Let's face it. There's no easy way for europe to fix the mess they've created without a lot of pain, including bank failures, a massive, long-term deflationary depression, government overthrows and the near disintegration of the Euro-zone, those countries which exclusively use the Euro as currency.
After last week's up-and-down Thursday and Friday sessions, marked by trepidation over the ECB's interest rate cut and a demure stance on monetary policy by new ECB head, Mario Draghi, and Friday's euphoric rally on the umpteenth outline of a Euro solution, Monday turned just plain ugly for European bourses and US indices.
Anybody who understands the enormity of debt that's been built up by Europe and the US - not only in the government, but by the banks, financial institutions and households as well - sees no end to the crisis in Europe, and the distinct probability that their problems - being partly those of our own banks and our Federal Reserve - will become ours. The massive overhang of public debt, much of it owing to national pension funds like Social Security, has always been an albatross around the necks of European leaders and now it is quickly becoming one for whoever leads the US (Take your pick from Obama, the banks or the congress. None of them are doing a good job.).
And while Social Security is set to run in the red for another year (this being the first), what are congress and the president fighting over? Whether to cut the Social Security contribution paid by employees and/or add a tax on the wealthy. The fact that the latest boondoggle is being branded as "payroll tax" - a wholly incorrect moniker - tells exactly how deep and severe the US fiscal condition has become.
If the government big-wigs actually came clean on the issue and said they want to cut Social Security contributions so people can afford to buy food, gas and maybe the occasional iPad or plasma TV, the cat would be out of the bag, permanently.
As it stands today, Social Security is DOA. Current beneficiaries can expect payments though the next five years, maybe, but, eventually, there's not enough money going into the system to support the huge numbers of upcoming recipients from the Baby Boom generation, most of whom have less than $40,000 saved for retirement (Hint: that's not enough), and cutting contributions is going in exactly the wrong direction.
On Capitol Hill, most senior congress-people know that Social Security will have to be substantially changed in order to survive and the changes will have to be dramatic measures, like raising the retirement age to 70 or 72, means testing, so that people who don't need it won't get it, and raising the limit of contributions from the current first $106,800 of income to something more realistic, like the first $200,000 of income.
Making high-earners pay more would add more money to the SS coffers at the same time the government is cutting the percentage take from employees. Still, most of the measures even considered by congress and the White House are nothing more than stop-gap measures designed to satiate the masses until the next big election, in November, 2012.
In the meantime, the economy continues to struggle along, unless one is inclined to take their lead from the ruthless bankers on Wall Street and cheat like crazy, paying people off the books, under-reporting income and generally skirting the IRS at every turn. Hey, the big corporations do it, so why not everyone else.
At the bottom of all the financial malaise is the collapse of government, as we've witnessed in the Middle east and North Africa, is now spreading to Europe and Russia, and thanks to people actually taking change of their own lives and their own finances, is quickly gaining ground here in the USA.
There is one way to stem the crisis in the United States. Elect Ron Paul president. The mainstream media is currently dancing around Dr. Paul, whose positions have been consistent and poisonous to the status quo, but there's no doubt mainstream America is listening to the 76-year-old Texan, as he continue to gain ground in Iowa and elsewhere.
Compared to the current leaders, Newt Gingrich and Mitt Romney, a Ron Paul - Michelle Bachmann ticket is sure beginning to look like a winner.
When Americans ask themselves, "which of the Republican candidates are most like us?" the answer becomes obvious.
BTW: Volume was so low today that the markets could have closed at noon and hardly anyone would have noticed. Even fewer would have cared. That's what happens when trust flees markets. People, and money, follow out the door.
The Euro hit a two-month low against the US Dollar, below 1.32. The end of the Euro is coming, and sooner than anyone dares think.
Dow 12,021.39, -162.87 (1.34%)
NASDAQ 2,612.26, -34.59 (1.31%)
S&P 500 1,236.47, -18.72 (1.49%)
NYSE Composite 7,363.49, -139.39 (1.86%)
NASDAQ Volume 1,523,045,375
NYSE Volume 3,421,469,750
Combined NYSE & NASDAQ Advance - Decline: 1272-4386
Combined NYSE & NASDAQ New highs - New lows: 79-120 (flipped to red)
WTI crude oil: 97.77 -1.64 (head back to 80-85 range)
Gold: 1,668.20 -48.60 (deflation signal)
Silver: 31.00, -1.25
Monday, December 12, 2011
Friday, December 9, 2011
European Crisis Summit Outlines Plans, Markets Reverse Course
After lengthy deliberations which reportedly lasted well into the evening, European leaders emerged with the outline of a fiscal union designed to maintain the current structure of the EU and the Euro-zone nations which use the Euro as currency.
Left out of the plan was Great Britain, which said it would not succumb to another layer of regulations from the Eu, especially since it still has the British Pound as its sovereign currency.
One highlight was the decision to cap the new permanent rescue fund at 500 billion euros.
Additionally, European central banks will lend 150 billion euros to the International Monetary Fund’s (IMF) general resources. Non-euro EU states will offer around 50 billion euros to the IMF. Having the central banks on board is a new development that was widely cheered by market participants as it should encourage sovereigns outside of europe to pitch in to an IMF fund as well.
Details of the complex plan and new treaty language are expected to be finalized by March, leaving plenty of time for intrigue and dissent in the interim.
Stocks in Europe were higher, with the French, German and UK markets scoring the largest gains. In the US, the effect of the summit was a reversal of the previous day's losses, resulting in a negligible net gain or loss over the two days market players had been anticipating with some anxiety.
So, after all the drama over Thursday's ECB policy meeting and the Friday's EU summit, the end result after two days of nail-biting was a 12-point loss for the Dow Industrials, about two points down on the NASDAQ and a six point loss on the S&P. Indeed, it was all much ado about nothing with the major averages ending the week with marginal gains.
Everyone on and off Wall Street can now get back to doing whatever they do until the next European crisis event, which, if recent history is any guide, should be some time next week.
Dow 12,184.26 186.56 (1.55%)
NASDAQ 2,646.85 50.47 (1.94%)
S&P 500 1,255.19 20.84 (1.69%)
NYSE Compos 7,502.88 133.36 (1.81%)
NASDAQ Volume 1,651,333,125.00
NYSE Volume 3,698,613,000
Combined NYSE & NASDAQ Advance - Decline: 4746-907
Combined NYSE & NASDAQ New highs - New lows: 141-67
WTI crude oil: 99.41, +1.07
Gold: 1,716.80, +3.40
Silver: 32.25, +0.72
Left out of the plan was Great Britain, which said it would not succumb to another layer of regulations from the Eu, especially since it still has the British Pound as its sovereign currency.
One highlight was the decision to cap the new permanent rescue fund at 500 billion euros.
Additionally, European central banks will lend 150 billion euros to the International Monetary Fund’s (IMF) general resources. Non-euro EU states will offer around 50 billion euros to the IMF. Having the central banks on board is a new development that was widely cheered by market participants as it should encourage sovereigns outside of europe to pitch in to an IMF fund as well.
Details of the complex plan and new treaty language are expected to be finalized by March, leaving plenty of time for intrigue and dissent in the interim.
Stocks in Europe were higher, with the French, German and UK markets scoring the largest gains. In the US, the effect of the summit was a reversal of the previous day's losses, resulting in a negligible net gain or loss over the two days market players had been anticipating with some anxiety.
So, after all the drama over Thursday's ECB policy meeting and the Friday's EU summit, the end result after two days of nail-biting was a 12-point loss for the Dow Industrials, about two points down on the NASDAQ and a six point loss on the S&P. Indeed, it was all much ado about nothing with the major averages ending the week with marginal gains.
Everyone on and off Wall Street can now get back to doing whatever they do until the next European crisis event, which, if recent history is any guide, should be some time next week.
Dow 12,184.26 186.56 (1.55%)
NASDAQ 2,646.85 50.47 (1.94%)
S&P 500 1,255.19 20.84 (1.69%)
NYSE Compos 7,502.88 133.36 (1.81%)
NASDAQ Volume 1,651,333,125.00
NYSE Volume 3,698,613,000
Combined NYSE & NASDAQ Advance - Decline: 4746-907
Combined NYSE & NASDAQ New highs - New lows: 141-67
WTI crude oil: 99.41, +1.07
Gold: 1,716.80, +3.40
Silver: 32.25, +0.72
Thursday, December 8, 2011
European Mess Smashes Stocks; How Treasury Secretary Hank Paulson Screwed America
Yesterday in this space, an ancient Wall Street adage was invoked: "Never short a dull market."
We fairly dismissed the idea that, since the US market was basically on hold until the Europeans meet, greet and decide the economic fate of the continent, US stocks would wallow in hopeless delusion, because the Europeans, somewhat like our very own beloved congress, seem incapable of walking and chewing gum at the same time.
Most of them could not get arrested at a bong party, either, but the various inabilities of the ruling elite are not a primary concern. What they're doing to your money, your economic present and future, are.
And they're making a god-awful mess of it.
Just before US markets opened, the ECB announced a rate cut of 25 basis points (0.25%) to one percent, which was annoying to the majority of traders, who, as always, wanted more. A 50 bip reduction would have satiated their appetite for freer money for the while, but the ECB also announced that they would be extending loans of up to 36 months (that's three years for the mathematically-inept) to banks on the continent.
That was met with some enthusiasm, but within minutes, newly-appointed ECB president Mario Draghi dashed hopes at the press conference, claiming that the rate cut vote was not unanimous, signaling a lack of conviction on the part of ECB participants.
Stocks plummeted at the open in the US and only partially recovered late in the day as news leaks from the EU summit meeting beginning tomorrow indicated that a fiscal pact would be pursued by EU member nations, but even that news was short-lived as the major indices closed near the lows of the day.
Europe has become the focal point of global equity and commodity trading as it grapples with the potential for debt contagion among sovereign states and bank failures across the European Union. While difficulties in Europe may not directly affect the economy of the United States and other countries, it will have a pass-through effect, as pain anywhere in the global financial system is felt - to varying degrees - everywhere else.
Hope is now high that the crisis summit - a macabre circus in its own right - will produce some lasting, positive resolution, but the more one looks at the condition of Europe, the less one believes that there will be a positive conclusion short of destroying the Euro as a currency, an outcome that may have more benefits than downsides.
Until tomorrow, at least, stocks took a beating, as once again, the bulk of traders were hoping for positive results from another gang that can't shoot straight.
While on the topic of governments and their follies and foibles, an article by John Crudele in the NY Post should be at the top of the discussion of just how corrupt and obnoxious Wall Street has been and continues to be.
Crudele has been saying for two years that Paulson and other elements of the government were corrupt. In today's story, he finally gets confirmation from Bloomberg Markets that then-Secretary of the Treasury Hank Paulson was passing along insider tips to his buddies at Goldman Sachs (where he had served as CEO prior to being named to head Treasury by President Bush) and others.
Crudele says:
That's all one needs to know about how tightly intertwined Wall Street and top officials of the federal government are intertwined, but it brings up an essential question, or questions: Where are NBC, CBS, CNBC, ABC, FOX on this story, and why hasn't Attorney General Eric Holder announced an investigation?
The answers are simple. Bit players like Martha Stewart and Rob Blogojeich go to jail. Fat-ass scum-bags like Hank Paulson, the architect of TARP and god-knows how many other deceitful financial scams sail off into retirement sunset.
No wonder there is an ugly undercurrent of dissatisfaction and distrust in America. The people at the top have been screwing the public for years, yet not a single one is even investigated. Instead, we are subjected to daily wild market swings and the spectacle of former congressman, former New Jersey governor Jon Corzine explaining to a congressional panel how he didn't know what was going on while his firm, MF Global, raided the coffers of client money to the tune of $1.2 billion.
Corzine won't see the inside of a prison; that you can count on. Neither will Hank Paulson. But some ghetto kid who sells a bag of weed because it's the only way he can make a buck, will receive the full extent of what now humorously is called "justice" in America.
Face it, people, with the thieves and connivers we have in government, we're all royally screwed and the wake-up call is probably a few decades too late.
Thanks to John Crudele and the NY Post for his ground-breaking and tireless reporting efforts. It's amazing he hasn't been fired yet.
And seriously, isn't Ron Paul the only Republican presidential candidate that is electable? The others are either pandering flip-floppers (Gingrich, Romney) or wing-nuts (Santorum, Cain, Bachman, Perry). That leaves only Mr. Paul nd Jon Huntsman as viable candidates. But the mainstream media, which relies upon access to the corrupt political machines running the country, will have no part of either of them.
The best advice is to ignore all of them and fend - as best one can - for oneself and one's family, but, eventually, unless the liars, cheaters and thieves of Wall Street and Washington are rooted out and made to pay for their crimes, America is doomed.
Dow 11,997.70, -198.67 (1.63%)
NASDAQ 2,596.38, -52.83 (1.99%)
S&P 500 1,234.35, -26.66 (2.11%)
NYSE Composite 7,369.52, -190.19 (2.52%)
NASDAQ Volume 1,843,290,125
NYSE Volume 4,222,942,000
Combined NYSE & NASDAQ Advance - Decline: 774-4842
Combined NYSE & NASDAQ New highs - New lows: 100-89
WTI crude oil: 98.34, -2.15
Gold: 1,713.40, -31.40
Silver: 31.54, -1.09
We fairly dismissed the idea that, since the US market was basically on hold until the Europeans meet, greet and decide the economic fate of the continent, US stocks would wallow in hopeless delusion, because the Europeans, somewhat like our very own beloved congress, seem incapable of walking and chewing gum at the same time.
Most of them could not get arrested at a bong party, either, but the various inabilities of the ruling elite are not a primary concern. What they're doing to your money, your economic present and future, are.
And they're making a god-awful mess of it.
Just before US markets opened, the ECB announced a rate cut of 25 basis points (0.25%) to one percent, which was annoying to the majority of traders, who, as always, wanted more. A 50 bip reduction would have satiated their appetite for freer money for the while, but the ECB also announced that they would be extending loans of up to 36 months (that's three years for the mathematically-inept) to banks on the continent.
That was met with some enthusiasm, but within minutes, newly-appointed ECB president Mario Draghi dashed hopes at the press conference, claiming that the rate cut vote was not unanimous, signaling a lack of conviction on the part of ECB participants.
Stocks plummeted at the open in the US and only partially recovered late in the day as news leaks from the EU summit meeting beginning tomorrow indicated that a fiscal pact would be pursued by EU member nations, but even that news was short-lived as the major indices closed near the lows of the day.
Europe has become the focal point of global equity and commodity trading as it grapples with the potential for debt contagion among sovereign states and bank failures across the European Union. While difficulties in Europe may not directly affect the economy of the United States and other countries, it will have a pass-through effect, as pain anywhere in the global financial system is felt - to varying degrees - everywhere else.
Hope is now high that the crisis summit - a macabre circus in its own right - will produce some lasting, positive resolution, but the more one looks at the condition of Europe, the less one believes that there will be a positive conclusion short of destroying the Euro as a currency, an outcome that may have more benefits than downsides.
Until tomorrow, at least, stocks took a beating, as once again, the bulk of traders were hoping for positive results from another gang that can't shoot straight.
While on the topic of governments and their follies and foibles, an article by John Crudele in the NY Post should be at the top of the discussion of just how corrupt and obnoxious Wall Street has been and continues to be.
Crudele has been saying for two years that Paulson and other elements of the government were corrupt. In today's story, he finally gets confirmation from Bloomberg Markets that then-Secretary of the Treasury Hank Paulson was passing along insider tips to his buddies at Goldman Sachs (where he had served as CEO prior to being named to head Treasury by President Bush) and others.
Crudele says:
Under former Treasury Secretary Hank Paulson, confidential government information was regularly leaked to select people on Wall Street.
That's all one needs to know about how tightly intertwined Wall Street and top officials of the federal government are intertwined, but it brings up an essential question, or questions: Where are NBC, CBS, CNBC, ABC, FOX on this story, and why hasn't Attorney General Eric Holder announced an investigation?
The answers are simple. Bit players like Martha Stewart and Rob Blogojeich go to jail. Fat-ass scum-bags like Hank Paulson, the architect of TARP and god-knows how many other deceitful financial scams sail off into retirement sunset.
No wonder there is an ugly undercurrent of dissatisfaction and distrust in America. The people at the top have been screwing the public for years, yet not a single one is even investigated. Instead, we are subjected to daily wild market swings and the spectacle of former congressman, former New Jersey governor Jon Corzine explaining to a congressional panel how he didn't know what was going on while his firm, MF Global, raided the coffers of client money to the tune of $1.2 billion.
Corzine won't see the inside of a prison; that you can count on. Neither will Hank Paulson. But some ghetto kid who sells a bag of weed because it's the only way he can make a buck, will receive the full extent of what now humorously is called "justice" in America.
Face it, people, with the thieves and connivers we have in government, we're all royally screwed and the wake-up call is probably a few decades too late.
Thanks to John Crudele and the NY Post for his ground-breaking and tireless reporting efforts. It's amazing he hasn't been fired yet.
And seriously, isn't Ron Paul the only Republican presidential candidate that is electable? The others are either pandering flip-floppers (Gingrich, Romney) or wing-nuts (Santorum, Cain, Bachman, Perry). That leaves only Mr. Paul nd Jon Huntsman as viable candidates. But the mainstream media, which relies upon access to the corrupt political machines running the country, will have no part of either of them.
The best advice is to ignore all of them and fend - as best one can - for oneself and one's family, but, eventually, unless the liars, cheaters and thieves of Wall Street and Washington are rooted out and made to pay for their crimes, America is doomed.
Dow 11,997.70, -198.67 (1.63%)
NASDAQ 2,596.38, -52.83 (1.99%)
S&P 500 1,234.35, -26.66 (2.11%)
NYSE Composite 7,369.52, -190.19 (2.52%)
NASDAQ Volume 1,843,290,125
NYSE Volume 4,222,942,000
Combined NYSE & NASDAQ Advance - Decline: 774-4842
Combined NYSE & NASDAQ New highs - New lows: 100-89
WTI crude oil: 98.34, -2.15
Gold: 1,713.40, -31.40
Silver: 31.54, -1.09
Wednesday, December 7, 2011
US Markets Stalled Out, Waiting for Europe's Next Gambit
There's an old Wall Street adage that goes something like, "don't short a dull market," but, if this market goes any higher and gets any duller, the adage might as well be thrown out along with most long positions in stocks.
After Tuesday's snooze-fest, Wednesday's market was even sleepier, with participation at low ebb. Volume has nearly completely dried up, but the thin trading has reduced volatility somewhat. In fact, the VIX, which measures implied volatility in the S&P 500, hasn't pitched above 30 (an abnormally high level to begin with) since November 30, or one week ago.
What traders are most concerned with is once again Europe, but more specifically, the two days of meetings scheduled in Europe, one by the ECB, tomorrow, and the other a crisis summit of leaders of the Euro-zone nations on Friday that is hoped to pave the way toward an end of the two-year-old debt crisis that has gripped European markets and locked down US markets for the past two days.
As is the usual case with relying on Europe to fix our own stock market, it's probably a bad idea. Some leading economists of the region, particularly those from Germany, who have the best view of the situation, are saying that whatever solutions come out of this week's crisis summit, Europe's problems are likely to remain contentious for another eighteen months to two years.
Noting that, and understanding that debt issues which took decades to produce are not going to be solved at one meeting (it has been promised before and not been delivered), so one has to question both the positioning in US stocks, which have been essentially flat since the middle of August, and the reliability of ancient words of wisdom in an era that has been marked by unusual actions from the Fed and other central banks in developed countries.
If everybody's waiting on Europe, just what do they expect? A grand plan which all 17 countries that use the Euro as currency can agree to? Good luck with that. European leaders are now calling for majority consensus rather than unanimity. Meanwhile the ratings agencies, specifically Standard & Poor's, are scaring the daylights out of each and every one of them, threatening credit rating downgrades across the continent if there's no substantial progress come Friday.
What this telegraphed sucker punch from S&P is saying is more political than economic, essentially telling all of Europe to stop playing around the periphery and get to the core of the matter, which would entail some countries (think Spain, Portugal, Italy and Greece) having to give up some degree of sovereignty in order to remain in the good graces of the European Union and the ECB. And while fiscal unity, or, at least some semblance of fiscal responsibility would be a step in the right direction, the citizenry of those countries might not take lightly to having new masters above their own elected leaders somewhere in Germany, Brussels or France.
Since the crisis meeting isn't until Friday, that's probably when US markets might perk up, but, if the game plan remains the same in Europe - promise much, deliver little - they will be sending a message to markets around the world that the issues present are too large, too diverse and too complex for all 17 Euro-zone nations to reach agreement on any unifying principles laid down.
In that scenario, we may just get another two days of slumber on the street as even more participants make a premature exit from stocks in 2011, fleeing to cash or bonds until the dust settles after the holidays.
And what about that Santa Claus rally that usually commences over the final two weeks of the year? There may be one, but it won't have much gusto on low volume and it's not likely to last long. Stocks are already creeping back toward their late July - early August levels and there's just not enough economic "juice" in the system for which a rally can be sustained. The major US indices have flirted recently with the flat line for the year and that's probably where they're going to remain.
Meanwhile, all one can do is hold one's breath waiting for Europe's next move. Everyone is waiting to exhale.
Dow 12,196.37, +46.24 (0.38%)
NASDAQ 2,649.21, -0.35 (0.01%)
S&P 500 1,261.01, +2.54 (0.20%)
NYSE Composite 7,559.71, +20.39 (0.27%)
NASDAQ Volume 1,654,001,000
NYSE Volume 4,158,213,000
Combined NYSE & NASDAQ Advance - Decline: 2804-2747
Combined NYSE & NASDAQ New highs - New lows: 119-63
WTI crude oil: 100.49, -0.79
Gold: 1,744.80, +13.00
Silver: 32.63, -0.12
After Tuesday's snooze-fest, Wednesday's market was even sleepier, with participation at low ebb. Volume has nearly completely dried up, but the thin trading has reduced volatility somewhat. In fact, the VIX, which measures implied volatility in the S&P 500, hasn't pitched above 30 (an abnormally high level to begin with) since November 30, or one week ago.
What traders are most concerned with is once again Europe, but more specifically, the two days of meetings scheduled in Europe, one by the ECB, tomorrow, and the other a crisis summit of leaders of the Euro-zone nations on Friday that is hoped to pave the way toward an end of the two-year-old debt crisis that has gripped European markets and locked down US markets for the past two days.
As is the usual case with relying on Europe to fix our own stock market, it's probably a bad idea. Some leading economists of the region, particularly those from Germany, who have the best view of the situation, are saying that whatever solutions come out of this week's crisis summit, Europe's problems are likely to remain contentious for another eighteen months to two years.
Noting that, and understanding that debt issues which took decades to produce are not going to be solved at one meeting (it has been promised before and not been delivered), so one has to question both the positioning in US stocks, which have been essentially flat since the middle of August, and the reliability of ancient words of wisdom in an era that has been marked by unusual actions from the Fed and other central banks in developed countries.
If everybody's waiting on Europe, just what do they expect? A grand plan which all 17 countries that use the Euro as currency can agree to? Good luck with that. European leaders are now calling for majority consensus rather than unanimity. Meanwhile the ratings agencies, specifically Standard & Poor's, are scaring the daylights out of each and every one of them, threatening credit rating downgrades across the continent if there's no substantial progress come Friday.
What this telegraphed sucker punch from S&P is saying is more political than economic, essentially telling all of Europe to stop playing around the periphery and get to the core of the matter, which would entail some countries (think Spain, Portugal, Italy and Greece) having to give up some degree of sovereignty in order to remain in the good graces of the European Union and the ECB. And while fiscal unity, or, at least some semblance of fiscal responsibility would be a step in the right direction, the citizenry of those countries might not take lightly to having new masters above their own elected leaders somewhere in Germany, Brussels or France.
Since the crisis meeting isn't until Friday, that's probably when US markets might perk up, but, if the game plan remains the same in Europe - promise much, deliver little - they will be sending a message to markets around the world that the issues present are too large, too diverse and too complex for all 17 Euro-zone nations to reach agreement on any unifying principles laid down.
In that scenario, we may just get another two days of slumber on the street as even more participants make a premature exit from stocks in 2011, fleeing to cash or bonds until the dust settles after the holidays.
And what about that Santa Claus rally that usually commences over the final two weeks of the year? There may be one, but it won't have much gusto on low volume and it's not likely to last long. Stocks are already creeping back toward their late July - early August levels and there's just not enough economic "juice" in the system for which a rally can be sustained. The major US indices have flirted recently with the flat line for the year and that's probably where they're going to remain.
Meanwhile, all one can do is hold one's breath waiting for Europe's next move. Everyone is waiting to exhale.
Dow 12,196.37, +46.24 (0.38%)
NASDAQ 2,649.21, -0.35 (0.01%)
S&P 500 1,261.01, +2.54 (0.20%)
NYSE Composite 7,559.71, +20.39 (0.27%)
NASDAQ Volume 1,654,001,000
NYSE Volume 4,158,213,000
Combined NYSE & NASDAQ Advance - Decline: 2804-2747
Combined NYSE & NASDAQ New highs - New lows: 119-63
WTI crude oil: 100.49, -0.79
Gold: 1,744.80, +13.00
Silver: 32.63, -0.12
Tuesday, December 6, 2011
Equities Drift, Then Rally on More False Hope from Europe
Following events in Europe's ongoing credit crisis is becoming counter-productive and in many ways, simply stupid.
Today's duller-than-usual session (and that's saying a lot, because it's been pretty dull the past few days) caught a bit of fire mid-afternoon when the Financial Times reported that European leaders were considering a permanent fund with which to deal with sovereign debt issues in addition to the "temporary" EFSF. The new, European Stability Mechanism (ESM) is proposed to come on line mid-2012 and roughly double the firepower Euro financiers will have to deal with any exploding budgets in Euro-zone countries.
While that's all well and good, it's yet another proposal - not anything concrete - from the foot-draggers across the pond who have neither the wherewithal, the money, nor the will to effectively deal with their generational debt issues. Still, Wall Streeters wait with baited breath on every syllable from European leaders as though they are all that matters here in the United States.
The truth is that Europe's problems are large, but America's may prove to be much larger. Besides, stocks moving up and down on the whims of our friends on the continent has little to do with fundamental strength or weakness of individual stocks traded on US markets. While it's almost a certainty that Europe will enter a recession early in 2012, companies doing business over there will adjust, but the situation is not getting materially better.
To think that just throwing more money at their problems, or, the mention of throwing said money, raises stocks in the US on a correlation trade of a stronger Euro and a weaker US dollar is simplistic as well as not rooted in reality. If Europe is headed for a recession, their currency should weaken and US officials should welcome the relative strengthening of the US dollar, though it's become quite clear that Mr. Bernanke and Mr. Geithner see things differently than the rest of US. Their future and the future of the US economy has been and continues to be predicated on a continually weakening US dollar, a condition that eventually is ruinous to our economy and probably that of many other developed nations.
The Europe-watching-and-waiting needs to come to a head, an end, a conclusion, though it's probably not in the cards any time soon.
The farce of 21st century economics continues, it should be noted, on extremely low volume.
Dow 12,150.13, +52.30 (0.43%)
NASDAQ 2,649.56, -6.20 (0.23%)
S&P 500 1,258.47, +1.39 (0.11%)
NYSE Composite 7,539.32, +8.31 (0.11%)
NASDAQ Volume 1,495,232,875
NYSE Volume 3,732,697,000
Combined NYSE & NASDAQ Advance - Decline: 2659-2918
Combined NYSE & NASDAQ New highs - New lows: 111-58
WTI crude oil: 101.28, +0.29
Gold: 1,731.80, -2.70
Silver: 32.74, +0.37
Today's duller-than-usual session (and that's saying a lot, because it's been pretty dull the past few days) caught a bit of fire mid-afternoon when the Financial Times reported that European leaders were considering a permanent fund with which to deal with sovereign debt issues in addition to the "temporary" EFSF. The new, European Stability Mechanism (ESM) is proposed to come on line mid-2012 and roughly double the firepower Euro financiers will have to deal with any exploding budgets in Euro-zone countries.
While that's all well and good, it's yet another proposal - not anything concrete - from the foot-draggers across the pond who have neither the wherewithal, the money, nor the will to effectively deal with their generational debt issues. Still, Wall Streeters wait with baited breath on every syllable from European leaders as though they are all that matters here in the United States.
The truth is that Europe's problems are large, but America's may prove to be much larger. Besides, stocks moving up and down on the whims of our friends on the continent has little to do with fundamental strength or weakness of individual stocks traded on US markets. While it's almost a certainty that Europe will enter a recession early in 2012, companies doing business over there will adjust, but the situation is not getting materially better.
To think that just throwing more money at their problems, or, the mention of throwing said money, raises stocks in the US on a correlation trade of a stronger Euro and a weaker US dollar is simplistic as well as not rooted in reality. If Europe is headed for a recession, their currency should weaken and US officials should welcome the relative strengthening of the US dollar, though it's become quite clear that Mr. Bernanke and Mr. Geithner see things differently than the rest of US. Their future and the future of the US economy has been and continues to be predicated on a continually weakening US dollar, a condition that eventually is ruinous to our economy and probably that of many other developed nations.
The Europe-watching-and-waiting needs to come to a head, an end, a conclusion, though it's probably not in the cards any time soon.
The farce of 21st century economics continues, it should be noted, on extremely low volume.
Dow 12,150.13, +52.30 (0.43%)
NASDAQ 2,649.56, -6.20 (0.23%)
S&P 500 1,258.47, +1.39 (0.11%)
NYSE Composite 7,539.32, +8.31 (0.11%)
NASDAQ Volume 1,495,232,875
NYSE Volume 3,732,697,000
Combined NYSE & NASDAQ Advance - Decline: 2659-2918
Combined NYSE & NASDAQ New highs - New lows: 111-58
WTI crude oil: 101.28, +0.29
Gold: 1,731.80, -2.70
Silver: 32.74, +0.37
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