Greece in Tatters, US Still in Denial

As Greece burns, global stock markets reel in terror.

It's really about time that the oligarchs running the show down on Wall Street come to the realization the most of the rest of the world isn't buying their load of bull hockey any more and investors are making their displeasure known by their feet, fleeing overpriced, overhyped, intangible assets as quickly as they can.

If the shakeout of small investors wasn't complete in the Fall of 2008 and the Winter of 2009, then this is to be expected. There are a myriad of reasons stocks should be sold off. Here's a small ticking off of the major bullet points:

• Incomes haven't risen in years, though the price of everything from food to rent to heating fuel has doubled in some cases.
• Maybe Americans are a little bit tired of killing themselves at low-wage jobs just to buy gas at upwards of $3.50 a gallon.
• Speaking of jobs, there aren't any.
• Americans are sick of bailouts of the banks which caused this crisis.
• Americans are sick of bankers getting enormous bonuses for abject failure.
• Americans are sick of a federal government that keeps putting us deeper and deeper in debt.
• Americans are sick and tired of the Fed devaluing the currency and causing global inflation.
• Americans are sick and tired of the casino-like atmosphere on Wall Street, controlled by a very few insiders with guarantees of non-failure, not to mention the insider trading, HFTs, front-running, bond-flipping and all the rest of the improper accounting tricks and bogus schemes.
• Americans would like to see Jamie Dimon, Lloyd Blankfien, Angelo Mozillo and many others prosecuted for their crimes, but the US Justice Department has been bought off.
• Iceland defaulted, Ireland is a basket case, Greece is going to default and then Portugal and Spain and Italy should, if only to express outrage at the corrupt Berlusconi government.
• The US government is horribly corrupt as well and default is headed for our shores as well, since all the Treasury Secretary and Federal Reserve Chairman know how to do is further impoverish the people of the United States, and, to a lesser degree, the rest of the population of the world.
• Americans are sick of rules, taxes, regulations, heavy-handedness at all levels of government, the continued deprecation of civil liberties, the lies, obfuscation and treachery at the highest levels of government and finance. Americans want the truth, but the politicians and bankers know that they would all be behind bars, or worse, should the truth be known.
• Americans want the government out of their lives, decent jobs, no more wars, no more lying, nothing more.

Is that enough? Because there is more.

Granted the oligarchs of Wall Street and Washington will not listen. They will pose and posture and make statements about what America wants and needs and do nothing of the kind. And the media will bombard us with non-stop presidential politics for the next 18 months, even though half of the population could care less.

While Greece has surely lost the control of the public and all confidence, just as has Ireland and Iceland, and Egypt and Syria and many other countries, the American "establishment" has lost the confidence of its people. It's really that simple. Nobody approves of what goes in on Washington, and thus, nobody abides by them. The US political structure is such a laughing stock that serious people simply ignore it. Add on to that the massive numbers of people who have seen the political and economic systems for what they are and are opting out, dropping out, refusing to comply and bend to the will of the small, wealthy minority who wants to make all the rules, and you have a perfect condition for collapse, the collapse that should have happened three years and $20 trillion of wasted stimulus ago.

The desperation of the elitists is evident from the sour expressions of the paid monkeys on CNBC, who keep insisting that this downturn is temporary or transitory or a "soft patch" in the "recovery." It's hilarious to watch, especially if one is invested in hard goods, precious metals and/or commodities. To put it simply, stocks are for suckers, and the number of suckers still at the table is dwindling, fast.

Dow 11,897.27, -178.84 (1.48%)
NASDAQ 2,631.46, -47.26 (1.76%)
S&P 500 1,265.42, -22.45 (1.74%)
NYSE Composite 7,967.81, -164.96 (2.03%)

The internals told the true story of the devastation. Declining issues outpaced advancers by the largest margin in almost than a year, 5379-1270. NASDAQ recorded 11 new highs and 114 new lows, while the NYSE saw 23 new highs and 79 new lows. The combined total has the new lows ahead for the ninth consecutive session, at just 34 new highs and 193 new lows, with surely more to come.

Volume was actually a little bit perky, especially tantalizing for short sellers and bears.

NASDAQ Volume 1,993,706,125
NYSE Volume 4,653,039,000

As the Greek situation broke down and out, into street protests and young men attacking riot police with sticks, bats and rocks, the dollar became the safe haven currency, smashing crude oil down by $4.68, to $94.81. Oil still has a long way to come down before any kind of supply-demand equilibrium can be maintained. $70 or $60 or even less per barrel are no longer outside targets.

Gold rose modestly as as store of value, up $6.70, to $1530.80. Silver tagged along, gaining 41 cents, to $35.80, though, if stocks continue to slide, they may take other asset classes along with them in a deflationary episode, despite the ongoing efforts by the central banks and the Fed to inflate.

Today's declines took out all of yesterday's gains. Stocks are on track to record their first seven-week losing streak since early 2001, predating 9/11.

Just for fun, tomorrow's traders will have to deal with this week's initial unemployment claims, which will be released an hour prior to the opening bell. It ought to be a doozy.

Theatre of the Absurd in DC as Bernanke Threatens US

A grand assemblage of the masterminds responsible for the demise of the global economy met in Washington, DC, today, for what was called the Committee For A Responsible Federal Budget - somewhat of a misnomer or mutually exclusive mistake with "responsible" and "federal budget" in the same sentence.

Headlining the event was none other than the master thief, Fed Chairman Ben Bernanke, who spoke for about ten minutes to open the affair. In a somewhat petulant and, at the same time, preachily pedantic statement, Bernanke made an open threat to the citizens of the United States. As he outlined the possibilities of congress not raising the debt ceiling he said,

"Some have suggested that payments by the Treasury could be prioritized to meet principal and interest payments on debt outstanding, thus avoiding a technical default on federal debt. However, even if that were the case, given the current size of the deficit and the uneven time pattern of government receipts and payments, the Treasury would soon find it necessary to prioritize among and withhold critical disbursements, such as Social Security and Medicare payments and funds for the military." [emphasis mine]

There you have it folks. The Chairman of the Federal Reserve - a private bank in every sense of the word "private" - telling the world that failure to raise the debt ceiling would result in the US government defaulting on its obligations to its people. Not that the US government could send home millions of worthless government paper-shufflers or stop payments to oil companies or foreign countries, no, the government would stiff the elderly, the sick and infirm and those who fight our wars for global US dollar hegemony in the military.

Nice, huh?

Sickening is what it is. Absurd. Bizarre. Mere words cannot adequately describe the mendacity of the elite banker/politician class, their abject scorn for the public nor their ability to destroy in the last ten-and-a-half years what took 200 years to build. The American public, and, to some degree, the populations of the rest of the world are now and have been at the point of the spear wielded by the elitists of the world.

Just in case anybody is wondering, the chance of congress NOT raising the debt ceiling are about the same as the federal funds rate: approaching ZERO.

Today's well-orchestrated market response was a mammoth rally on - big surprise - the lowest volume in three weeks. Now we will be told by the mainstream mouthpieces in the media that the US economy is just in a soft patch on the road to recovery. All is well. Go out and spend.

These are free markets? Really? Go back to sleep if you believe that.

Dow 12,076.11, +123.14 (1.03%)
NASDAQ 2,678.72, +39.03 (1.48%)
S&P 500 1,287.87, +16.04 (1.26%)
NYSE Composite 8,132.77, +115.71 (1.44%)

Now, this is where it gets even weirder. Market internals show advancing issues beating decliners by a whopping 5268-1383. On the NASDAQ, there were 30 new highs and 68 new lows. The NYSE showed 30 new highs and 28 new lows, so the indicator is still negative with the combined 60 new highs bettered by 96 new lows. Give them a few days, though, and the market manipulators will turn these numbers around, even after eight straight days of the lows leading the highs.

Did somebody mention that volume was non-existent, and, normally, low volume on a huge upside day is a sure sign that the rally was a fake? Note that options expiration is Friday, and some rather large bets were likely cashed today.

NASDAQ Volume 1,725,560,250.00
NYSE Volume 3,972,814,250

Another sure sign that the planet is in the death grip of the banking cartel is that oil spiked by $2.07 today, to $99.37 per barrel. Flows into precious metals were strong, however, with gold up $8.80, to $1524.10 and silver ahead by 63 cents, to $35.39.

The hubris from the Fed Chairman today was breathtakingly simple and completely without precedent. We are owned.

Stocks Up? Not Really.

The desperation, both on Wall Street and in the hallowed halls of Congress and at the white House, is becoming palpable and, if the whole sordid state of affairs of our economy were not so profoundly sad, laughable.

Today, the wizards controlling the High Frequency Trading (HFT) computers, which account for about 75% (some say it's more than that) of all stock trades, managed to send the broad indices up in the morning, down a bit in the afternoon and close nearly unchanged. This is a very neat trick, devised to scalp money from day-traders, hedge funds, momentum players and anyone else foolish enough to venture into the caverns of Wall Street.

What it is not, is indicative of a stable condition in the markets. The current environment is about as unstable as it has been since the fall of 2008, when the entire global financial system nearly fell off the rails. There is the condition of the Greek debt, which sorely needs restructuring and plans have come, gone, come back, been revised, altered, accepted, rejected, sliced, diced, proposed, failed, and eventually found to be lacking. Greece will default; it is only a matter of time, as will Ireland, Spain, Portugal and maybe even Italy, Hungary and other small countries, like Balarus, which already has revalued its currency. Ouch.

It's interesting to note that Belarus took the extreme measure of revaluing its currency in light of a current account deficit that was 16% of GDP. In the US, congress is toying with raising the debt ceiling, and if it does so, will likely result in a current account deficit that's at least 10-12% of GDP. We're getting closer, and we can do it, for sure. USA - USA - USA!

Today's flat line finish was a sham. Take a look at the shattered internals.

Dow 11,952.97, +1.06 (0.01%)
NASDAQ 2,639.69, -4.04 (0.15%)
S&P 500 1,271.83, +0.85 (0.07%)
NYSE Composite 8,017.06, +0.67 (0.01%)

Losing stocks led winners by a wide margin, 3918-2699. NASDAQ new highs: 32; new lows: 139. NYSE new highs 21; new lows: 90. The combined total of 52 new highs and 229 new lows marks the seventh straight day in which new lows have exceeded new highs and indicates, more strongly than ever, that this downturn is going to be deeper and longer than anyone on Wall Street of in Washington is willing to disclose. A few numbers have been bandied about, like 1000 on the S&P and 10,000 on the Dow as possible bottoms, though die-hard deflationists are looking for much lower figures, rivaling or even exceeding the lows of March, 2009.

Volume was, as usual, depressed and depressing.

NASDAQ Volume 1,854,694,875.00
NYSE Volume 4,102,367,000

In deflationist terms, there was good news. WTI crude oil fell by $1.99, to $97.30, the lowest price in month. Now, if drivers can just hang on a while longer, some of the price declines may begin showing up at the pump.

Precious metals were also lower, with gold coming down $16.80, to $1515.30, and silver once again breaking below $35/ounce, down $1.44, to $34.76.

The handwriting is on scrawled across the economic wall: No growth, no wages inflation, no commodity inflation, all assets are due for another round of devaluation. Hold, wait, then buy gold, silver, tools, arable land and other desirable assets.

Stocks Down for Sixth Straight Week; Worst Since 2002

Whatever happened to the recovery? All of a sudden, nobody on Wall Street or in Washington is talking about "green shoots", improvement, growth or any of the associated nonsense that went along with the previous two years' worth of stimulus, easy Fed policy, bailouts and handouts.

But who's counting, anyway? Stocks fell for the sixth straight week, and, due to a sudden turnaround at 2:00 pm in the financial sector, the day's losses could have - and should have - been a whole lot worse. By now, the only people who don't know that we're in the throes of pure economic upheaval in its most base form - that of currency destruction - are the President (who took off early today, heading for a weekend at Camp David) and Larry Kudlow, who said last night on his CNBC show, The Kudlow Report, that he thought the "correction had run its course."

Naturally, both Larry and Mr. Obama are clueless, or hiding behind the facade of officialdom, because what's weighing most on stocks these days is the total distaste and/or disregard for all manner of equities by the general public. It should be apparent that most Americans either don't have the money to invest in stocks or have, and not liking the results, are completely out of the paper market and turning to cash, gold, silver, art, collectibles, or other commodities.

Nobody likes Wall Street's paper except Wall Street, and that's a fact well-known to anybody who's been following these things for more than the past couple of months. Wall Street paper is made up by Wall Street, distributed among themselves, and bought, sold, sliced and diced as many ways as humanly (or by computer) possible... until... there's nobody else to take the paper, and that's the condition we have today.

What other reason could there be for such a massive sell-off on such paltry, absolutely slush-fund-looking volume? The churn upwards has reversed course and the majors are now going to eat each other in a massive orgy of short-selling all the way to the bottom, wherever that might be.

In months ahead, look for blown up hedge funds, even more absurdly-underfunded pension funds and the near complete collapse of Wall Street's most-favored institutions. Some contend that the great unwind has already commenced, begun in earnest in 2007, completed in 2008 and the Spring of 2009. All that's occurred since has been a perverse show with no underlying value.

Whatever the case, stocks are no place to park money right now, and probably won't be for another few years, as the masters of the universe scramble to hold onto what little is left of the markets and the US economy.

A couple of side notes to benefit those who didn't see the carnage:

From Barron's Blog: "Financial stocks were falling in early trading, but shot up around 2 p.m. after CNBC reported that capital requirements for big banks will likely be less onerous than the market had been expecting."

That's just what we need, more leverage and easier capital requirements for the world's biggest banks. My, oh, my, what great leverage you have. Might as well make it 1000-1 and blow everything up.

Zero Hedge reports: Fed releases final POMO schedule of $60 billion.

Well, let's see how stocks fare without free money. Anybody not dreading July - the end of the Fed's slimy handouts to the banks - is living in a dream world, which would include 90% of the global population.

So, down we go. BTW: there have been other declines of six straight weeks, but the last one was in 2002. See you on the other side, if there is another side to this horrible story.

Dow 11,951.91, -172.45 (1.42%)
NASDAQ 2,643.73, -41.14 (1.53%)
S&P 500 1,270.98, -18.02 (1.40%)
NYSE Composite 8,016.39, -133.26 (1.64%)

As expected, declining issues buried advancing ones, 4462-1202. Our favorite indicator showed even more trouble ahead. New highs on the NASDAQ were subsumed by new lows, 24-163. On the NYSE, there were only 20 new highs and 95 new lows, which makes the combined total the worst since the lows overtook the highs, six sessions ago, 44-258. If history is any guide - and it's usually a good one - this indicator will not turn over for at least six months, probably longer. Once either the new highs or new lows take an edge, it's generally for an extended period. For instance, new highs held sway over new lows on a daily basis for nearly two years before this most recent change.

Volume was again pathetic. Calling it light would be quite the understatement.

NASDAQ Volume 1,978,513,625
NYSE Volume 3,972,811,750

In today's great downdraft, commodities didn't fare any better, WTI crude futures on the NYMEX tumbled $2.64, to $99.29. Gold was taken down $12.20, to $1532.10, if only because of fund managers scrambling to meet margin calls. Silver took the worst of the action, falling $1.37, to $36.20 per ounce.

Putting the recent slide into perspective, since April 29, the Dow Jones Industrial Average has fallen by 858 points, still closing in on official correction territory, soon to become bear market territory. The Dow is less than 400 points from falling into negative territory for the year. The NASDAQ is already sporting a decline for all of 2011, closing today about nine points lower than where it ended 2010. It's lost 200 points since the market top, April 29.

As for the S&P, it's 93 points down over the past six weeks and is up a mere 13 points for the entire year. Time wasted, indeed. Does anyone now think that bailing out the too-big-to-fail banks was a good idea? Had the government done what was proper - that being nothing - and allowed the banks to go under and reorganize in other mysterious forms, the global economy would most likely be booming right now. Instead, we have a global catastrophe completely of their own making which is falling down upon their heads.

A pox on all their houses. Kick a banker to the curb today. They've been doing it to us since 1913.

Well, We All Knew This Was Coming

Nothing, in the world of the financial markets, moves in a straight line, so it was only a matter of time that the stock indices would cease falling and post a day of positive, "green shoots" results, and today was that day.

Call it whatever you like - PPT manipulation, dead cat bounce, oversold conditions, snap-back rally - it's nothing out of the norm for markets to do these kinds of things, and, taking a word from Fed Chaiman Ben Bernanke, it is likely a "transitory" event, like the wind, which passes on and blows in another time and place.

Even with today's sudden upsurge reversal of fortune, volume was horrid and stocks finished well off their highs, with widespread selling occurring in the final hour. That's likely because today's move was highly orchestrated by the usual suspects, with aid from the Fed (remember, QE2 isn't over yet). Bonds were flipped and turned into stock purchases, mostly in the very same names that control 80% of the trading on the exchanges. You know the names; no need to repeat them here.

Getting right down to it, after sustaining six straight days of losses, this was nothing about which to get excited, that's for sure. For instance, even factoring in today's gains, the Dow is still off a whopping 445 points since May 31, and 686 points since the top on April 29 (12,810).

Anyone suggesting that it is anything other than a one-day event should be barred from ever commenting on stocks or financial issues, in perpetuity. Selling stocks will resume sooner, rather than later.

Dow 12,124.43, +75.49 (0.63%)
NASDAQ 2,684.87, +9.49 (0.35%)
S&P 500 1,289.00, +9.44 (0.74%)
NYSE Composite 8,149.65, +68.30 (0.85%)

Internals were slightly improved, with advancing issues topping decliners, 3538-2116. The NASDAQ was good for 26 new highs and 119 new lows; the NYSE saw 31 new highs and 70 new lows, making our combined reading 57 new highs and 189 new lows, a fifth straight session with the lows leading the way.

Volume? Come on, now.

NASDAQ Volume 1,686,693,375
NYSE Volume 3,489,525,750

Over in the commodity space, the aberration known as crude oil futures gained $1.19, to $101.93. There is no good reason for the price of oil to be this high. A stable price of around 470-80 per barrel would be sufficient to satisfy all parties without putting unnecessary pressure on end-product consumers. If there's any one thing that will keep a slow economy from improving, it is high fuel or food prices and we have them both. Of course, the government, usually quick to impose its will wherever it pleases, does nothing about this. To put it simply, our elected officials at all levels have ceased representing the people of America long ago. In a few words, THEY SUCK.

Oddly enough, gold bugs saw right through the rise in equities and bought more, bringing the price up by $6.60, to $1544.40. Gold is still up 25% on the year. Difficult to argue with those kinds of returns. Silver was also bid higher, up 75 cents, to $37.55.

Tomorrow, the weekend. Thank goodness.