Are Stocks Good? Precious Metals Bad?

If one has been paying attention to both equity and commodity markets the past few days, one would note a dramatic divergence between precious metals commodities - particularly gold and silver - and stocks. Yesterday, all asset classes were attacked to the downside, but today, the precious metals took it on the chin while the stock markets melted up nicely on horrific, dull, low volume. Silver actually finished a bit higher, but was ground down today as low as $26.20, before rocketing up on short covering.

Once again, there was nothing triggering either the rally in stocks nor the sell-off in gold and silver. Sure enough, oil was relatively flat, meaning that what the overlords of finance would like one to believe is that gold and silver are risky and not valued investments, while paper assets such as stocks and crude oil futures are good for one's portfolio.

This is while the Fed is printing money like it actually was backed by something other than the "full faith and credit of the US government" and the nations of Europe cannot continue to carry on the socialist policies that have bankrupted many a nation much longer.

In normal times, selling off gold or silver to buy stocks would be pure speculative folly, and even in these unusual days of collapsing currencies, indecision and wild market swings, it still qualifies as a bad idea, even moreso.

The reason for the disparity between the precious metals is that the big banks, along with central bankers, actually wish to hoard gold and silver, but, as is their normal practice, don't want to pay market rates. Thus, they manipulate the price of the two metals down through the various ETFs, particularly, GLD and SLV. Such manipulation has continued for some time. In the case of gold, there is documentation that the downward manipulation has been in place for 30 or 40 years. It's only in the past decade that demand for gold has outstripped the banking cartel's ability to suppress it, but they're certainly back at it with gusto over the past few months, having the CME (post-MF Global) in their back pocket.

The truth is somewhere in between. Taken from the long-standing perspective that this blog has maintained over the past four years running, the breakdown of asset classes goes something like this: gold, silver, tools of trades, working transportation devices (cars, trucks, bikes), raw land and paid-in-full residences: GOOD. Any paper asset, excepting actual currency to meet regular expenses: NOT SO GOOD.

Tomorrow, being the last trading day of the year, we'll look at how our predictions for 2011 fared and offer a glimpse into the financial future with some quick takes on 2012.

Dow 12,287.04, +135.63 (1.12%)
NASDAQ 2,613.74, +23.76 (0.92%)
S&P 500 1,263.01, +13.37 (1.07%)
NYSE Composite 7,482.42, +85.43 (1.15%)
NASDAQ Volume 995,351,250
NYSE Volume 2,229,853,250
Combined NYSE & NASDAQ Advance - Decline: 4292-1394
Combined NYSE & NASDAQ New highs - New lows: 143-111
WTI crude oil: 99.65, +0.29
Gold: 1,540.90, -23.20
Silver: 27.32, +0.08

HBO GO

Written by Fermin Washington

Since we looked into wireless internet providers Minneapolis and chose a provider with a fast connection, we have been able to access HBO Go. HBO GO is a service that they provide if you subscribe to HBO through your cable service. It is basically like an HBO on Demand. You can watch any episode from any HBO show ever made. It doesn’t matter if the show is current or not. I have recently gotten into watching “The Sopranos”. It is about a modern day crime boss in New Jersey that has a family. It takes the scariness out of the mob and places them in suburbia. It was a hit show on HBO for a long time, but I never got a chance to watch it. Now that I can stream it on television, I am hooked. It is awesome. Last weekend my husband and I ended up watching the whole second season. We had watched the first season over the three previous weekends. We ended up not having a lot to do. It was a great relaxing weekend.

Lower Euro, Strong Dollar Sink Risk Assets

Following the lowest volume trading day of the year, stocks headed South as European bourses opened for the first time since last Friday, and, as is the usual case whenever europe becomes a focal point, stocks and commodities fell out of bed right at the open and continued to slide throughout the session.

The Euro hit the low for the year against the US dollar, checking in at an exchange rate of 1 Euro = 1.29416 US Dollar. Put another way, the US dollar was stronger than its been all year against the currency of choice (well, hardly a choice, rather an edict) on the Continent.

With so many hedgies short the dollar - a big mistake in some quarters - stocks looked too rich for most of the few remaining souls still trading in 2011. Being long the Euro is like thinking you'll start a camp fire in the middle of a hurricane. It simply goes against all logic, but that is the prevailing thinking of the investor class. May they lose all of their gains by Friday.

The lack of trading volume on Wall Street did not materially detract from the impulse to sell anything and just about everything. Oil, gold and silver all fell along with equities. All 30 Dow components finished the day in negative territory.

Oil eased off quite a bit as threats coming from Iran began sounding more like posturing than actual escalation, the general feeling being that the US military, if need be, would open the Strait of Hormuz in a matter of days if the Iranians eventually do try to shut down oil shipping lanes. Even for a nation as politically polarized as Iran, a general stoppage of oil shipping out of the Persian Gulf would be suicidal, though suicide is not out of the question when it comes to Iran.

Whether the US and its UN allies decide to impose sanctions and embargo Iran's oil shipments, which go primarily to India, China and points East is a matter the leaders have left open until the New Year, after Iran concludes its military exercises in the area.

Dow 12,151.41, -139.94 (1.14%)
NASDAQ 2,589.98, -35.22 (1.34%)
S&P 500 1,249.64, -15.79 (1.25%)
NYSE Composite 7,396.99, -111.38 (1.48%)
NASDAQ Volume 1,063,998,750
NYSE Volume 2,349,797,500
Combined NYSE & NASDAQ Advance - Decline: 1138-4556
Combined NYSE & NASDAQ New highs - New lows: 138-123
WTI crude oil: 99.36, -1.98
Gold: 1,564.10, -31.40
Silver: 27.23, -1.51

Nothing Happening on Wall Street as Holidays Wind Down; Sears First Christmas Casualty

The three-day Christamas holiday was a welcome break, but, for the traders, bankers, swindlers and everybody who isn't a teacher or member of the US congress, Tuesday was back-to-work day.

Not that it mattered much on Wall Street. On what looks - at first glance - to be the lowest-volume full session trading day of the year, stocks were essentially flat, trading in a tight range which had the Dow down as much as 24 points and up only about 34 points.

So, advice for this week is to watch as much football as possible, don't eat too many leftovers and forget the rigged, stupid markets. If today's trading is to serve as any indication, they aren't going anywhere until January.

One noteworthy item in today's news is worth mentioning, however, that being the imminent demise of one of America's iconic store brands, Sears Holdings (SHLD), the parent company for over 4,000 US and Canadian Sears and K-Mart stores, announced this morning that it would be closing 100-120 stores due to poor performance during the holdiays season.

This is nothing new for Sears/K-Mart, but if they eventually close only 100-120 stores, that would be something of a surprise. By this time next year, we could all be reminiscing over how the Sears bankruptcy (again) and the closings of 2000 stores was one of the top stories of 2012. Their credit lines are tight and, if there's any hint of a slowdown in the first half of 2012, they could be pulled or frozen, leaving the company very thin indeed.

Shares of Sears Holding were hammered without mercy, the stock losing 27% on the day (33.38, -12.47). SHLD traded as high as 82 and change near the end of October. Obviously, this was something some people knew a bit about.

Yep, the people running Sears and K-Mart into the ground (Target, Macy's, Wal-Mart, among others) is just what the US economy needs right about now: another wave of retail layoffs.

Also making headlines and jacking up the price of oil back over $100 today was more sabre-rattling from Iran, which has been conducting military exercises around the Strait of Hormuz since Christmas Eve, and today said that they would halt the flow of oil if foreign sanctions were imposed on its crude exports because of its nuclear ambitions. Well, we all know what europe and the US thinks of that. Get ready for $5.00 per gallon gas if the morons in Washington and Brussels continue on their failed policy path. Presidential candidate Ron Paul says that US policies are what makes people around the world hate America. He has a very valid point and should be the Republican nominee on his anti-war/foreign policy stance alone.

January is already setting up to be a real loser for stocks. Start shorting selected retailers (GAP comes to mind). The Christmas season is winding down and there's nothing on the horizon to make people want to shop more. At least the weather hasn't been horrible, which is great for humans, but bad for companies which sell coats, hats and winter wear, as well as being brutal on ski resorts.

Al Gore? Paging the promoter of global warming. 2012 could be your best year yet.

Dow 12,291.35, -2.65 (0.02%)
NASDAQ 2,625.20, +6.56 (0.25%)
S&P 500 1,265.43, +0.10 (0.01%)
NYSE Composite 7,508.33, -10.33 (0.14%)
NASDAQ Volume 942,962,875
NYSE Volume 2,034,548,000
Combined NYSE & NASDAQ Advance - Decline: 2829-2797
Combined NYSE & NASDAQ New highs - New lows: 272-78
WTI crude oil: 101.34, +1.66
Gold: 1,595.50, -10.50
Silver: 28.74, -0.34

Merry Christmas Traders, Winners, Losers and Sitters

Stocks extended the Santa Claus Rally on the last trading day before Christmas, as there was light trading and not a peep out of Europe, which seems to have settled down after the ECB generously granted about $639 billion in loans to over 500 banks in the region. Additionally, many European stock exchanges and all US stock exchanges will be closed On Monday, in observance of Christmas (which actually falls on Sunday).

A couple of sets of economic data were released prior to Friday's open. Durable Goods Orders showed a 3.8% gain in November, but the number was drastically reduced when transportation was excluded, knocking the gain down to a disappointing 0.3%. Also troubling was the lowered capital spending by businesses, which was down for the second month in a row.

Personal income and personal spending showed gains of 0.1%, both disappointments.

According to the Commerce Dept. new home sales for November were up 1.6%, to an annualized rate of 315,000, an all-time low, coming after last year's dismal showing of 323,000 new homes sold. The small gain pushed the number of new homes on the market to an all time low as home builders have found few takers and even fewer who could qualify for mortgages.

In conjunction with the existing home sales from the National Association of Realtors (NAR) that came out on Wednesday, the housing market continues to show the damage done by the 2008 financial collapse and the now-five-year-long housing bust. The NAR also revised their existing home sales figures from 2007 to 2010 down 14.3%, citing errors in the collection of data, including double listings, a decline in for sale by owners and house flipping.

November sales rose 4% from the previous month and 12.2% from a year ago, though the figures are now much lower than what was previously expected. With the revisions, the NAR acknowledged that the housing slump has been longer and deeper than previously thought.

And, in Washington, the Republican House backed down and decided ot pass the stupid two-month extension of the social security contribution reduction. Good Grief!

Merry Christmas and good night.

Dow 12,294.00, +124.35 (1.02%)
NASDAQ 2,618.64, +19.19 (0.74%)
S&P 500 1,265.33, +11.33 (0.90%)
NYSE Composite 7,518.66, +57.91 (0.78%)
NASDAQ Volume 970,584,500
NYSE Volume 2,226,056,500
Combined NYSE & NASDAQ Advance - Decline: 3491-2108
Combined NYSE & NASDAQ New highs - New lows: 193-42
WTI crude oil: 99.68, +0.15
Gold: 1,606.00, -4.60
Silver: 29.08, +0.04