Despite the glaring obviousness of the headline, there seems to be renewed energy that a deal will be struck before the stroke of midnight, as though that specific time would matter.
Knowing how this entire fiasco of a pubic relations event has thus far unfolded, one could assume that the squabbling and posturing (because that's all it is) will continue until after midnight before any kind of resolution can be found. Word has it that another in a series of continuing resolutions could keep negotiations ongoing over the weekend and keep the government from an "official" shutdown.
The alternative view is that the House Republicans will be seen as villains for slamming the doors over a paltry $350 million earmarked for Planned Parenthood, and, despite the innuendo, none of which money would be used for abortions.
A complete canard is what this Republican gambit is, in reality. It has nothing to do with cutting spending and is only a ploy with a dual intent, to have the government shut down and to make Democrats look bad in so doing. Thus far, it's a huge failure for the party of Lincoln.
If an agreement is to come about before the midnight deadline, it certainly will not be substantive, and it certainly will not address any of the real concerns foremost on the minds of most Americans. Taking the hubris further, expect, if no agreement is reached, for an extended period of unease and disruption, which is probably what at least one of the parties would like.
Another possible development is that in the case of a shutdown, and a prolonged one, watch for arguments to emerge based upon permanently cutting some of the 800,000 federal workers who would be furloughed without pay. By making some of the cuts permanent, the government could save billions. For instance, cutting the government workforce by 200,000 (one quarter of those being forced to stay home) could save $15 billion, using a figure of $75,000 as the average annual pay. Might be a good start.
If they're going to do anything, and I've held that neither side actually wants to pass this particular budget, they'd better get a move on. Just getting everyone back to the assembly when they're all out playing cards or having cocktails will take an hour or more alone.
This is political theater at its very worst. Two little schoolgirls could put on a better drama in their living room. The sad part is that it's only going to get worse from here. This congress is completely off the rails and out of touch with the American people. Shutting down government would be a good start if only we could begin by sending the congress critters home first.
Of course, this would soon shift these
Friday, April 8, 2011
Ahead of Government Failure, Markets Shaky, Silver Sizzles
As the clock wends its way toward midnight and a shutdown of non-essential government functions, stock players were still hedging their bets, generally showing a preference for playing the waiting game until Monday when word will be official.
That's probably a pretty stupid position, given that Republicans and Democrats are ideologically miles apart and the best time to avert a crisis would have been weeks, if not months, ago. While there still remains a slight chance that the federal government will go into full-blown shutdown, as of this writing - shortly after 4:00 pm EDT - the odds are heavily in favor of the morons in Washington putting politics ahead of principles and allowing the government to shut down.
This they do at their own peril, though the geniuses who call themselves senators and representatives would be hard-pressed to believe that the American people will have lost all faith in their ability to lead and/or govern and/or legislate. By and large, with the notable exception of Tea Partiers and anarchists everywhere, are stridently against the government closing down, be it for a week, a month, or longer.
And, strangely enough, the things most people would like to see halted, will continue. Our troops will still be fighting worthless, nothing-to-gain wars in various countries, TSA agents will continue pat-downs on ordinary citizens, and the worst of it, elected officials will continue to be paid, while some 800,000 regular federal employees will have to fend for themselves without the benefit of a regular paycheck. In fact, even our fighting men and women, half a world away, will not receive their paychecks.
Naturally, the IRS will continue to process electronic returns, though refunds will more than likely be delayed. Social Security checks will still go out on time - for now. An extended absence of the federal government might turn out to be just what the country needs, though judging by the average intelligence of the hands-out American sheeple, there will be plenty of hand-wringing, despair and repercussions not as yet unveiled to either the politicians or the general populace.
As for the markets, they will continue in denial until it becomes evident that shuttering various branches of government and putting almost a million people out of work without pay (when do these federal employees become eligible for unemployment compensation?) indefinitely is going to cause the wheels of commerce to slow to a crawl.
We are under eight hours and counting down...
Dow 12,380.05, -29.44 (0.24%)
NASDAQ 2,780.41, -15.73 (0.56%)
S&P 500 1,328.17, -5.34 (0.40%)
NYSE Composite 8,483.94, -5.39 (0.06%)
Stocks held up pretty well considering the overhanging circumstances. The Dow was down more than 80 points at its afternoon lows, but the markets spent much of the session merely marking time. Declining issues overwhelmed advancers, 4205-2275, nearly a 2:1 ratio. The NASDAQ produced only 66 new highs and 29 new lows, while on the NYSE, there were 164 new highs and only 11 new lows. Obviously, there is less appetite for high beta NASDAQ stocks for the moment, though it should also be noted that volume was dismal once again.
NASDAQ Volume 1,632,480,125
NYSE Volume 3,950,118,750
The big winners on the day were commodities, the losers anybody who eats or drives. West Texas Intermediate crude oil futures hit another 32-month high, gaining $2.49, to close out the week at $112.79. By Sunday, gas prices in the US will average close to $3.80 per gallon, though this number could be a high, if federal employees are furloughed, not having to drive to work.
The real stars were the precious metals. At 4:30 pm EDT, gold was sitting at a new all-time high of $1474.50, up $16.10 on the day. Silver continued its very own moon shot, gaining $1.27, to $40.91, another 31-year high mark, with no stopping in sight. Gold and silver will continue to rise against all currencies until structural changes in central bank policy occur, which, with the Fed continuing to print money at a non-stop clip, appears to be roughly, never.
What the real impact of a federal government shutdown will be is still residing in the realm of the unknown, though one should expect the unexpected. As black swans go, this one could be darker and larger than most.
Money Daily will update as events warrant.
That's probably a pretty stupid position, given that Republicans and Democrats are ideologically miles apart and the best time to avert a crisis would have been weeks, if not months, ago. While there still remains a slight chance that the federal government will go into full-blown shutdown, as of this writing - shortly after 4:00 pm EDT - the odds are heavily in favor of the morons in Washington putting politics ahead of principles and allowing the government to shut down.
This they do at their own peril, though the geniuses who call themselves senators and representatives would be hard-pressed to believe that the American people will have lost all faith in their ability to lead and/or govern and/or legislate. By and large, with the notable exception of Tea Partiers and anarchists everywhere, are stridently against the government closing down, be it for a week, a month, or longer.
And, strangely enough, the things most people would like to see halted, will continue. Our troops will still be fighting worthless, nothing-to-gain wars in various countries, TSA agents will continue pat-downs on ordinary citizens, and the worst of it, elected officials will continue to be paid, while some 800,000 regular federal employees will have to fend for themselves without the benefit of a regular paycheck. In fact, even our fighting men and women, half a world away, will not receive their paychecks.
Naturally, the IRS will continue to process electronic returns, though refunds will more than likely be delayed. Social Security checks will still go out on time - for now. An extended absence of the federal government might turn out to be just what the country needs, though judging by the average intelligence of the hands-out American sheeple, there will be plenty of hand-wringing, despair and repercussions not as yet unveiled to either the politicians or the general populace.
As for the markets, they will continue in denial until it becomes evident that shuttering various branches of government and putting almost a million people out of work without pay (when do these federal employees become eligible for unemployment compensation?) indefinitely is going to cause the wheels of commerce to slow to a crawl.
We are under eight hours and counting down...
Dow 12,380.05, -29.44 (0.24%)
NASDAQ 2,780.41, -15.73 (0.56%)
S&P 500 1,328.17, -5.34 (0.40%)
NYSE Composite 8,483.94, -5.39 (0.06%)
Stocks held up pretty well considering the overhanging circumstances. The Dow was down more than 80 points at its afternoon lows, but the markets spent much of the session merely marking time. Declining issues overwhelmed advancers, 4205-2275, nearly a 2:1 ratio. The NASDAQ produced only 66 new highs and 29 new lows, while on the NYSE, there were 164 new highs and only 11 new lows. Obviously, there is less appetite for high beta NASDAQ stocks for the moment, though it should also be noted that volume was dismal once again.
NASDAQ Volume 1,632,480,125
NYSE Volume 3,950,118,750
The big winners on the day were commodities, the losers anybody who eats or drives. West Texas Intermediate crude oil futures hit another 32-month high, gaining $2.49, to close out the week at $112.79. By Sunday, gas prices in the US will average close to $3.80 per gallon, though this number could be a high, if federal employees are furloughed, not having to drive to work.
The real stars were the precious metals. At 4:30 pm EDT, gold was sitting at a new all-time high of $1474.50, up $16.10 on the day. Silver continued its very own moon shot, gaining $1.27, to $40.91, another 31-year high mark, with no stopping in sight. Gold and silver will continue to rise against all currencies until structural changes in central bank policy occur, which, with the Fed continuing to print money at a non-stop clip, appears to be roughly, never.
What the real impact of a federal government shutdown will be is still residing in the realm of the unknown, though one should expect the unexpected. As black swans go, this one could be darker and larger than most.
Money Daily will update as events warrant.
Thursday, April 7, 2011
Rattled Market Recovers in Late-Session Trade
Investors, worried over an imminent government shutdown, got another jolt of reality when it was reported that a 7.4 earthquake struck Japan just after 10:00 am EDT.
The quake struck in pretty much the same region as last month's 9.0 earthquake, but geologists quickly downgraded the temblor to 7.1 and eased fears over another tsunami, measuring this one at a mere one meter (roughly three feet). This most recent quake hit in what was the middle of the night in Japan, so reports were rather sketchy, though it appeared that damage had been minimal.
With the waning of that alarm, investors quickly got back to work buying stocks, bringing the major indices back to nearly break-even at the close.
Word out of Washington was still dire, suggesting that Republicans would force Democrats into a no-win situation without resolution of their differences and cause a government shutdown on Friday night, April 8, at midnight. While most Republicans and Democrats alike would prefer to work out the narrow $7 billion worth of difference on the current budget, the House Republicans, led by first-term Tea Partiers, seem intent on standing fast to ridiculous ideological riders that would defund Planned Parenthood and public support for PBS and NPR, and it appears that these freshman legislators are going to get what they cheered yesterday, an indefinite shutdown of non-essential government services, since the Obama administration and the Senate Democrats say they have negotiated in good faith and enough is enough.
Just a little more than a day is left to work out a compromise, though a meeting today between House leader John Boehner, senate leader Harry Reid and President Obama produced nothing other than a promise that the same leaders would meet again at 7:00 pm tonight.
In another grandstanding move, House Republicans pushed through a one-week funding bill that would provide paychecks for the military, though President Obama has promised a veto should the measure reach his desk. This is how the Republicans are holding the process captive, by using American servicemen and women as props in their political debate. This level of audacity and below-the-belt maneuvering is reserved to the worst politicians on the planet, though the House newcomers seem perfectly content to drive the country to the brink of insolvency.
Wall Street took it in stride, but the eventual fallout from shutting the government down for an extended period could have long-lasting consequences the newbie Republicans can hardly imagine.
Dow 12,409.49, -17.26 (0.14%)
NASDAQ 2,796.14, -3.68 (0.13%)
S&P 500 1,333.51, -2.03 (0.15%)
NYSE Composite 8,489.33, -18.90 (0.22%)
Even though the major indices finished in the red, there was a pronounced number of losers over winners, with declining issues beating back advancing ones, 4092-2427. The NASDAQ finished with 115 new highs and 24 new lows, while the NYSE saw 154 new highs and just 4 new lows. Volume, despite the drop and rally in the morning, was still very much on the light side.
NASDAQ Volume 1,811,538,125.00
NYSE Volume 4,322,927,000
The day's events did nothing to slow the rise in the price of oil, however, as WTI crude futures rose to $110.30, up another $1.47 on the day, as word that Libyan rebels were being pushed back by forces loyal to embattled leader Moammar Gadhafi.
Gold made another new closing high, but only by an 80 cent gain, to $1,459.30. Silver tacked on 17 cents, to $39.55, another 31-year high.
With a looming government shutdown less than 36 hours away, markets are more than likely to remain somewhat stable, though a prolonged battle by the political leadership might be more than the fragile economy can handle. Sadly, the amount in question is tiny compared to the intellectual vacuity of the Tea Party Republicans.
The quake struck in pretty much the same region as last month's 9.0 earthquake, but geologists quickly downgraded the temblor to 7.1 and eased fears over another tsunami, measuring this one at a mere one meter (roughly three feet). This most recent quake hit in what was the middle of the night in Japan, so reports were rather sketchy, though it appeared that damage had been minimal.
With the waning of that alarm, investors quickly got back to work buying stocks, bringing the major indices back to nearly break-even at the close.
Word out of Washington was still dire, suggesting that Republicans would force Democrats into a no-win situation without resolution of their differences and cause a government shutdown on Friday night, April 8, at midnight. While most Republicans and Democrats alike would prefer to work out the narrow $7 billion worth of difference on the current budget, the House Republicans, led by first-term Tea Partiers, seem intent on standing fast to ridiculous ideological riders that would defund Planned Parenthood and public support for PBS and NPR, and it appears that these freshman legislators are going to get what they cheered yesterday, an indefinite shutdown of non-essential government services, since the Obama administration and the Senate Democrats say they have negotiated in good faith and enough is enough.
Just a little more than a day is left to work out a compromise, though a meeting today between House leader John Boehner, senate leader Harry Reid and President Obama produced nothing other than a promise that the same leaders would meet again at 7:00 pm tonight.
In another grandstanding move, House Republicans pushed through a one-week funding bill that would provide paychecks for the military, though President Obama has promised a veto should the measure reach his desk. This is how the Republicans are holding the process captive, by using American servicemen and women as props in their political debate. This level of audacity and below-the-belt maneuvering is reserved to the worst politicians on the planet, though the House newcomers seem perfectly content to drive the country to the brink of insolvency.
Wall Street took it in stride, but the eventual fallout from shutting the government down for an extended period could have long-lasting consequences the newbie Republicans can hardly imagine.
Dow 12,409.49, -17.26 (0.14%)
NASDAQ 2,796.14, -3.68 (0.13%)
S&P 500 1,333.51, -2.03 (0.15%)
NYSE Composite 8,489.33, -18.90 (0.22%)
Even though the major indices finished in the red, there was a pronounced number of losers over winners, with declining issues beating back advancing ones, 4092-2427. The NASDAQ finished with 115 new highs and 24 new lows, while the NYSE saw 154 new highs and just 4 new lows. Volume, despite the drop and rally in the morning, was still very much on the light side.
NASDAQ Volume 1,811,538,125.00
NYSE Volume 4,322,927,000
The day's events did nothing to slow the rise in the price of oil, however, as WTI crude futures rose to $110.30, up another $1.47 on the day, as word that Libyan rebels were being pushed back by forces loyal to embattled leader Moammar Gadhafi.
Gold made another new closing high, but only by an 80 cent gain, to $1,459.30. Silver tacked on 17 cents, to $39.55, another 31-year high.
With a looming government shutdown less than 36 hours away, markets are more than likely to remain somewhat stable, though a prolonged battle by the political leadership might be more than the fragile economy can handle. Sadly, the amount in question is tiny compared to the intellectual vacuity of the Tea Party Republicans.
Wednesday, April 6, 2011
Government About to Shut Down; Somebody Turn Out the Lights
Even in advance of what looks like an almost sure government shutdown, the greed of Wall Street shines through. Stocks must go up. I have no words to properly express the absolute lunacy into which the entire world has been thrust by the banking/political elite.
Dow 12,426.75, +32.85 (0.27%)
NASDAQ 2,799.82, +8.63 (0.31%)
S&P 500 1,335.54, +2.91 (0.22%)
NYSE Composite 8,508.23, +19.84 (0.23%)
Advancers finished well ahead of declining issues, 3778-2714. On the NASDAQ, there were 211 new highs and 21 new lows, a ratio of 10:1. On the NYSE, that ratio was 33:1, with 301 new highs and 9 (nine) new lows. These are extremes, and, like all extremes, unsustainable under normal circumstances, which currently are not. Also normally unsustainable is a rising stock market on abysmally-low volume, as has been the case for well over two years.
NASDAQ Volume 1,982,290,875
NYSE Volume 4,404,181,000
If there's a breaking point, oil will find it. WTI crude lifted today another 49 cents, to another new 2 1/2 year high, at $108.83. The average cost of a gallon of gas in the United States is now $3.71. Alaska, Hawaii and California are already averaging over $4.00 per gallon for unleaded regular.
The precious metals became even more precious. Gold gained another $6.00, to reach another record high of $1,458.50. Silver was up 20 cents, to $39.39. Both metals were qouted considerably higher during the day before some profit-taking. In the event of a government shut-down, expect the metals to rocket even higher. A prolonged shutdown, of two weeks or longer, should produce fireworks the likes of which financial markets have never seen. Gold would likely gain $200-300, and silver would easily surpass $45 in short order.
On the flip side, the stock market might crash, making the implausible, reality, plus the added benefit of having the politicians as convenient scapegoats.
Nothing could be more predictable from the scum of Wall Street and Washington.
Dow 12,426.75, +32.85 (0.27%)
NASDAQ 2,799.82, +8.63 (0.31%)
S&P 500 1,335.54, +2.91 (0.22%)
NYSE Composite 8,508.23, +19.84 (0.23%)
Advancers finished well ahead of declining issues, 3778-2714. On the NASDAQ, there were 211 new highs and 21 new lows, a ratio of 10:1. On the NYSE, that ratio was 33:1, with 301 new highs and 9 (nine) new lows. These are extremes, and, like all extremes, unsustainable under normal circumstances, which currently are not. Also normally unsustainable is a rising stock market on abysmally-low volume, as has been the case for well over two years.
NASDAQ Volume 1,982,290,875
NYSE Volume 4,404,181,000
If there's a breaking point, oil will find it. WTI crude lifted today another 49 cents, to another new 2 1/2 year high, at $108.83. The average cost of a gallon of gas in the United States is now $3.71. Alaska, Hawaii and California are already averaging over $4.00 per gallon for unleaded regular.
The precious metals became even more precious. Gold gained another $6.00, to reach another record high of $1,458.50. Silver was up 20 cents, to $39.39. Both metals were qouted considerably higher during the day before some profit-taking. In the event of a government shut-down, expect the metals to rocket even higher. A prolonged shutdown, of two weeks or longer, should produce fireworks the likes of which financial markets have never seen. Gold would likely gain $200-300, and silver would easily surpass $45 in short order.
On the flip side, the stock market might crash, making the implausible, reality, plus the added benefit of having the politicians as convenient scapegoats.
Nothing could be more predictable from the scum of Wall Street and Washington.
Tuesday, April 5, 2011
Markets Struggle Through Late-Session Sell-Off; Metals Soar
Disappointed that government leaders met and failed to reach agreement on a compromise plan that would keep the government from shutting down later this week, investors mostly headed for the hills late in the day.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
With the North Africa, Middle East and Japan worries already weighing on the markets, the idea that the federal government would shut down at the end of the week seemed to be the last straw. President Obama met with House Republican leader John Boehner and Senate majority leader Harry Reid, but failed to reach any meaningful understanding on the proposed spending bill making its way through congress.
The politicians are squabbling over whether to cut anywhere from $35 to $61 billion dollars from the remaining 2011 budget, with the fiscal year ending in September. It's all become just bad theater, with both parties' leaders posturing and waving their arms about like crazed lunatics. In the end, the cuts will matter little, since the money will be re-appropriated in the next or an upcoming session and all of it is borrowed anyway.
Besides the amounts differing by so little, the amount of "cuts" is laughable, at well less than 1% of total federal outlays, which totaled more than $4 trillion in the 2010-11 budget.
Still, investors worry that the money spigot from Washington may be cut off in some unfathomable way that could affect them, though prospects for anything changing very much - even in the case of a shutdown - are slim.
Another worry is that the government exceeds the debt ceiling, which some contend has already been breached, so that the government would not have funds available to service their debt, sending interest rates soaring and confidence - what little of that is left - in the United States plummeting.
As such, stocks retreated in unison in the afternoon after racking up decent morning gains, the major indices finishing in split fashion.
Dow 12,393.90, -6.13 (0.05%)
NASDAQ 2,791.19, +2.00 (0.07%)
S&P 500 1,332.63, -0.24 (0.02%)
NYSE Composite 8,488.39, +5.98 (0.07%)
Gainers beat losers by a narrow margin, 3456-3000. On the NASDAQ, there were 203 new highs and 34 new lows, while the NYSE saw 284 stocks reach new highs and only 14 make new lows. Volume was materially better than Monday's dreadfully slow session.
NASDAQ Volume 1,967,010,125
NYSE Volume 4,186,267,250
The real story of the day came from the commodity pits. While WTI Crude futures slipped slightly, down 13 cents, to $108.34, gold powered ahead $19.50, to a new, all-time closing high of $1,452.50. Silver was also on the buying list, adding 69 cents, to $39.18, the highest price since 1980.
What the gold and silver physical markets (if you're in an EFT, you'll likely never actually see or touch the silver or gold your shares represent) are telling us is that the level of fear and distrust has risen to feverish levels. Beyond $4/gallon gas and a nuclear holocaust in Japan, the threat of a major credit and/or liquidity crisis has once again reared its ugly head, this time in the threatened shutdown of the US federal government.
Whether the politicians are merely toying with the emotions of the American people or serious about failing to resolve their budgetary differences, the world is watching and most don't like what they see.
Expect more turbulence in days to come unless the government situation is resolved prudently and in all due haste. MAybe then somebody can take a look at those Japanese reactors which threaten to kill everybody with radioactive isotopes unless a solution is found, like entombment.
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