The Markets
Once the August Non-Farm Payroll report was out, US equities were as good as done. The BLS reported - for the first time since February, 1945 - that no new jobs were created in the month. That's right. Zero. None. Squat.
Adding to the general jobs plight and blight in the US, July and June gains were revised lower. July was down to 85,000 from 117,000 previously reported and June figures showed that employers added just 20,000 jobs in June, not 46,000, for a net loss of 58,000 jobs from previously-believed figures.
Off of that kind of defining news on the economy, stocks dove at the open and stayed down all day long, finishing near their lows.
The other major market mover was news that the Federal Home Finance Agency (FHFA) - the agency tasked with overseeing the conservatorship of Fannie Mae and Freddie Mac - was in the process of suing as many as 17 major banks over faulty underwriting on - you guessed it, didn't you? - soured mortgage backed securities (MBS). This news was breaking all day, though details were trickling in at the market's closing bell.
The banks being sued were Bank of America, Merrill Lynch (a subsidiary of BofA) for $22.4 Billion, Citigroup, Barklays, Nomura, among others.
Dow 11,240.26, -253.31 (2.20%)
NASDAQ 2,480.33, -65.71 (2.58%)
S&P 500 1,173.97, -30.45 (2.53%)
NYSE Composite 7,250.73, -192.73 (2.59%)
NASDAQ Volume 1,582,149,000
NYSE Volume 4,363,518,500
Combined NYSE & NASDAQ advance-decline: 1075-5448
Combined NYSE & NASDAQ New highs - New lows: 20-147
NYMEX WTI crude oil futures: 86.45, -2.48
Gold: 1882.50, +57.10
Silver: 43.25, +1.75
The big winners on the day were the prudent and astute conservative investors holding gold and silver, both of which were boosted significantly as the fear of a looming recession rises and problems in Europe escalate over the second Greek bailout.
Basically, anybody who doesn't believe either a) we're already in a recession; b) the first recession never actually ended; or c) we're about to go into a recession, simply has not been paying attention, or, is paying attention to the globalist media's consistent pleadings that the economy is doing just fine.
With the nitwits in Washington more intent on getting re-elected than fixing real problems, the United States, and by inference, the rest of the world is sinking deeper and deeper into a global depression which likely won't be resolved without drastic measures (war, currency debasement, bank failures on a grandiose scale).
With that in mind, let's party the three-day weekend away with the following:
IDEA: Don't Google it, Bing it!
Most of us use Google for searches, but Bing is better. Not only does Bing offer more options, better video and image coverage, but they have a rewards program by which users can accumulate points and eventually redeem them for some nice items (it takes a while, but if you search a lot, they add up).
What does Google offer besides a lot of ads next to search results? Nothing.
Try Bing. It's better.
Friday, September 2, 2011
Thursday, September 1, 2011
Stocks Down in Advance of August NFP Numbers
The Markets
All of the major indices ended well into the red on Thursday, and for good reason. Initial Unemployment Claims came in at 409,000 for the most recent reporting period, and that number will be revised higher (as it always is) next week.
Here's the kicker. Continuing claims came in at 3735K, well higher than last week's reported 3641K, though that number was revised higher, to - get this - 3753K, which is 112,000 more. So, one would think, "gee, that continuing claims number is down 18,000 this week," but one would be wrong, because this week's continuing claims number will no doubt be revised higher next week.
The fact that the Bureau of Labor Statistics (BLS), which compiles these reports, is so god-awful bad at keeping numbers straight causes consternation, not only in investors, but it spreads to reporters, analysts and eventually, consumers, who are forced to digest whatever the government decides to barf up on any given week.
No wonder consumer confidence and overall approval ratings for congress and the president are so dismally low. The statistics they present are scarcely believable.
The government also reported that second quarter productivity fell by 0.7% (Should we believe this? Were a lot of people Facebooking instead of working?), while unit labor costs rose by 3.3%. That last number is not believable. How, pray tell, can labor costs rise when the economy is stalled out and unemployment is rampant? It goes against the grain of all accepted business wisdom. In a soft labor market, wages stagnate or decline, and especially so when productivity drops.
The takeaway from this is that either we have a bunch of numbskulls running American businesses (not likely, though at the top of the chain, maybe) or American businesses are about to meet a serious margin squeeze, from higher raw materials and higher labor costs. While the latter argument makes a little bit of sense on the surface, we're reminded that the figures are from te government and thus, highly suspect, and, it's an amalgamation across industries. The truth is somewhere in between: certain sectors of the economy are going to be harmed, soon.
That was all the markets dealt with before the bell. As usual, they shrugged it off to some degree, and stocks sank in the early going, until the August ISM index came out with a reading of 50.6 at 10:00 am EDT and produced the most interesting market response of the day (maybe the week). The Dow, for instance, which was down about 35 points, did a 120-point about face and made what would be the highs of the day within minutes (like two or three, seriously). The computers were whizzing, for sure.
The amusing aspect of the market's rise on this number is that the 50.6 number is not very good and was down from an unrevised 50.9 in July. But the market was looking for 48.5, which would have set off alarms, because anything under 50 on the ISM signals contraction, i.e., recession. So, we're not going into a recession unless, um, productivity falls off, or maybe costs rise, or orders slow, or the ISM revises that 50.6 to 49.9 next month?
Don't breath hard on any economic data. You might cause a recession.
But, that was it. Everything was downhill the rest of the session, especially after Goldman Sachs cut their August non-farm payroll estimate in half, from a gain of 50,000 jobs to just 25,000, right around noon. Everything fell off the table at that point.
Considering that job growth of 50,000 for August would, in and of itself, be a horrible number, half of that is terrifyingly bad, and so, we can only expect a major sell-off should Goldman's forecast be even close to the mark. It should be noted that Goldman Sachs has a horrible record on predicting the NFP number, so there's some hope that they're wrong, though not much.
Dow 11,493.57, -119.96 (1.03%)
NASDAQ 2,546.04, -33.42 (1.30%)
S&P 500 1,204.42, -14.47 (1.19%)
NYSE Composite 7,443.46, -84.93 (-1.13%)
NASDAQ Volume 1,771,030,250
NYSE Volume 4,722,466,000
Combined NYSE & NASDAQ Advance - Decline: 1643-4877
Combined NYSE & NASDAQ New Highs - New Lows: 54-38
WTI crude oil futures: 88.93, +0.12
Gold: 1826.30, +2.10
Silver: 41.59, +0.08
Comment: Today the fire was lit on the pile of rubble collected on Wall Street. Tomorrow's NFP number, if it's anything under 70,000, will be like gasoline. (MoneyDaily predicted +25-35,000 last week)
Idea: Grow your own.
There's literally nothing new about suggesting you grow some of your own vegetables in your own yard. The problem is that hardly anybody does so, we being conditioned by the Kleptocracy to buy all fresh produce from local supermarkets. Oddly enough, prices at roadside stands or farmer's markets have been roughly the same as in the supermarkets, though farmers tell us that may have been true early in the season, and should correct in September.
It's not as easy as just throwing down some seeds and watching them grow and later in the season picking the lush, juicy, ripe produce. It takes time, care and some good luck from Mother Nature. Ask any full-time farmer. It's work, but the results can be highly rewarding in good, fresh fruits and/or vegetables which costs almost nothing. The added benefit in tending to your own garden is that it gets one closer to nature, making one "grounded" so to speak.
Crops will grow almost anywhere in America. You only have to know which ones will grow best, and when, in your neck of the woods. The internet is a wealth of information on gardening.
Good luck.
All of the major indices ended well into the red on Thursday, and for good reason. Initial Unemployment Claims came in at 409,000 for the most recent reporting period, and that number will be revised higher (as it always is) next week.
Here's the kicker. Continuing claims came in at 3735K, well higher than last week's reported 3641K, though that number was revised higher, to - get this - 3753K, which is 112,000 more. So, one would think, "gee, that continuing claims number is down 18,000 this week," but one would be wrong, because this week's continuing claims number will no doubt be revised higher next week.
The fact that the Bureau of Labor Statistics (BLS), which compiles these reports, is so god-awful bad at keeping numbers straight causes consternation, not only in investors, but it spreads to reporters, analysts and eventually, consumers, who are forced to digest whatever the government decides to barf up on any given week.
No wonder consumer confidence and overall approval ratings for congress and the president are so dismally low. The statistics they present are scarcely believable.
The government also reported that second quarter productivity fell by 0.7% (Should we believe this? Were a lot of people Facebooking instead of working?), while unit labor costs rose by 3.3%. That last number is not believable. How, pray tell, can labor costs rise when the economy is stalled out and unemployment is rampant? It goes against the grain of all accepted business wisdom. In a soft labor market, wages stagnate or decline, and especially so when productivity drops.
The takeaway from this is that either we have a bunch of numbskulls running American businesses (not likely, though at the top of the chain, maybe) or American businesses are about to meet a serious margin squeeze, from higher raw materials and higher labor costs. While the latter argument makes a little bit of sense on the surface, we're reminded that the figures are from te government and thus, highly suspect, and, it's an amalgamation across industries. The truth is somewhere in between: certain sectors of the economy are going to be harmed, soon.
That was all the markets dealt with before the bell. As usual, they shrugged it off to some degree, and stocks sank in the early going, until the August ISM index came out with a reading of 50.6 at 10:00 am EDT and produced the most interesting market response of the day (maybe the week). The Dow, for instance, which was down about 35 points, did a 120-point about face and made what would be the highs of the day within minutes (like two or three, seriously). The computers were whizzing, for sure.
The amusing aspect of the market's rise on this number is that the 50.6 number is not very good and was down from an unrevised 50.9 in July. But the market was looking for 48.5, which would have set off alarms, because anything under 50 on the ISM signals contraction, i.e., recession. So, we're not going into a recession unless, um, productivity falls off, or maybe costs rise, or orders slow, or the ISM revises that 50.6 to 49.9 next month?
Don't breath hard on any economic data. You might cause a recession.
But, that was it. Everything was downhill the rest of the session, especially after Goldman Sachs cut their August non-farm payroll estimate in half, from a gain of 50,000 jobs to just 25,000, right around noon. Everything fell off the table at that point.
Considering that job growth of 50,000 for August would, in and of itself, be a horrible number, half of that is terrifyingly bad, and so, we can only expect a major sell-off should Goldman's forecast be even close to the mark. It should be noted that Goldman Sachs has a horrible record on predicting the NFP number, so there's some hope that they're wrong, though not much.
Dow 11,493.57, -119.96 (1.03%)
NASDAQ 2,546.04, -33.42 (1.30%)
S&P 500 1,204.42, -14.47 (1.19%)
NYSE Composite 7,443.46, -84.93 (-1.13%)
NASDAQ Volume 1,771,030,250
NYSE Volume 4,722,466,000
Combined NYSE & NASDAQ Advance - Decline: 1643-4877
Combined NYSE & NASDAQ New Highs - New Lows: 54-38
WTI crude oil futures: 88.93, +0.12
Gold: 1826.30, +2.10
Silver: 41.59, +0.08
Comment: Today the fire was lit on the pile of rubble collected on Wall Street. Tomorrow's NFP number, if it's anything under 70,000, will be like gasoline. (MoneyDaily predicted +25-35,000 last week)
Idea: Grow your own.
There's literally nothing new about suggesting you grow some of your own vegetables in your own yard. The problem is that hardly anybody does so, we being conditioned by the Kleptocracy to buy all fresh produce from local supermarkets. Oddly enough, prices at roadside stands or farmer's markets have been roughly the same as in the supermarkets, though farmers tell us that may have been true early in the season, and should correct in September.
It's not as easy as just throwing down some seeds and watching them grow and later in the season picking the lush, juicy, ripe produce. It takes time, care and some good luck from Mother Nature. Ask any full-time farmer. It's work, but the results can be highly rewarding in good, fresh fruits and/or vegetables which costs almost nothing. The added benefit in tending to your own garden is that it gets one closer to nature, making one "grounded" so to speak.
Crops will grow almost anywhere in America. You only have to know which ones will grow best, and when, in your neck of the woods. The internet is a wealth of information on gardening.
Good luck.
Wednesday, August 31, 2011
Battling the Kleptocracy - Part 1
Editor's Note: In an effort to provide some clarity for regular people (working types or entrepreneurs, with incomes under $100,000, often well under) on the rigors of the modern economy, this blog will devote itself in part to coverage of markets (stocks, bonds, commodities), but more to an understanding of how the US economy, since the 1980s, has become unfair to the middle class, biased against wage earners and how it promotes a gross inequality of class, income and privilege, favoring the ultra-wealthy.
It is the intent of the author to offer constructive advice to millions of Americans who unknowingly and unwittingly submit to this poorly-conceived construct of economy and methods and practices to thwart and escape the clutched of a debt-driven fiat money environment.
The "Battling the Kleptocracy" series shall be composed of posts containing two parts: first, an overview of the day's events on the markets; second, an informational section of practical ideas to help foster a counter-cultural movement away from the status quo.
The Markets
Despite the usual non-eventful numbers from the ADP private employment report (+91,000 for August, on expectations of 100K) and another downward drift in the Chicago Purchasing Managers' Report (PMI) reading of 56.5, from 58.8, stocks blew out in the morning and drifted lower throughout the day. Only a desperate, late rally saved the major indices from posting negative returns on the session.
Dow 11,613.53, +53.58 (0.46%)
NASDAQ 2,579.46, +3.35 (0.13%)
S&P 500 1,218.89, +5.97 (0.49%)
NYSE Composite 7,528.39, +64.39 (0.86%)
Combined NYSE/NASDAQ advance-decline: 3936-2651
Combined NYSE/NASDAQ new highs - new lows: 66-19
NASDAQ Volume 1,986,423,750
NYSE Volume 5,188,927,500
WTI crude oil futures: 88.85 -0.05
Gold: 1824.50 -10.60
Silver: 41.58 +0.23
Comment: Blah. The usual churn in the face of overwhelming debt pressure and stagnation in developed nations.
Idea: Get your money out of Bank of America
There once was a time when banks were trusted pillars of society, mostly local and involved in the communities they served. With the advent of computerization, globalization and the rise of a mendacious class of ultra-wealthy supra-nationalists, circa 1980, the repeal of Glass-Steagall (1999) and the overwhelming force of mass media and central bank control (Federal Reserve Act of 1913), the common notion that banks served communities was no longer valid.
Not to put too fine a point on it, but banks have probably always been rooted in deception and money-grubbing, but banking and legislative activity of the past 30 years provides an excellent background to the root evil of the Kleptocracy, which, loosely defined, is a societal/economic system which routinely skims wealth from those who least can afford it, to the benefit of those who need it the least.
In 2008, Bank of America, under the guidance of the since-discredited Ken Lewis, purchased Countrywide Financial Corporation, at the time the largest originator of residential mortgages in the United States.
Guided mainly by greed and without proper due diligence, Bank of America blundered into (or possibly under influence and threats from the Federal Reserve) what will go down in history as one of the worst corporate deals of all time. The purchase price for Countrywide was reported at $4.0 billion, though some analysts, notably those employed by Bloomberg, put the figure at $2.5 billion, as BofA was already carrying some of Countrywide's portfolio. The bank also purchased once-heralded brokerage firm, Merrill-Lynch, in another bad deal, at the height of the financial collapse of 2008, though that purchase is a topic for another time.
Countywide's portfolio of mortgages turned out to be so rotten, loaded with no-doc loans, NINJA (No Income No Job Application) loans and other variable-rate and exotic mortgage flavors that BofA soon had a mess on their hands, though the executives of the bank were loathe to mention that fact to shareholders. Thus, we experienced the sub-prime meltdown, the financial crisis and more, that continues to this day.
Bank of America was insolvent and only was salvaged via underhanded loans, guarantees and bond repurchases from the Federal Reserve. Their losses on soured mortgages are so deep and so broad, that even these infusions cannot and will not prevent Bank of America from falling into deep default at some point (probably already happened a few times already) and eventually being broken up or forced into bankruptcy.
The bank is the largest in the United States as measured by deposits, but the costs of litigation from the Countrywide deal will eventually sink it. The following are stories from just the past three days, with more to come.
It is advisable to pull all funds from Bank of America as quickly and as quietly as possible. They do not abide by any laws, much as a cornered wild animal might act in rash and irrational manners. They are doomed, and with them, other financial institutions will be ruined or significantly impaired. You do not have to face ruin along with them. Put your money in a local credit union or sound local or regional bank. Avoid other mega-banks like JP Morgan Chase, Wells-Fargo and Citi. They are part of the counterparty risk which will be destroyed when Bank of America falls off the shelf.
Bank of America hid the potential of an AIG lawsuit from regulators and investors, knowing about the possibility of an extensive and expensive legal undertaking, as far back as January of 2011.
CEO Brian Moynihan is selling off parts of the bank piecemeal in order to raise cash.
On Tuesday, Bank of America announced plans to shed another piece of its mortgage business.
The $8.5 billion settlement which the bank secured in federal court is being challenged on a number of fronts, including the FDIC, FHFA, a homeowner's group, the NY state Attorney General and even Goldman Sachs. The settlement was supposed to put to rest claims on over $170 billion in bad loans, but has since fallen apart due to these and other objections. Litigation, which BofA hoped to have settled in one fell swoop, will likely take years and add billions to the bank's continuing mortgage miasma.
Additionally, a 2008 ruling is being challenged by the state of Nevada which would void an agreement on loan modifications which Nevada officials say the bank did not honor.
And, just today, US Bancorp sued Bank of America for $1.75 billion over loans it purchased in 2005, citing faulty underwriting.
It is the intent of the author to offer constructive advice to millions of Americans who unknowingly and unwittingly submit to this poorly-conceived construct of economy and methods and practices to thwart and escape the clutched of a debt-driven fiat money environment.
The "Battling the Kleptocracy" series shall be composed of posts containing two parts: first, an overview of the day's events on the markets; second, an informational section of practical ideas to help foster a counter-cultural movement away from the status quo.
The Markets
Despite the usual non-eventful numbers from the ADP private employment report (+91,000 for August, on expectations of 100K) and another downward drift in the Chicago Purchasing Managers' Report (PMI) reading of 56.5, from 58.8, stocks blew out in the morning and drifted lower throughout the day. Only a desperate, late rally saved the major indices from posting negative returns on the session.
Dow 11,613.53, +53.58 (0.46%)
NASDAQ 2,579.46, +3.35 (0.13%)
S&P 500 1,218.89, +5.97 (0.49%)
NYSE Composite 7,528.39, +64.39 (0.86%)
Combined NYSE/NASDAQ advance-decline: 3936-2651
Combined NYSE/NASDAQ new highs - new lows: 66-19
NASDAQ Volume 1,986,423,750
NYSE Volume 5,188,927,500
WTI crude oil futures: 88.85 -0.05
Gold: 1824.50 -10.60
Silver: 41.58 +0.23
Comment: Blah. The usual churn in the face of overwhelming debt pressure and stagnation in developed nations.
Idea: Get your money out of Bank of America
There once was a time when banks were trusted pillars of society, mostly local and involved in the communities they served. With the advent of computerization, globalization and the rise of a mendacious class of ultra-wealthy supra-nationalists, circa 1980, the repeal of Glass-Steagall (1999) and the overwhelming force of mass media and central bank control (Federal Reserve Act of 1913), the common notion that banks served communities was no longer valid.
Not to put too fine a point on it, but banks have probably always been rooted in deception and money-grubbing, but banking and legislative activity of the past 30 years provides an excellent background to the root evil of the Kleptocracy, which, loosely defined, is a societal/economic system which routinely skims wealth from those who least can afford it, to the benefit of those who need it the least.
In 2008, Bank of America, under the guidance of the since-discredited Ken Lewis, purchased Countrywide Financial Corporation, at the time the largest originator of residential mortgages in the United States.
Guided mainly by greed and without proper due diligence, Bank of America blundered into (or possibly under influence and threats from the Federal Reserve) what will go down in history as one of the worst corporate deals of all time. The purchase price for Countrywide was reported at $4.0 billion, though some analysts, notably those employed by Bloomberg, put the figure at $2.5 billion, as BofA was already carrying some of Countrywide's portfolio. The bank also purchased once-heralded brokerage firm, Merrill-Lynch, in another bad deal, at the height of the financial collapse of 2008, though that purchase is a topic for another time.
Countywide's portfolio of mortgages turned out to be so rotten, loaded with no-doc loans, NINJA (No Income No Job Application) loans and other variable-rate and exotic mortgage flavors that BofA soon had a mess on their hands, though the executives of the bank were loathe to mention that fact to shareholders. Thus, we experienced the sub-prime meltdown, the financial crisis and more, that continues to this day.
Bank of America was insolvent and only was salvaged via underhanded loans, guarantees and bond repurchases from the Federal Reserve. Their losses on soured mortgages are so deep and so broad, that even these infusions cannot and will not prevent Bank of America from falling into deep default at some point (probably already happened a few times already) and eventually being broken up or forced into bankruptcy.
The bank is the largest in the United States as measured by deposits, but the costs of litigation from the Countrywide deal will eventually sink it. The following are stories from just the past three days, with more to come.
It is advisable to pull all funds from Bank of America as quickly and as quietly as possible. They do not abide by any laws, much as a cornered wild animal might act in rash and irrational manners. They are doomed, and with them, other financial institutions will be ruined or significantly impaired. You do not have to face ruin along with them. Put your money in a local credit union or sound local or regional bank. Avoid other mega-banks like JP Morgan Chase, Wells-Fargo and Citi. They are part of the counterparty risk which will be destroyed when Bank of America falls off the shelf.
Bank of America hid the potential of an AIG lawsuit from regulators and investors, knowing about the possibility of an extensive and expensive legal undertaking, as far back as January of 2011.
CEO Brian Moynihan is selling off parts of the bank piecemeal in order to raise cash.
On Tuesday, Bank of America announced plans to shed another piece of its mortgage business.
The $8.5 billion settlement which the bank secured in federal court is being challenged on a number of fronts, including the FDIC, FHFA, a homeowner's group, the NY state Attorney General and even Goldman Sachs. The settlement was supposed to put to rest claims on over $170 billion in bad loans, but has since fallen apart due to these and other objections. Litigation, which BofA hoped to have settled in one fell swoop, will likely take years and add billions to the bank's continuing mortgage miasma.
Additionally, a 2008 ruling is being challenged by the state of Nevada which would void an agreement on loan modifications which Nevada officials say the bank did not honor.
And, just today, US Bancorp sued Bank of America for $1.75 billion over loans it purchased in 2005, citing faulty underwriting.
Tuesday, August 30, 2011
A Wall Street Snoozer
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.
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.
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.
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