of a rounding error than a vital statistic.
Like the manufactured gasoline shortages of the 70s, the recent oil scare was purely for the entertainment and profit of the privileged class of investors who rig the game and they did just fine, thank you, now having sold their shares at the top and repurchased at a better price, which, of course, they will pimp and pump to the half dozen retail investors remaining solvent until the next "disaster du jour."
Stocks remain overvalued since the few days of decline did little to deflate the current bubble. There's really no good reason to own any equities at all unless you have a vested stake in a certain company's fortunes or can derive a substantial dividend without any risk (impossible).
Gold and silver have sold off a bit as the week dragged on from panic to placidity, though they remain the best investments and nothing that happens between now and the end of time (2012?) will change that. In fact, one need not even tie up money in precious metals. Cash is still useful, as are some of the things it buys, like hard capital goods, machinery, tools, select art and rarities, for which there will always be a market.
In any case, Wall Street saw fit to end the week on a high note, though they didn't exactly make much of a dent in the big declines from Tuesday and Wednesday. Thank goodness it was a short week or it would have likely ended at new highs.
Dow 12,130.45, +61.95 (0.51%)
NASDAQ 2,781.05, +43.15 (1.58%)
S&P 500 1,319.88, +13.78 (1.06%)
NYSE Composite 8,378.04, +101.75 (1.23%)
Winners led losers by an outrageous margin, 5291-1272, confirming the belief that insiders executed a perfect pump-dump and buy on the unsuspecting, foolish public once again. That kind of disparity is usually reserved for days led by stunning positive news, though nowadays any good POMO from the Fed will suffice, apparently. Volume was once again in the sewer, as has been the norm. There is always higher relative volume on sell-offs than on purely positive sessions.
On the NASDAQ, there were 88 new highs and 22 new lows. There were 135 new highs and 12 new lows on the NYSE. Thank you Chairman Comrade Bernanke!
NASDAQ Volume 1,894,895,125
NYSE Volume 4,380,597,000
Crude oil gained 60 cents, to close at $97.88, but was up 9% for the week. Get ready to start pushing your car to work. Gold lost $6.50 in value, to $1,409.30, and silver was down 27 cents, though the recent run has put the price near or at 30-year-highs.
And just in case you don't actually believe the CPI measures inflation properly, here's one man's figures on how much prices are actually rising.
Ah, well, enjoy the weekend. Spring Training is well underway. In fact the World Champion Giants played the Arizona Diamondbacks in the first game today. No results yet, probably because they play in Arizona, where news travels slowly.
Just four days ago, the world seemed to be about to end. Lybia was exploding and the oil we get from the Middle East was about to be cut off. Panic was rampant. Too bad it was all a lie and the big move in oil prices due more to speculation than the madness of kings and monarchs.
The US gets the vast majority of its oil from Canada, Mexico, Nigeria and Venezuela, though Saudi Arabia is third on the list. Lybia isn't even in the Top 15 and Algeria's contribution amounts to more of a rounding error than a vital statistic.
Like the manufactured gasoline shortages of the 70s, the recent oil scare was purely for the entertainment and profit of the privileged class of investors who rig the game and they did just fine, thank you, now having sold their shares at the top and repurchased at a better price, which, of course, they will pimp and pump to the half dozen retail investors remaining solvent until the next "disaster du jour."
Stocks remain overvalued since the few days of decline did little to deflate the current bubble. There's really no good reason to own any equities at all unless you have a vested stake in a certain company's fortunes or can derive a substantial dividend without any risk (impossible).
Gold and silver have sold off a bit as the week dragged on from panic to placidity, though they remain the best investments and nothing that happens between now and the end of time (2012?) will change that. In fact, one need not even tie up money in precious metals. Cash is still useful, as are some of the things it buys, like hard capital goods, machinery, tools, select art and rarities, for which there will always be a market.
In any case, Wall Street saw fit to end the week on a high note, though they didn't exactly make much of a dent in the big declines from Tuesday and Wednesday. Thank goodness it was a short week or it would have likely ended at new highs.
Dow 12,130.45, +61.95 (0.51%)
NASDAQ 2,781.05, +43.15 (1.58%)
S&P 500 1,319.88, +13.78 (1.06%)
NYSE Composite 8,378.04, +101.75 (1.23%)
Winners led losers by an outrageous margin, 5291-1272, confirming the belief that insiders executed a perfect pump-dump and buy on the unsuspecting, foolish public once again. That kind of disparity is usually reserved for days led by stunning positive news, though nowadays any good POMO from the Fed will suffice, apparently. Volume was once again in the sewer, as has been the norm. There is always higher relative volume on sell-offs than on purely positive sessions.
On the NASDAQ, there were 88 new highs and 22 new lows. There were 135 new highs and 12 new lows on the NYSE. Thank you Chairman Comrade Bernanke!
NASDAQ Volume 1,894,895,125
NYSE Volume 4,380,597,000
Crude oil gained 60 cents, to close at $97.88, but was up 9% for the week. Get ready to start pushing your car to work. Gold lost $6.50 in value, to $1,409.30, and silver was down 27 cents, though the recent run has put the price near or at 30-year-highs.
And just in case you don't actually believe the CPI measures inflation properly, here's one man's figures on how much prices are actually rising.
Ah, well, enjoy the weekend. Spring Training is well underway. In fact the World Champion Giants played the Arizona Diamondbacks in the first game today. No results yet, probably because they play in Arizona, where news travels slowly.
Thursday, February 24, 2011
Turnaround Thursday? Well, Almost
The panic in the markets has subsided for now, even though conditions in the Middle East continue to spin out of control, especially in Libya.
Stocks zig-zagged across the flat line on Thursday, with oil pricing higher in early trade. Closing in on 2:00 pm ET, the equity markets were skidding badly again, but, as has become the norm, all of a sudden word spread that President Obama and Treasury Secretary Tim Geithner - neither of whom have a lick of expertise in the oil business - put out the word that there was enough supply of oil in reserve to withstand any kind of disruption, and, just like that, stocks and oil prices quickly reversed course, with oil dropping and stocks rising.
As an aside, gold and silver were slammed to the earth. Just prior to 2:00 pm, the Dow Jones Industrials were off more than 120 points, the NASDAQ dipped 17 points and the S&P 500 has crashed through the 1300 plateau, dropping more than 13 points.
Trading for the remainder of the session involved insiders scooping up shares on the "supposed" cheap. Still, three of the four major averages finished in the red despite the best efforts of the PPT or whatever we're calling the mechanics under the hood of the stock markets.
Dow 12,068.50, -37.28 (0.31%)
NASDAQ 2,737.90, +14.91 (0.55%)
S&P 500 1,306.10, -1.30 (0.10%)
NYSE Composite 8,276.29, -16.63 (0.20%)
Advancers broke a two-day trend and finished ahead of declining issues, 3630-2902. On the NASDAQ, new highs outdid new lows, though narrowly, 49-41. So too on the NYSE, where there were 83 new highs and just 18 new lows. Volume was nce again heightened, though below levels of the past two sessions.
We're clearly at an inflection point in the markets and considering that tensions in the oil-rich area of the world are still at high pitch, a resumption of a little panic may occur at any time, depending on circumstances and how hard the Fed and other officials pump the "all clear" signals. The Arab nations aren't the only ones experiencing a bit of displeasure. Here in the USA, protests continue to mount over budget and public union issues in various states. This chapter in world history is far from over.
NASDAQ Volume 2,112,375,750.00
NYSE Volume 5,799,687,500
The front end futures contract at the NYMEX - which was playing above 100/barrel prior to market opening, actually posted a decline on the day, dropping 82 cents, to $97.28. Gold posted a modest gain in NY trading, but at this writing is trading down $9.60, at $1402.10. Silver was hammered down all day long, down in the NY session and currently sporting a loss of $1.43, at $32.11. The machinery of chicanery is once again vigorously at work in all markets, propping them up with unlimited resources.
While many average working Joes and Janes may take solace in today's turnabout, it comes as yet another shining example of how the financial elite control everything they please, even entire global markets, or so they believe. The realities of life here in the US and elsewhere in the world are not quite as rosy as the oligarchs and politicians would have one believe. Little by little, freedoms are being eroded, and soon, as we're seeing with the assault on public labor unions, they'll take more money from the middle class, calling it "shared pain."
Many with a better handle on things than most are opting out, refusing to play along and suffer what's almost certain to be an eventful future. They are preparing, saving, planning and divesting, growing their own food and buying up precious metals and machinery for the day the wheels come completely off the train of money printing and manipulation.
Stocks zig-zagged across the flat line on Thursday, with oil pricing higher in early trade. Closing in on 2:00 pm ET, the equity markets were skidding badly again, but, as has become the norm, all of a sudden word spread that President Obama and Treasury Secretary Tim Geithner - neither of whom have a lick of expertise in the oil business - put out the word that there was enough supply of oil in reserve to withstand any kind of disruption, and, just like that, stocks and oil prices quickly reversed course, with oil dropping and stocks rising.
As an aside, gold and silver were slammed to the earth. Just prior to 2:00 pm, the Dow Jones Industrials were off more than 120 points, the NASDAQ dipped 17 points and the S&P 500 has crashed through the 1300 plateau, dropping more than 13 points.
Trading for the remainder of the session involved insiders scooping up shares on the "supposed" cheap. Still, three of the four major averages finished in the red despite the best efforts of the PPT or whatever we're calling the mechanics under the hood of the stock markets.
Dow 12,068.50, -37.28 (0.31%)
NASDAQ 2,737.90, +14.91 (0.55%)
S&P 500 1,306.10, -1.30 (0.10%)
NYSE Composite 8,276.29, -16.63 (0.20%)
Advancers broke a two-day trend and finished ahead of declining issues, 3630-2902. On the NASDAQ, new highs outdid new lows, though narrowly, 49-41. So too on the NYSE, where there were 83 new highs and just 18 new lows. Volume was nce again heightened, though below levels of the past two sessions.
We're clearly at an inflection point in the markets and considering that tensions in the oil-rich area of the world are still at high pitch, a resumption of a little panic may occur at any time, depending on circumstances and how hard the Fed and other officials pump the "all clear" signals. The Arab nations aren't the only ones experiencing a bit of displeasure. Here in the USA, protests continue to mount over budget and public union issues in various states. This chapter in world history is far from over.
NASDAQ Volume 2,112,375,750.00
NYSE Volume 5,799,687,500
The front end futures contract at the NYMEX - which was playing above 100/barrel prior to market opening, actually posted a decline on the day, dropping 82 cents, to $97.28. Gold posted a modest gain in NY trading, but at this writing is trading down $9.60, at $1402.10. Silver was hammered down all day long, down in the NY session and currently sporting a loss of $1.43, at $32.11. The machinery of chicanery is once again vigorously at work in all markets, propping them up with unlimited resources.
While many average working Joes and Janes may take solace in today's turnabout, it comes as yet another shining example of how the financial elite control everything they please, even entire global markets, or so they believe. The realities of life here in the US and elsewhere in the world are not quite as rosy as the oligarchs and politicians would have one believe. Little by little, freedoms are being eroded, and soon, as we're seeing with the assault on public labor unions, they'll take more money from the middle class, calling it "shared pain."
Many with a better handle on things than most are opting out, refusing to play along and suffer what's almost certain to be an eventful future. They are preparing, saving, planning and divesting, growing their own food and buying up precious metals and machinery for the day the wheels come completely off the train of money printing and manipulation.
Wednesday, February 23, 2011
Oil Tops $100, Drifts Back; Stocks Hammered Again; Bank Runs in S. Korea
At some point, everyone knew this was going to happen. Stocks were so ridiculously overvalued - and have been for many months - that a pullback was inevitable.
The culprits, it appears, are Middle East sovereign despots, losing their grip on their populations which are largely demanding freedom and a democratic voice. But it goes much deeper. Many blame the Federal Reserve, which has fostered a dual policy of federal funds rates approaching zero while simultaneously printing dollars by the billions.
Those cheap dollars flood the markets, causing speculation and inflation, and that's been particularly acute in the poorest nations, where the percentage of income spent on basic survival - food, housing, clothing - is much higher, approaching 100% and often more. Hungry people being angry people, they've taken to the streets in countries where unemployment and government corruption have outpaced the economy, resulting in popular uprisings.
Add to that the declining value of the dollar, as expressed in the rising price of crude oil, and you have today's recipe for disaster. And all of this comes before the morons in congress and the White House and various state capitols attempt to come to some sort of meeting of the minds on their budgets.
The states have to find ways to balance theirs, while the federals fight over how much spending is enough to keep the government just barely functioning, if at all.
If it feels like the United States is running rudderless on fumes, you get the idea and the nervousness has been manifested in trading the past two days. Despite the usual pumping by the Fed, sellers are out in force and it doesn't take much to move stocks hard to the downside. Missing earnings estimates - normally a sin punishable by a few points off the top - has become a mortal wound, such as what happened to Hewlett Packard (HWP), following their quarterly report, released after the close on Tuesday.
Investors scurried out of the stock on Wednesday, propelling a nearly 10% decline. Vloume was five times normal.
Most of the rest of the market didn't fare much better. Holders of gold and silver are grinning ear-to-ear.
Dow 12,105.78, -107.01 (0.88%)
NASDAQ 2,722.99, -33.43 (1.21%)
S&P 500 1,307.40, -8.04 (0.61%)
NYSE Composite 8,292.92, -32.94 (0.40%)
Decliners led advancing issues again, 4470-2093. On the NASDAQ, the flip: there were 54 new lows and only 44 new highs. At the NYSE, 60 new highs and 27 new lows, though it seems the tide has turned, at least for the present. The question now becomes how long will this downturn last before the hoards of money from the Fed overwhelm all fears and make stocks and risk appear palatable again.
Volume, which hit its best levels of the year on Tuesday, topped that on Wednesday, giving a clue that the selling is only gaining momentum.
NASDAQ Volume 2,498,464,250
NYSE Volume 6,623,988,500
Crude oil - specifically WTI (West Texas Intermediate) on the NYMEX hit $100 in midday trading, but backed off to close up a mere $2.68, at $98.10, marking the highest price seen since 2008. Since the US gets most of its oil from Canada and other Western Hemisphere sources, WTI has fallen well behind the pace in Brent Crude, tied mostly to Europe and Asia. Brent prices topped $110. Spot is quoted at $111.83 per barrel.
Gold had another banner day, rising $12.90, to reach $1,414.00, closing in on all-time highs. Silver continues to be the stellar commodity performer, up another 44 cents, to $33.30. Specialists in gold's cousin say this is nothing and $50 per troy ounce is not only possible before the calendar turns over to 2012, but likely. There simply is not enough physical supply to meet growing investor demands, much of which is causing tightness in industrial applications.
If silver demand continues, look for rising prices in many electronic devices, especially cell phones, though the price rise should not be severe since only small amounts of silver go into the overall manufacturing price.
Turmoil and popular revolt in the Middle East and across many states in America over budget issues and union busting don't exactly set up well for smooth sailing on Wall Street. Until the noise quiets, expect fear to have its way with investor confidence. Nobody wants to catch the proverbial falling knife, and with short interest at record lows, a small tumble could easily turn into an overwhelming cascade.
Meanwhile, silver and gold investors are sitting pretty as the strain on fiat currency is being felt worldwide. What nobody wants to talk about in our civil society are the bank runs in South Korea.
Nothing funny about that story.
The culprits, it appears, are Middle East sovereign despots, losing their grip on their populations which are largely demanding freedom and a democratic voice. But it goes much deeper. Many blame the Federal Reserve, which has fostered a dual policy of federal funds rates approaching zero while simultaneously printing dollars by the billions.
Those cheap dollars flood the markets, causing speculation and inflation, and that's been particularly acute in the poorest nations, where the percentage of income spent on basic survival - food, housing, clothing - is much higher, approaching 100% and often more. Hungry people being angry people, they've taken to the streets in countries where unemployment and government corruption have outpaced the economy, resulting in popular uprisings.
Add to that the declining value of the dollar, as expressed in the rising price of crude oil, and you have today's recipe for disaster. And all of this comes before the morons in congress and the White House and various state capitols attempt to come to some sort of meeting of the minds on their budgets.
The states have to find ways to balance theirs, while the federals fight over how much spending is enough to keep the government just barely functioning, if at all.
If it feels like the United States is running rudderless on fumes, you get the idea and the nervousness has been manifested in trading the past two days. Despite the usual pumping by the Fed, sellers are out in force and it doesn't take much to move stocks hard to the downside. Missing earnings estimates - normally a sin punishable by a few points off the top - has become a mortal wound, such as what happened to Hewlett Packard (HWP), following their quarterly report, released after the close on Tuesday.
Investors scurried out of the stock on Wednesday, propelling a nearly 10% decline. Vloume was five times normal.
Most of the rest of the market didn't fare much better. Holders of gold and silver are grinning ear-to-ear.
Dow 12,105.78, -107.01 (0.88%)
NASDAQ 2,722.99, -33.43 (1.21%)
S&P 500 1,307.40, -8.04 (0.61%)
NYSE Composite 8,292.92, -32.94 (0.40%)
Decliners led advancing issues again, 4470-2093. On the NASDAQ, the flip: there were 54 new lows and only 44 new highs. At the NYSE, 60 new highs and 27 new lows, though it seems the tide has turned, at least for the present. The question now becomes how long will this downturn last before the hoards of money from the Fed overwhelm all fears and make stocks and risk appear palatable again.
Volume, which hit its best levels of the year on Tuesday, topped that on Wednesday, giving a clue that the selling is only gaining momentum.
NASDAQ Volume 2,498,464,250
NYSE Volume 6,623,988,500
Crude oil - specifically WTI (West Texas Intermediate) on the NYMEX hit $100 in midday trading, but backed off to close up a mere $2.68, at $98.10, marking the highest price seen since 2008. Since the US gets most of its oil from Canada and other Western Hemisphere sources, WTI has fallen well behind the pace in Brent Crude, tied mostly to Europe and Asia. Brent prices topped $110. Spot is quoted at $111.83 per barrel.
Gold had another banner day, rising $12.90, to reach $1,414.00, closing in on all-time highs. Silver continues to be the stellar commodity performer, up another 44 cents, to $33.30. Specialists in gold's cousin say this is nothing and $50 per troy ounce is not only possible before the calendar turns over to 2012, but likely. There simply is not enough physical supply to meet growing investor demands, much of which is causing tightness in industrial applications.
If silver demand continues, look for rising prices in many electronic devices, especially cell phones, though the price rise should not be severe since only small amounts of silver go into the overall manufacturing price.
Turmoil and popular revolt in the Middle East and across many states in America over budget issues and union busting don't exactly set up well for smooth sailing on Wall Street. Until the noise quiets, expect fear to have its way with investor confidence. Nobody wants to catch the proverbial falling knife, and with short interest at record lows, a small tumble could easily turn into an overwhelming cascade.
Meanwhile, silver and gold investors are sitting pretty as the strain on fiat currency is being felt worldwide. What nobody wants to talk about in our civil society are the bank runs in South Korea.
Nothing funny about that story.
Tuesday, February 22, 2011
Now, That IS Going to Leave a Mark
Investors take note. You are screwed.
Savers and buyers of precious metals, arable land, tools and staples, rejoice! Today our frugality, honesty and disdain for speculation has reaped significant dividends.
On Wall Street, billions of dollars were flushed in a panicked selling frenzy that appears to be just beginning. One should note that other major declines began in the Winter months, specifically, the bursting of the dot-com bubble which reached its peak on March 10, 2000, when the NASDAQ topped out at 5132.52. Within months, the high-flying tech-laden index was off by more than 25%. Within a year, it had been halved.
While this current one-day selling spree may not auger as much ill (though it could be even worse), it was the largest one-day decline on the markets since August of 2010 and unless Mr. Gadaffi (God only knows how to spell his name) changes his mind about dying a martyr on Libyan soil (remember Mubarak said something similar just weeks ago), this malaise coming from Norther Africa and the Middle East is going to hang over equity markets and oil prices for the foreseeable future.
In addition to the popular uprisings in Libya and across the oil-rich nations of the Middle East - and much less reported - was the release of the S&P/Case-Shiller housing survey (full report [PDF] here), which showed home prices declining for a 4th straight month. Essentially, the housing crisis is not over, despite the artificial stimulus of a federal tax credit to the tune of $9000 for home buyers in various parts of 2009 and 2010.
Those buyers were duped into buying overpriced houses, lured by our federal government. There will be years of pain and more defaults to come, for certain. Las Vegas, Miami, Phoenix and Tampa all reached new lows in median prices. Other areas of the country were similarly down, with 18 of 20 major city areas posting declines. Released at 9:00 am, the report put a further chill into an already freezing futures market.
Stocks gaped down, with the Dow off 120 points minutes into the session, and it didn't get any better the remainder of the day.
Dow 12,212.79, -178.46 (1.44%)
NASDAQ 2,756.42, -77.53 (2.74%)
S&P 500 1,315.44, -27.57 (2.05%)
NYSE Composite 8,325.86, -182.04 (2.14%)
Declining issues slaughtered advancing issues, 5707-975, a ratio of nearly 6:1. The measure of new highs to new lows nearly reversed course, with 85 new highs on the NASDAQ, to 39 new lows. The Big Board remained skewed, with 139 new highs to just 14 new lows. Obviously, with such a paltry number of new lows, there is plenty of froth to be blown off this overheated, artificially-stimulated market. Volume was significantly higher than most recent up-day sessions, a notable development.
NASDAQ Volume 2,272,504,500
NYSE Volume 6,243,551,500
Commodities were raging. Crude oil futures on the NYMEX closed at $95.42, officially $5.41 higher, though it should be pointed out that Friday's close was just a shade over $86.
Gold finished at $1,401.10 and silver at $32.86, both having ramped up on Monday, when markets were closed, though trading volumes were very high.
The handwriting is quite clear. Investors are nervous over developments outside the US, and also inside, as the congress weighs passing a temporary, two-week continuing resolution, raising the debt ceiling only a little, and revisiting the issue again in a fortnight. This is the leadership we are offered, which can't get beyond partisan bickering to actually tackle the fundamental problems in the US economy.
Meanwhile, the stalemate continues in Wisconsin, with other states looking squarely at similar budgetary conditions and issues. 38 states have budget shortfalls which need to be addressed and the rhetoric surrounding the differences between public sector employees and those who pay their wages and benefits, the taxpayers.
If, like many, you've been aghast over the continual money-pumping by the Federal Reserve and the antecedent rise in stocks, you may want to pull up a chair and pay attention the next few weeks and months.
It's just starting to get interesting as the grand global Ponzi scheme by central bankers worldwide begins to unravel at a rapid pace.
Savers and buyers of precious metals, arable land, tools and staples, rejoice! Today our frugality, honesty and disdain for speculation has reaped significant dividends.
On Wall Street, billions of dollars were flushed in a panicked selling frenzy that appears to be just beginning. One should note that other major declines began in the Winter months, specifically, the bursting of the dot-com bubble which reached its peak on March 10, 2000, when the NASDAQ topped out at 5132.52. Within months, the high-flying tech-laden index was off by more than 25%. Within a year, it had been halved.
While this current one-day selling spree may not auger as much ill (though it could be even worse), it was the largest one-day decline on the markets since August of 2010 and unless Mr. Gadaffi (God only knows how to spell his name) changes his mind about dying a martyr on Libyan soil (remember Mubarak said something similar just weeks ago), this malaise coming from Norther Africa and the Middle East is going to hang over equity markets and oil prices for the foreseeable future.
In addition to the popular uprisings in Libya and across the oil-rich nations of the Middle East - and much less reported - was the release of the S&P/Case-Shiller housing survey (full report [PDF] here), which showed home prices declining for a 4th straight month. Essentially, the housing crisis is not over, despite the artificial stimulus of a federal tax credit to the tune of $9000 for home buyers in various parts of 2009 and 2010.
Those buyers were duped into buying overpriced houses, lured by our federal government. There will be years of pain and more defaults to come, for certain. Las Vegas, Miami, Phoenix and Tampa all reached new lows in median prices. Other areas of the country were similarly down, with 18 of 20 major city areas posting declines. Released at 9:00 am, the report put a further chill into an already freezing futures market.
Stocks gaped down, with the Dow off 120 points minutes into the session, and it didn't get any better the remainder of the day.
Dow 12,212.79, -178.46 (1.44%)
NASDAQ 2,756.42, -77.53 (2.74%)
S&P 500 1,315.44, -27.57 (2.05%)
NYSE Composite 8,325.86, -182.04 (2.14%)
Declining issues slaughtered advancing issues, 5707-975, a ratio of nearly 6:1. The measure of new highs to new lows nearly reversed course, with 85 new highs on the NASDAQ, to 39 new lows. The Big Board remained skewed, with 139 new highs to just 14 new lows. Obviously, with such a paltry number of new lows, there is plenty of froth to be blown off this overheated, artificially-stimulated market. Volume was significantly higher than most recent up-day sessions, a notable development.
NASDAQ Volume 2,272,504,500
NYSE Volume 6,243,551,500
Commodities were raging. Crude oil futures on the NYMEX closed at $95.42, officially $5.41 higher, though it should be pointed out that Friday's close was just a shade over $86.
Gold finished at $1,401.10 and silver at $32.86, both having ramped up on Monday, when markets were closed, though trading volumes were very high.
The handwriting is quite clear. Investors are nervous over developments outside the US, and also inside, as the congress weighs passing a temporary, two-week continuing resolution, raising the debt ceiling only a little, and revisiting the issue again in a fortnight. This is the leadership we are offered, which can't get beyond partisan bickering to actually tackle the fundamental problems in the US economy.
Meanwhile, the stalemate continues in Wisconsin, with other states looking squarely at similar budgetary conditions and issues. 38 states have budget shortfalls which need to be addressed and the rhetoric surrounding the differences between public sector employees and those who pay their wages and benefits, the taxpayers.
If, like many, you've been aghast over the continual money-pumping by the Federal Reserve and the antecedent rise in stocks, you may want to pull up a chair and pay attention the next few weeks and months.
It's just starting to get interesting as the grand global Ponzi scheme by central bankers worldwide begins to unravel at a rapid pace.
Subscribe to:
Posts (Atom)
Posts
