Wall Street pretty much mailed this one in today, as there was no significant follow-up to yesterday's machine-driven rally. No surprise there, as all positions are squared up by the computers, with no place to go forward without positive economic news.
Stocks started lower and ended higher, with marginal gains, completely ignoring the three economic reports, which, in a less-controlled, more robust environment would have sent the Dow reeling to a 200-point decline, though in today's completely schizophrenic environment, data doesn't matter, especially if it's not good.
The Case-Shiller Home Index fell another 4.52% on a year-on-year basis, but marked the third straight month of increasing prices, with a 1.1% increase from May to June. The Index, which is cited by most economists but is greatly flawed and dated, does not factor into account many foreclosure and short sales.
Pending home sales fell by 1.3% in June, another lagging indicator, and the expectation is for further declines in July and August, which will be reported near the end of September and October, just in time to inform everybody of what they;ll already know by then, that the US economy is in serious decline. In the meantime, wall Street uses the flawed, late data to bolster its own "recovery" theme and keep stock prices high.
Something from which nobody can hide, however, was the government's own reading on consumer confidence which dove to 44.5, from 59.2 in July, its lowest level since April, 2009, which was pretty much at the end of the financial collapse of 2008.
Consumers aren't happy, but Wall Street continues to plug along, pushing the same corporations that laid off millions and haven't hired many back.
Dow 11,559.95, +20.70 (0.18%)
NASDAQ 2,576.11, +14.00 (0.55%)
S&P 500 1,212.92, +2.84 (0.23%)
NYSE Composite 7,464.00, +13.70 (0.18%)
Advancing issues beat losing ones, 3896-2581. There were 26 new highs on the NASDAQ, with 22 new lows. On the NYSE, new highs topped new lows, 41-4, putting the combined total at a moderately positive, 67-26, in favor of new highs. Volume was light.
NASDAQ Volume 1,846,172,625
NYSE Volume 4,543,808,500
Without any reason other than there's a big driving weekend coming up with Labor Day, oil galloped ahead $1.63, to $88.90 at the close. Gas prices have been reported as rising by about a nickel nationally, this, of course, prior to them coming down much at all when oil futures were hovering just above $80/barrel.
Countering the excesses of the oil cartel, gold gained $46.50, to $1835.00, erasing much of the losses from the previous six sessions and more or less thumbing its nose at the backers of debt-backed money. Silver managed to gain 43 cents, to $41.31 the ounce.
Advice for today: Buy a good, used bike. Many available, good exercise and the cost of fuel is zero.
Tuesday, August 30, 2011
Monday, August 29, 2011
Machines At Work, or, Why Humans Are No Longer Needed (nor Safe) on Wall St.
I am going to take a wholly different approach to today's post.
You'll notice right away that I'm using first person singular rather then the usual third person tense usually employed on this blog, and the reason for that has to do with the absurd trading pattern exhibited on the major indices today, the Monday after the great storm Irene that wasn't so great, and the first trading day after the also-not-so-great Fed Chairman Ben Bernanke's Jackson Hole speech.
I'm speaking for myself, as a human being, because what trading on Wall Street has become - with the advent of co-located servers and HFTs - is definitely not anything that can be analyzed using old methodologies. Throw out the old P/E models; earnings per share are also meaningless now that computers and their PhD-designed algorithms perform 70 to 90% of the trading on any given day.
Technical analysis is another dead end. The computers do all the modeling, sampling and trading, as speeds no human can possibly compete. And, for the most part, the computers aren't all that smart. They chase momentum, and today's action, on a diagonal line from left to right, with about a 12-15% incline, is the perfect textbook example of just how broken our equity markets have become.
Buying and selling stocks for profit, gain, retirement, "investment" is old-school and strictly for geezers with nothing but time (and money) on their hands or the completely clueless who can't see the forest for the trees, failing to grasp the obvious point that the HFTs have such an enormous advantage, individuals have no hope of making gains. They will be ground down by untimely, surprise market convulsions and endless fees. The last lost decade on the S&P and NASDAQ should be proof enough.
I suppose what I'm trying to say is that one can do all the analysis and homework and use all the tools offered by the online brokerages, watch CNBC all day long, read Barron's, the Wall Street Journal, BusinessWeek, Forbes, Fortune and read all the right blogs (including this one) and still be completely clueless as to what's really going on down in lower Manhattan.
It's a losing game (BTW: I never did execute the put buys that I mentioned last week, being that the premiums were ridiculous and the chances of the market doing the rational thing and selling off are probably less than 50/50) and anyone who's invested in stocks should have sold them already and moved into gold, silver or hard assets. Personally, I gave up in 2007, when the market turned south and haven't returned, except to have a couple Gs taken from me during the 09-10 rally on options trades.
One realistically could do better betting on horses or football rather than playing in the rigged casino that is Wall Street. Unfortunately for anyone with a pension or 401k plan, you don't have that choice. Somebody does the trading for you - a concept I never could quite wrap my mind around - and your money is stuck wherever your fund manager decides it should go, and they haven't done much better lately, either.
So, I've decided today to try and change the tone here, to offer real world solutions that don't involve stocks, because, personally, and deep in my heart, I don't believe stocks are currently good investment vehicles - not in this environment and not until a lot of Wall Street crooks go to jail or the way markets function and are regulated is radically altered.
There are ways to get around owning stocks that can provide savings and maybe a little bit of sleep at night and I'll strive to unearth these gems while still providing some commentary on the hijinks of the privileged few who make their money on Wall Street while the vast majority of Americans work, save and struggle to make everyday expenses, which, by the way, just keep going up.
I'll still do the market recap and rerun the data on a daily basis, but the thrust of this blog will be - in addition to informing on the various scams and practices that make Wall Street a dead end for most people - will be on ways to make, accumulate and save money and assets, because I believe Wall Street is history and today's fantastic rise on extremely low volume proves my point.
I'll also probably go back to writing in the third person singular, once my pique of angst has subsided.
A couple of interesting articles appeared over the weekend, specifically, Grecthen Morgenson's NY Tmes piece, titled, The Rescue That Missed Main Street and Karl Denninger's screeching commentary from Friday on the illiquid equity markets.
Dow 11,539.25, +254.71 (2.26%)
NASDAQ 2,562.11, +82.26 (3.32%)
S&P 500 1,210.08, +33.28 (2.83%)
NYSE Composite 7,450.30, +204.48 (2.82%)
As expected, advancing issues smothered decliners, 5825-854, a 7:1 ratio. The NASDAQ showed 26 new highs and 30 new lows, while the NYSE reported 30 new highs and 9 new lows, flipping the indicator to positive for the first time in about three weeks (another sign of the fraud) at 56 new highs and 39 new lows. Volume, as mentioned above, was dismal.
NASDAQ Volume 1,598,409,000
NYSE Volume 4,101,816,000
Front-end crude oil futures gained $1.70, to $87.27, to the delight of only those who don't drive or buy consumer goods. Precious metals were slapped down again, with gold losing $41.50, to $1787.60 and silver getting hosed to the tune of a 68-cent loss, to $40.82.
Folks should start looking for credit card offers in the mail from the big banks. I received two from Citi offering 0% interest for 21 months, oddly almost the same time frame offered by the Federal Reserve with their ZIRP on federal funds. They will be coming your way and a good idea is to wait until you've received three or four before applying.
Once you do, make sure to transfer any large balances on high-interest cards over to Zero interest and start paying it down as fast as possible. The best way to keep yourself in the game and prospering is to pay down any and all debt as quickly as possible and live within one's means.
You'll notice right away that I'm using first person singular rather then the usual third person tense usually employed on this blog, and the reason for that has to do with the absurd trading pattern exhibited on the major indices today, the Monday after the great storm Irene that wasn't so great, and the first trading day after the also-not-so-great Fed Chairman Ben Bernanke's Jackson Hole speech.
I'm speaking for myself, as a human being, because what trading on Wall Street has become - with the advent of co-located servers and HFTs - is definitely not anything that can be analyzed using old methodologies. Throw out the old P/E models; earnings per share are also meaningless now that computers and their PhD-designed algorithms perform 70 to 90% of the trading on any given day.
Technical analysis is another dead end. The computers do all the modeling, sampling and trading, as speeds no human can possibly compete. And, for the most part, the computers aren't all that smart. They chase momentum, and today's action, on a diagonal line from left to right, with about a 12-15% incline, is the perfect textbook example of just how broken our equity markets have become.
Buying and selling stocks for profit, gain, retirement, "investment" is old-school and strictly for geezers with nothing but time (and money) on their hands or the completely clueless who can't see the forest for the trees, failing to grasp the obvious point that the HFTs have such an enormous advantage, individuals have no hope of making gains. They will be ground down by untimely, surprise market convulsions and endless fees. The last lost decade on the S&P and NASDAQ should be proof enough.
I suppose what I'm trying to say is that one can do all the analysis and homework and use all the tools offered by the online brokerages, watch CNBC all day long, read Barron's, the Wall Street Journal, BusinessWeek, Forbes, Fortune and read all the right blogs (including this one) and still be completely clueless as to what's really going on down in lower Manhattan.
It's a losing game (BTW: I never did execute the put buys that I mentioned last week, being that the premiums were ridiculous and the chances of the market doing the rational thing and selling off are probably less than 50/50) and anyone who's invested in stocks should have sold them already and moved into gold, silver or hard assets. Personally, I gave up in 2007, when the market turned south and haven't returned, except to have a couple Gs taken from me during the 09-10 rally on options trades.
One realistically could do better betting on horses or football rather than playing in the rigged casino that is Wall Street. Unfortunately for anyone with a pension or 401k plan, you don't have that choice. Somebody does the trading for you - a concept I never could quite wrap my mind around - and your money is stuck wherever your fund manager decides it should go, and they haven't done much better lately, either.
So, I've decided today to try and change the tone here, to offer real world solutions that don't involve stocks, because, personally, and deep in my heart, I don't believe stocks are currently good investment vehicles - not in this environment and not until a lot of Wall Street crooks go to jail or the way markets function and are regulated is radically altered.
There are ways to get around owning stocks that can provide savings and maybe a little bit of sleep at night and I'll strive to unearth these gems while still providing some commentary on the hijinks of the privileged few who make their money on Wall Street while the vast majority of Americans work, save and struggle to make everyday expenses, which, by the way, just keep going up.
I'll still do the market recap and rerun the data on a daily basis, but the thrust of this blog will be - in addition to informing on the various scams and practices that make Wall Street a dead end for most people - will be on ways to make, accumulate and save money and assets, because I believe Wall Street is history and today's fantastic rise on extremely low volume proves my point.
I'll also probably go back to writing in the third person singular, once my pique of angst has subsided.
A couple of interesting articles appeared over the weekend, specifically, Grecthen Morgenson's NY Tmes piece, titled, The Rescue That Missed Main Street and Karl Denninger's screeching commentary from Friday on the illiquid equity markets.
Dow 11,539.25, +254.71 (2.26%)
NASDAQ 2,562.11, +82.26 (3.32%)
S&P 500 1,210.08, +33.28 (2.83%)
NYSE Composite 7,450.30, +204.48 (2.82%)
As expected, advancing issues smothered decliners, 5825-854, a 7:1 ratio. The NASDAQ showed 26 new highs and 30 new lows, while the NYSE reported 30 new highs and 9 new lows, flipping the indicator to positive for the first time in about three weeks (another sign of the fraud) at 56 new highs and 39 new lows. Volume, as mentioned above, was dismal.
NASDAQ Volume 1,598,409,000
NYSE Volume 4,101,816,000
Front-end crude oil futures gained $1.70, to $87.27, to the delight of only those who don't drive or buy consumer goods. Precious metals were slapped down again, with gold losing $41.50, to $1787.60 and silver getting hosed to the tune of a 68-cent loss, to $40.82.
Folks should start looking for credit card offers in the mail from the big banks. I received two from Citi offering 0% interest for 21 months, oddly almost the same time frame offered by the Federal Reserve with their ZIRP on federal funds. They will be coming your way and a good idea is to wait until you've received three or four before applying.
Once you do, make sure to transfer any large balances on high-interest cards over to Zero interest and start paying it down as fast as possible. The best way to keep yourself in the game and prospering is to pay down any and all debt as quickly as possible and live within one's means.
Sunday, August 28, 2011
Paradigm Shift in Advertising
The hipster intellectual of the 1960s, Marshall McLuhan, had a wealth of opinions about media and advertising, so much so that his famous phrase, "the medium is the message," became the buzzwords for a generation of great advertising companies through the latter half of the 20th century.
McLuhan also once opined, "Advertising is an environmental striptease for a world of abundance."
If he's right, and he probably is, 21st century advertising is already proving to be a show Cirque du Soleil would be hard-pressed to replicate. With the merging of the technologies of radio, print, TV, the internet, mobile devices and social media, it's of paramount importance today to not only get the message right, but the media as well.
To do so, most companies look for an established Advertising Agency with a track record of successful campaigns, an edgy dynamic and useful understanding of all media technologies.
A print ad in a local newspaper or a radio drive time spot just doesn't cut it anymore, now that people's attention is being diverted not only by television, but by catchy internet sites and messaging through Facebook, Twitter and other social media.
That's why it's important for businesses to seek out not only the best and the brightest, but an agency that "gets it," or, as That! Advertising Agency puts it, one which "gets THAT!"
A continuing shift from the traditional to digital advertising creates an environment perfectly suited to this company, experts not only in creative and placement, but also in the fields of marketing, public relations, design and all of the new media, from the social networks to targeted, trackable internet campaigns.
Today's ad agency has to have focus and vision, plus a background in traditional print, TV and radio with a bent toward the wireless, digitized future.
McLuhan also once opined, "Advertising is an environmental striptease for a world of abundance."
If he's right, and he probably is, 21st century advertising is already proving to be a show Cirque du Soleil would be hard-pressed to replicate. With the merging of the technologies of radio, print, TV, the internet, mobile devices and social media, it's of paramount importance today to not only get the message right, but the media as well.
To do so, most companies look for an established Advertising Agency with a track record of successful campaigns, an edgy dynamic and useful understanding of all media technologies.
A print ad in a local newspaper or a radio drive time spot just doesn't cut it anymore, now that people's attention is being diverted not only by television, but by catchy internet sites and messaging through Facebook, Twitter and other social media.
That's why it's important for businesses to seek out not only the best and the brightest, but an agency that "gets it," or, as That! Advertising Agency puts it, one which "gets THAT!"
A continuing shift from the traditional to digital advertising creates an environment perfectly suited to this company, experts not only in creative and placement, but also in the fields of marketing, public relations, design and all of the new media, from the social networks to targeted, trackable internet campaigns.
Today's ad agency has to have focus and vision, plus a background in traditional print, TV and radio with a bent toward the wireless, digitized future.
Friday, August 26, 2011
Bernanke Speaks, But Who's Buying the Rally?
As expected, Fed Chairman Ben Bernanke gave his highly-anticipated speech at Jackson Hole, Wyoming this morning and did not outline any further Federal Reserve policies - specifically another round of quantitative easing (QE) - that would have signaled not only a weak, struggling economy, but more easy money for bankers, stock traders and the like.
Not that money isn't easy already. The Fed, in its last policy statement earlier this month, specifically stated that they would keep federal funds rates at close to zero until the middle of 2013. In the simplest of terms, the cost of money can't get any lower than zero, so any other stimulative motions would have - as have the last two rounds of QE - essentially been throwing good money after bad.
Wall Street's reaction to the Chairman's relaxed posture on monetary policy was not unexpected, but still a bit obtuse. After falling off precipitously in early trading (the Dow registered a 200+ point loss), stocks gathered momentum, went positive and ended the day - and the week - with broad gains. The only factor missing from the upside move was volume. Today's rally, like many which preceded it during the days of QE2, was rather muffled.
Two events, an ocean apart, will likely have major impacts moving forward into Monday. The Greece rescue plan has run into some turbulence, as Greece has set terms for the level of private participation and Euro nations spar and debate collateral obligations from the Greeks, now that Finland and Austria have secured such from the Greek government.
Along the Eastern coast of the United States, shorelines were being evacuated as Hurricane Irene meanders toward the Mid-Atlantic states of South and North Carolina, Virginia, Maryland and Delaware. The sizable storm is expected to make landfall on Saturday at North Carolina's Outer Banks and proceed with a bee-line path toward the major metropolitan areas of Philadelphia, Northern New Jersey, New York and Boston.
Expected to raise water levels with a storm surge of as much as 20 feet, Irene has the potential to bring devastation to some of the most populated areas of the country.
Traders didn't seem to make much of such turbulent conditions in both the weather and the global economy. They also shrugged off the decline in the second estimate of GDP, from 1.3% to 1.0%, which was announced prior to the opening bell. The University of Michigan's consumer confidence index also rose slightly, from 54.9 to 55.7, but, like Bernanke's speech, the news seemed unimportant.
As it turned out, the major indices put in their first winning week in the last five, a hopeful sign that the averages have encountered only a correction and have not fallen back into bear market territory, even though there's quite a bit of chatter about a resumption of the recession, muted growth prospects and a subtle notion that the FOMC will announce some policy directions at their September meeting, possibly to include some form of monetary easing.
Dow 11,284.54, +134.72 (1.21%)
NASDAQ 2,479.85, +60.22 (2.49%)
S&P 500 1,176.80, +17.53 (1.51%)
NYSE Composite 7,245.82, +96.15 (1.34%)
Despite the exceedingly low volume, advancers slaughtered decliners, 5258-1302. NASDAQ new highs numbered just nine (9), with 106 making new lows. On the NYSE, there were 13 new highs, but 101 new lows. The combined totals of 22 new highs and 207 new lows continue to suggest further downside developments.
NASDAQ Volume 1,860,127,125
NYSE Volume 4,936,341,500
Oil was relatively unchanged for the second straight day, with WTI crude futures posting a gain of just seven cents, closing out the week at $85.37.
Gold roared back against the margin hikes and central bank shorting, posting a wicked gain of $56.20, boosting the price per ounce back to $1827.50. Silver continued its bounce, up 22 cents, to $41.34.
With stocks and precious metals both rising on the day, one questions which group of speculators has the market sentiment measured correctly as the two asset groups are usually polar opposites.
As long as there's more debt being created to pay back already soured debt, you can bet the gold bugs and silver eagles have it right.
Not that money isn't easy already. The Fed, in its last policy statement earlier this month, specifically stated that they would keep federal funds rates at close to zero until the middle of 2013. In the simplest of terms, the cost of money can't get any lower than zero, so any other stimulative motions would have - as have the last two rounds of QE - essentially been throwing good money after bad.
Wall Street's reaction to the Chairman's relaxed posture on monetary policy was not unexpected, but still a bit obtuse. After falling off precipitously in early trading (the Dow registered a 200+ point loss), stocks gathered momentum, went positive and ended the day - and the week - with broad gains. The only factor missing from the upside move was volume. Today's rally, like many which preceded it during the days of QE2, was rather muffled.
Two events, an ocean apart, will likely have major impacts moving forward into Monday. The Greece rescue plan has run into some turbulence, as Greece has set terms for the level of private participation and Euro nations spar and debate collateral obligations from the Greeks, now that Finland and Austria have secured such from the Greek government.
Along the Eastern coast of the United States, shorelines were being evacuated as Hurricane Irene meanders toward the Mid-Atlantic states of South and North Carolina, Virginia, Maryland and Delaware. The sizable storm is expected to make landfall on Saturday at North Carolina's Outer Banks and proceed with a bee-line path toward the major metropolitan areas of Philadelphia, Northern New Jersey, New York and Boston.
Expected to raise water levels with a storm surge of as much as 20 feet, Irene has the potential to bring devastation to some of the most populated areas of the country.
Traders didn't seem to make much of such turbulent conditions in both the weather and the global economy. They also shrugged off the decline in the second estimate of GDP, from 1.3% to 1.0%, which was announced prior to the opening bell. The University of Michigan's consumer confidence index also rose slightly, from 54.9 to 55.7, but, like Bernanke's speech, the news seemed unimportant.
As it turned out, the major indices put in their first winning week in the last five, a hopeful sign that the averages have encountered only a correction and have not fallen back into bear market territory, even though there's quite a bit of chatter about a resumption of the recession, muted growth prospects and a subtle notion that the FOMC will announce some policy directions at their September meeting, possibly to include some form of monetary easing.
Dow 11,284.54, +134.72 (1.21%)
NASDAQ 2,479.85, +60.22 (2.49%)
S&P 500 1,176.80, +17.53 (1.51%)
NYSE Composite 7,245.82, +96.15 (1.34%)
Despite the exceedingly low volume, advancers slaughtered decliners, 5258-1302. NASDAQ new highs numbered just nine (9), with 106 making new lows. On the NYSE, there were 13 new highs, but 101 new lows. The combined totals of 22 new highs and 207 new lows continue to suggest further downside developments.
NASDAQ Volume 1,860,127,125
NYSE Volume 4,936,341,500
Oil was relatively unchanged for the second straight day, with WTI crude futures posting a gain of just seven cents, closing out the week at $85.37.
Gold roared back against the margin hikes and central bank shorting, posting a wicked gain of $56.20, boosting the price per ounce back to $1827.50. Silver continued its bounce, up 22 cents, to $41.34.
With stocks and precious metals both rising on the day, one questions which group of speculators has the market sentiment measured correctly as the two asset groups are usually polar opposites.
As long as there's more debt being created to pay back already soured debt, you can bet the gold bugs and silver eagles have it right.
Is Working Hard an Optimal Concept?
Ever since the Middle Ages, the world's productivity and moral value have been guided by the invisible hand of the Protestant or Puritan Work Ethic.
Imbued with the values of hard labor and fair pay, the work ethic fomented the great industrial revolution of the 19th and 20th centuries and the rise of monolithic corporations and big government.
With the advance of technology, however, mostly in the past 40 years, the traditional role of labor as capital has been slowly evolving, as machines and computers do much of the heavy lifting and human toil has been reduced significantly. These changes, slow as they may be, have reduced the general value of human labor to a point at which lower and middle classes struggle to keep pace with inflating costs of living.
Thus, human labor, once the hallmark of strong economies, has been reduced as an integral part of the capital/money creating machine of capitalism to a point at which it may be becoming a mere antecedent to the cycle of many productive enterprises.
That is why authors such as Timothy Ferriss have garnered such a huge and expanding following. Ferriss, the founder of the principle known as the "4-Hour Workweek" and author of the 2007 book by the same name and numerous other life-enhancing, labor-shortening ideas (Ferris maintains a blog which promotes many novel tips, concepts and ideas) seeks to maximize human potential while minimizing actual work hours.
The best part of his conceptualization of working smarter, not longer or harder, sets a new paradigm for the structure of society into the 21st century, emphasizing preparation and design to work beyond the utility of brute force.
Ferriss' writings belong on the must-read list of every worker, leader and entrepreneur, alongside such well-intentioned tomes as Dr. Laurence J. Peter and Raymond Hull's "The Peter Principle" and Adam Smith's "The Wealth of Nations."
Anyone seeking to thrive in today's fast-changing economic landscape would be well advised to look into the principles and guidelines which Ferriss continues to promote.
Imbued with the values of hard labor and fair pay, the work ethic fomented the great industrial revolution of the 19th and 20th centuries and the rise of monolithic corporations and big government.
With the advance of technology, however, mostly in the past 40 years, the traditional role of labor as capital has been slowly evolving, as machines and computers do much of the heavy lifting and human toil has been reduced significantly. These changes, slow as they may be, have reduced the general value of human labor to a point at which lower and middle classes struggle to keep pace with inflating costs of living.
Thus, human labor, once the hallmark of strong economies, has been reduced as an integral part of the capital/money creating machine of capitalism to a point at which it may be becoming a mere antecedent to the cycle of many productive enterprises.
That is why authors such as Timothy Ferriss have garnered such a huge and expanding following. Ferriss, the founder of the principle known as the "4-Hour Workweek" and author of the 2007 book by the same name and numerous other life-enhancing, labor-shortening ideas (Ferris maintains a blog which promotes many novel tips, concepts and ideas) seeks to maximize human potential while minimizing actual work hours.
The best part of his conceptualization of working smarter, not longer or harder, sets a new paradigm for the structure of society into the 21st century, emphasizing preparation and design to work beyond the utility of brute force.
Ferriss' writings belong on the must-read list of every worker, leader and entrepreneur, alongside such well-intentioned tomes as Dr. Laurence J. Peter and Raymond Hull's "The Peter Principle" and Adam Smith's "The Wealth of Nations."
Anyone seeking to thrive in today's fast-changing economic landscape would be well advised to look into the principles and guidelines which Ferriss continues to promote.
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