Friday the 13th was unlucky for most investors as stocks slipped over concerns of "imminent" credit downgrades in Europe and JP Morgan Chase's (JPM) quarterly results disappointed on revenue.
JP Morgan released 4th quarter and annual results prior to the opening bell sending related financial stocks into a tailspin.
JPM's earnings excluding items met expectations of 90 cents per share, a decrease from $1.12 per share in the year-earlier period, but full-year net income was $19 billion, down from $26.72 billion a year ago and well below analyst expectations of $23 billion. Quarterly net income was $3.72billion, down from $4.83 billion a year earlier.
JP Morgan was down 93 cents at the close, to 35.92, a loss of 2.52%.
It wasn't long after trading commenced in New York that news began leaking out, via Reuters, that many European nation's credit ratings were about to be downgraded by Standard & Poor's, which had put all 17 Eurozone nations on credit watch negative on December 5th.
The persistent rumors haunted european bourses, which fell dramatically on the news. Finally, after US markets closed in advance of a three-day weekend, S&P confirmed, dropping the credit ratings of nine countries, leaving only Germany with the gold-standard, AAA rating.
The following list, courtesy of London's daily Telegraph details the action:
France CUT one notch to AA+
Austria CUT one notch to AA+
Italy CUT two notches to BBB+
Spain CUT two notches to A
Portugal CUT two notches to BB (junk)
Belgium AFFIRMED at AA (the country was cut in November)
Malta CUT one notch to A-
Cyprus CUT one notch to BB+ (junk)
Luxembourg AFFIRMED at AAA
Germany AFFIRMED at AAA
Slovenia CUT one notch to A+
Slovakia CUT one notch to A
Ireland AFFIRMED at BBB+
The Netherlands AFFIRMED at AAA
Estonia AFFIRMED at AA-
All outlooks remain negative, except for Germany and Slovakia.
US stocks were crushed in the early going, but rallied throughout the afternoon, limiting losses. The Dow Jones Industrials were off by as much as 160 points in early going.
The Euro fell to its lowest level in 16 months vs. the US Dollar, at $1.2667, which is actually good news for European exporters and generally bad for US companies doing business in Europe.
Volume in US markets was weak (same old story) as participation levels have fallen off dramatically since the 08-09 financial crisis, many individual investors pulling money out of equities via funds and/or personal accounts. The low trading levels is somewhat of a bell-weather for the economy, mirror low participation rates in the labor force as Americans seek alternatives to both investment and traditional working roles.
The losses today pretty much cut the week's gains for the major indices in half. Stocks have been grinding higher through the first two weeks of the year, but there seems to be little conviction from traders.
Next week will be chock-full of earnings reports, many of which will meet or beat expectations, though the number of pre-announcements has been running unusually high for the 4th quarter and investors are nervous, as action in the financials and JP Morgan, in particular, made quite clear.
Also, Greek talks with creditors have broken down, leaving open the possibility that the proposed 50% voluntary haircuts on Greek debt would become involuntary, triggering credit default swaps payouts as early as March, when Greece is scheduled to receive another round of funding from the IMF and ECB.
Dow 12,422.06, -48.96 (0.39%)
NASDAQ 2,710.67, -14.03 (0.51%)
S&P 500 1,289.09, -6.41 (0.49%)
NYSE Composite 7,632.03, -49.23 (0.64%)
NASDAQ Volume 1,686,001,750
NYSE Volume 3,692,377,750
Combined NYSE & NASDAQ Advance - Decline: 1874-3682
Combined NYSE & NASDAQ New highs - New lows: 142-50
WTI crude oil: 98.70, -0.40
Gold: 1,630.80, -16.90
Silver: 29.52, -0.60
Friday, January 13, 2012
Thursday, January 12, 2012
Stocks Continue Relentless March Higher Despite Poor Economic Data
Once again, US equities finished the day on an upbeat tone, though data hardly suggests that the economy is either robust or growing rapidly. In fact, two releases prior to the market open were depressing enough to send stocks to morning lows out of the open.
Retail Sales for December were nothing short of a disaster, rising a mere 0.1% on expectations of a 0.4% boost, putting an end to the fiction that was widely spouted around financial circles, that holiday sales were brisk and consumers had their wallets wide open during the festive season.
Ex-autos, retail sales were even worse, down 0.2% (maybe those annoying Lexus Christmas commercials were good for something after all) on epectations of a 0.3% gain.
Business inventories were tighter, growing at a modest 0.3% in December after being up 0.8% in November. The drawdown during Christmas season will have consequences, especially involving calculations of 4th quarter 2011 GDP, and, if it continues, 1st quarter 2012 figures as well.
Perhaps the scariest number of the morning came from the wholly-discredited BLS, with their weekly report on initial unemployment claims, which came in much higher than the expected 375,000, bumping up to 399,000, which no doubt will be revised upward above 400,000 next week. From the data, it certainly seems to make sense that the BLS numbers are not properly seasonally-adjusted, and that many of those holiday season jobs were just that, seasonal, as in not permanent.
The uptake on the data is that American retailers are in deep trouble, consumers aren't about to rush out and buy just because they have a few extra dollars in their wallets or purses, and good, well-paying jobs are still on the horizon of imagination.
All of those assumptions did not deter Wall Street from boosting stock prices for the fifth time in eight trading sessions this new year. The reason would most likely be in the belief that Europe's debt crisis is all but solved, following an ECB announcement of no movement in interest rates and better-than-expected results in Spanish and Italian bond auctions. As usual, traders will hang their collective hats on any data that supports the cause of endless money printing and higher and higher stock prices, in the belief that a strong stock market is a good reflection of the overall economic picture, which is pure folly.
Large bankruptcies are on the rise, indicating a resumption of the financial fallout from 2008. With Kodak already on the ropes and possibly days away from a formal bankruptcy announcement, Hostess, the maker of Twinkies, Ding-Dongs and other high fructose snacks, filed bankruptcy on Wednesday.
The next victim is likely to be Sears Holdings. Lender CIT, the firm now headed by the nefarious John Thain, has made it clear that vendors to Sears and K-Mart will no longer receive financing or payment guarantees. Thain, who was the last CEO of Merrill Lynch before it was forced upon Bank of America, was one of the leading banking figures responsible for much of the 2008 financial crash.
Apparently, Thain has found new life as a vulture, now circling the bond holdings and other assets of Sears.
On the real estate front, all the buzz is over the government plan - first suggested by the Federal Reserve, which is holding reams and reams of near-worthless RMBS - to turn Fannie Mae and Freddie Mac foreclosures into rental properties. The two failed GSEs became the lenders of last resort and have back-handedly bailed out the nation's biggest banks by buying back much of the worthless mortgages still sitting somewhere off the books of JP Morgan Chase, Bank of America, Citigroup and Wells-Fargo.
Many of the same firms who caused the financial and mortgage miasma in the first place are now lining up to buy the foreclosed properties at rock-bottom prices and turn America into a nation of renters. Deustche Bank, Fortress Capital, Barclays Capital, Neuberger Berman Group, Ranieri Partners and UBS are among firms interested in becoming property owners and managers. Good luck with that. Like all other attempts to inject new life into the failed housing market this program will be the subject of great scrutiny and consternation from American citizens, many of whom were forced out of their homes during the late 2000s.
Naturally, these vulture capitalists will get to cherry pick the foreclosures, largely at the expense of the US taxpayer. Outrage should begin forming from groups like the Occupy movement and others within weeks. The government will likely present the program as a jobs-building incentive when in reality it is nothing less than a well-conceived plan to fleece Americans as renters since virtually nobody can qualify for a mortgage these days.
Dow 12,471.02, +21.57 (0.17%)
NASDAQ 2,724.70, +13.94 (0.51%)
S&P 500 1,295.50, +3.02 (0.23%)
NYSE Composite 7,681.26, +19.28 (0.25%)
NASDAQ Volume 1,662,562,500
NYSE Volume 3,939,928,500
Combined NYSE & NASDAQ Advance - Decline: 3397-2175
Combined NYSE & NASDAQ New highs - New lows: 166-40
WTI crude oil: 99.10, -1.77
Gold: 1,647.70, +8.10
Silver: 30.12, +0.23
Retail Sales for December were nothing short of a disaster, rising a mere 0.1% on expectations of a 0.4% boost, putting an end to the fiction that was widely spouted around financial circles, that holiday sales were brisk and consumers had their wallets wide open during the festive season.
Ex-autos, retail sales were even worse, down 0.2% (maybe those annoying Lexus Christmas commercials were good for something after all) on epectations of a 0.3% gain.
Business inventories were tighter, growing at a modest 0.3% in December after being up 0.8% in November. The drawdown during Christmas season will have consequences, especially involving calculations of 4th quarter 2011 GDP, and, if it continues, 1st quarter 2012 figures as well.
Perhaps the scariest number of the morning came from the wholly-discredited BLS, with their weekly report on initial unemployment claims, which came in much higher than the expected 375,000, bumping up to 399,000, which no doubt will be revised upward above 400,000 next week. From the data, it certainly seems to make sense that the BLS numbers are not properly seasonally-adjusted, and that many of those holiday season jobs were just that, seasonal, as in not permanent.
The uptake on the data is that American retailers are in deep trouble, consumers aren't about to rush out and buy just because they have a few extra dollars in their wallets or purses, and good, well-paying jobs are still on the horizon of imagination.
All of those assumptions did not deter Wall Street from boosting stock prices for the fifth time in eight trading sessions this new year. The reason would most likely be in the belief that Europe's debt crisis is all but solved, following an ECB announcement of no movement in interest rates and better-than-expected results in Spanish and Italian bond auctions. As usual, traders will hang their collective hats on any data that supports the cause of endless money printing and higher and higher stock prices, in the belief that a strong stock market is a good reflection of the overall economic picture, which is pure folly.
Large bankruptcies are on the rise, indicating a resumption of the financial fallout from 2008. With Kodak already on the ropes and possibly days away from a formal bankruptcy announcement, Hostess, the maker of Twinkies, Ding-Dongs and other high fructose snacks, filed bankruptcy on Wednesday.
The next victim is likely to be Sears Holdings. Lender CIT, the firm now headed by the nefarious John Thain, has made it clear that vendors to Sears and K-Mart will no longer receive financing or payment guarantees. Thain, who was the last CEO of Merrill Lynch before it was forced upon Bank of America, was one of the leading banking figures responsible for much of the 2008 financial crash.
Apparently, Thain has found new life as a vulture, now circling the bond holdings and other assets of Sears.
On the real estate front, all the buzz is over the government plan - first suggested by the Federal Reserve, which is holding reams and reams of near-worthless RMBS - to turn Fannie Mae and Freddie Mac foreclosures into rental properties. The two failed GSEs became the lenders of last resort and have back-handedly bailed out the nation's biggest banks by buying back much of the worthless mortgages still sitting somewhere off the books of JP Morgan Chase, Bank of America, Citigroup and Wells-Fargo.
Many of the same firms who caused the financial and mortgage miasma in the first place are now lining up to buy the foreclosed properties at rock-bottom prices and turn America into a nation of renters. Deustche Bank, Fortress Capital, Barclays Capital, Neuberger Berman Group, Ranieri Partners and UBS are among firms interested in becoming property owners and managers. Good luck with that. Like all other attempts to inject new life into the failed housing market this program will be the subject of great scrutiny and consternation from American citizens, many of whom were forced out of their homes during the late 2000s.
Naturally, these vulture capitalists will get to cherry pick the foreclosures, largely at the expense of the US taxpayer. Outrage should begin forming from groups like the Occupy movement and others within weeks. The government will likely present the program as a jobs-building incentive when in reality it is nothing less than a well-conceived plan to fleece Americans as renters since virtually nobody can qualify for a mortgage these days.
Dow 12,471.02, +21.57 (0.17%)
NASDAQ 2,724.70, +13.94 (0.51%)
S&P 500 1,295.50, +3.02 (0.23%)
NYSE Composite 7,681.26, +19.28 (0.25%)
NASDAQ Volume 1,662,562,500
NYSE Volume 3,939,928,500
Combined NYSE & NASDAQ Advance - Decline: 3397-2175
Combined NYSE & NASDAQ New highs - New lows: 166-40
WTI crude oil: 99.10, -1.77
Gold: 1,647.70, +8.10
Silver: 30.12, +0.23
Wednesday, January 11, 2012
No News, No Earnings, No Data, No Volume Means Nothing Much for Stocks
The Wall Street HTF machines must have been cranked up to maximum momentum on yet another day without any notable news or data, because stocks, after an early dive into the red, continued an inexorable advance throughout the session, pushing all major indices to positive or flat closes.
Despite Alcoa (AA) announcing in-line earnings on Monday, there haven't been any companies of import releasing full year and 4th quarter results this week. That should all change next week when the market will be inundated with quarterly and year-end reports from a plethora of firms, but so far this week, the markets have had little to move on in either direction.
Instead of pouring into or out of positions, as is often the case in the first few weeks of a new year, traders have been stuck in neutral the past five sessions, and the rest of the week doesn't offer much in the way of market-moving events or news.
The fed released its beige book, detailing what everybody already knows: that the US economy is limping along, unemployment remains a stubborn problem, housing is still weak and December retail was something of a non-event. Even word from the almighty Federal Reserve did nothing to move stocks.
Down 63 points shortly after 10:00 am ET, the Dow finally pushed into positive territory in the final 20 minutes of trading before falling back to red at the close. Leading the slow surge, the NASDAQ had been positive most of the session, with the S&P following the Dow's path, finally finishing with a fractional gain.
One notable item not mentioned around the trading posts was the upcoming debacle of another debt ceiling increase, just five months after the congress and president Obama wrangled over raising the ceiling last August. Our brilliant leaders have managed to blow through some $900 billion in fresh debt since then and will need another rise, which was negotiated in the initial bill.
President Obama is set to ask congress for another $1.2 to $1.5 trillion in a matter of days. The congress will have 15 days to decide whether to grant Mr. Obama his wish. Meanwhile, the debt ceiling will be once again breached, and, after appropriate dummy theater, the congress will oblige. The rhetoric should be especially thick this time around, especially with debate on whether to keep the inappropriately-named payroll tax decrease for the remainder of the year. That deal runs out at the end of February.
Political junkies will enjoy the show; the rest of us will entertain emotions from boredom to disgust. Thank God for the NFL playoffs.
Dow 12,449.45, -13.02 (0.10%)
NASDAQ 2,710.76, +8.26 (0.31%)
S&P 500 1,292.48, +0.40 (0.03%)
NYSE Composite 7,662.17, -6.73 (0.09%)
NASDAQ Volume 1,712,712,875
NYSE Volume 3,965,303,250
Combined NYSE & NASDAQ Advance - Decline: 3208-2391
Combined NYSE & NASDAQ New highs - New lows: 112-36
WTI crude oil: 101.73, -0.51
Gold: 1,639.60, +8.10
Silver: 29.89, +0.08
Despite Alcoa (AA) announcing in-line earnings on Monday, there haven't been any companies of import releasing full year and 4th quarter results this week. That should all change next week when the market will be inundated with quarterly and year-end reports from a plethora of firms, but so far this week, the markets have had little to move on in either direction.
Instead of pouring into or out of positions, as is often the case in the first few weeks of a new year, traders have been stuck in neutral the past five sessions, and the rest of the week doesn't offer much in the way of market-moving events or news.
The fed released its beige book, detailing what everybody already knows: that the US economy is limping along, unemployment remains a stubborn problem, housing is still weak and December retail was something of a non-event. Even word from the almighty Federal Reserve did nothing to move stocks.
Down 63 points shortly after 10:00 am ET, the Dow finally pushed into positive territory in the final 20 minutes of trading before falling back to red at the close. Leading the slow surge, the NASDAQ had been positive most of the session, with the S&P following the Dow's path, finally finishing with a fractional gain.
One notable item not mentioned around the trading posts was the upcoming debacle of another debt ceiling increase, just five months after the congress and president Obama wrangled over raising the ceiling last August. Our brilliant leaders have managed to blow through some $900 billion in fresh debt since then and will need another rise, which was negotiated in the initial bill.
President Obama is set to ask congress for another $1.2 to $1.5 trillion in a matter of days. The congress will have 15 days to decide whether to grant Mr. Obama his wish. Meanwhile, the debt ceiling will be once again breached, and, after appropriate dummy theater, the congress will oblige. The rhetoric should be especially thick this time around, especially with debate on whether to keep the inappropriately-named payroll tax decrease for the remainder of the year. That deal runs out at the end of February.
Political junkies will enjoy the show; the rest of us will entertain emotions from boredom to disgust. Thank God for the NFL playoffs.
Dow 12,449.45, -13.02 (0.10%)
NASDAQ 2,710.76, +8.26 (0.31%)
S&P 500 1,292.48, +0.40 (0.03%)
NYSE Composite 7,662.17, -6.73 (0.09%)
NASDAQ Volume 1,712,712,875
NYSE Volume 3,965,303,250
Combined NYSE & NASDAQ Advance - Decline: 3208-2391
Combined NYSE & NASDAQ New highs - New lows: 112-36
WTI crude oil: 101.73, -0.51
Gold: 1,639.60, +8.10
Silver: 29.89, +0.08
Tuesday, January 10, 2012
Markets Are Just BLAH
Blah.
That's the one word that describes this market and generally the state of US equity markets for the past month.
Yesterday was the low volume day for the new year. Today wasn't much better.
Today, stocks shot up at the open, reached the highs of the day early on and drifted in a narrow range for the remainder of the session. That's it. Nothing happened that would affect markets in either direction. The Ponzi scheme of the banks, the Fed and the government is working to perfection. Stocks will slowly move higher until there's some need to liquidate (like options expiration next week).
Otherwise, shut up and spend, peons. Everything you need will get more expensive while your wages stagnate or get cut, unless you work for the government or collect a welfare, disability or SS check.
45 million on food stamps. No growth. No incentive to start new businesses. Overregulation. The American Dream died somewhere between 9/11 and the mortgage meltdown which began in 2007. Get ready for a long, slow, painful decade of dashed hopes and failed families.
(I wish I could be more optimistic, but it's simply not possible.)
Mitt Romney or Barack Obama? Does it really matter? Both are tools of the banking elite as are most of your senators and representatives in the House.
Not only is the economy crumbling, so is the whole country, from the infrastructure to the societal norms to civil liberties, which have been dashed and pounded into dust the past 11 years.
Just BLAH. And, BAH!
Dow 12,462.47, +69.78 (0.56%)
NASDAQ 2,702.50, +25.94 (0.97%)
S&P 500 1,292.08, +11.38 (0.89%)
NYSE Composite 7,668.90, +84.24 (1.11%)
NASDAQ Volume 1,815,157,750
NYSE Volume 4,201,000,500
Combined NYSE & NASDAQ Advance - Decline: 4221-1407
Combined NYSE & NASDAQ New highs - New lows: 252-42
WTI crude oil: 102.24, +0.93
Gold: 1,631.50, +23.40
Silver: 29.82, +1.03
That's the one word that describes this market and generally the state of US equity markets for the past month.
Yesterday was the low volume day for the new year. Today wasn't much better.
Today, stocks shot up at the open, reached the highs of the day early on and drifted in a narrow range for the remainder of the session. That's it. Nothing happened that would affect markets in either direction. The Ponzi scheme of the banks, the Fed and the government is working to perfection. Stocks will slowly move higher until there's some need to liquidate (like options expiration next week).
Otherwise, shut up and spend, peons. Everything you need will get more expensive while your wages stagnate or get cut, unless you work for the government or collect a welfare, disability or SS check.
45 million on food stamps. No growth. No incentive to start new businesses. Overregulation. The American Dream died somewhere between 9/11 and the mortgage meltdown which began in 2007. Get ready for a long, slow, painful decade of dashed hopes and failed families.
(I wish I could be more optimistic, but it's simply not possible.)
Mitt Romney or Barack Obama? Does it really matter? Both are tools of the banking elite as are most of your senators and representatives in the House.
Not only is the economy crumbling, so is the whole country, from the infrastructure to the societal norms to civil liberties, which have been dashed and pounded into dust the past 11 years.
Just BLAH. And, BAH!
Dow 12,462.47, +69.78 (0.56%)
NASDAQ 2,702.50, +25.94 (0.97%)
S&P 500 1,292.08, +11.38 (0.89%)
NYSE Composite 7,668.90, +84.24 (1.11%)
NASDAQ Volume 1,815,157,750
NYSE Volume 4,201,000,500
Combined NYSE & NASDAQ Advance - Decline: 4221-1407
Combined NYSE & NASDAQ New highs - New lows: 252-42
WTI crude oil: 102.24, +0.93
Gold: 1,631.50, +23.40
Silver: 29.82, +1.03
Monday, January 9, 2012
Euro a Bit Higher; Stocks Barely Respond as Sinking Feeling Persists
After the first week of trading turned out to be one big cork pop on January 3rd - when the Dow soared 180 points, mostly at the open - and a slow melt lower, the first Monday of the new year was more evidence of just how sick, tired and moribund global markets have become. It's as though everybody is just waiting for the other shoe to drop, that some seismic implosion - most likely in Europe - is about to send stocks into a prolonged tailspin that ends in repudiation of sovereign debt and another huge blow to the fiat-based banking system.
Evidence exists that all is not well in Euroland, while pundits here in America point to the only positive metric they can see, higher corporate profits, though even there, signs are beginning to emerge that the record profits from 2011 are as fleeting as the passage of a few moments in time.
Estimates for 4th quarter corporate earnings have been slashed, and the number of pre-announcements from companies is at a three-year high, harkening back to the dismal days of early 2009, when there was nothing anybody or any company could do to halt the continuing downturn.
Even today's rather slow-moving market was full of tepid trading, highlighted by fractional moves in the averages, suggesting that nothing short of a complete overhaul of Europe's finances - and maybe even our own - can provide the kind of stimulus needed to restore investor confidence, which has waned severely since the middle of last year.
Even the bold joint pronouncement today by France's Nicolas Sarkozy and Germany's Angela Merkel failed to inspire any confidence. The two leaders set a timetable of March 1 for Euro-zone leaders to detail a plan of stricter budgetary restraint among member nations. Of course, critics and skeptics claim to have heard that song before. In the original agreement, a nation's current deficit was not supposed to exceed 3%. Any claims that sovereign states will clean up their balance sheets and act responsibly is met with jeers and, soon, tears.
America met a seminal moment in its own history today, as the nation's debt equalled its GDP, putting the world's powerhouse economy on a level approaching that of Italy, Greece or Portugal.
For its part, the White House appears ready to jettison all the bad residential loans held at Fannie Mae and Freddie Mac by turning them over to investors in bulk, with an eye toward turning over two million foreclosed and now-delinquent homes into rental properties, overseen by a hand-picked, large, well-capitalized property management firms.
The plan was first introduced by the Federal Reserve last week, though our friend Jim Willie, aka, the Golden Jackass, has been predicting such a move for the past two years, with deleterious effects abundant. The problems, from even a casual point of view, range from traditional homeowners being shut out of owning affordable housing and being forced to rent at increasingly-expensive rates, to the potential of default on property taxes should one of these "well-financed" firms going bust. It's almost the sub-prime crisis in reverse and is a radical departure from the American dream of home-ownership.
The property managers will likely receive sweet-heart deals from the government, slashing the prices to be paid on the homes instead of offering principal write-downs to strapped homeowners or new, qualified applicants because banks have been steadfastly denying mortgages and credit to even the most risk averse individuals and families.
We are quickly heading into a bleak, black hole of socialism, wherein the next shoe to drop won't be a ballet slipper but rather the boot of the storm trooper landing squarely on the necks of millions of tax-and-debt slaves, while the rich get bailouts and the poor get handouts.
Fairness is a word that seems to have permanently departed the American scene. Economic ugliness and despair approaches at breakneck speed all in the name of keeping up appearances.
After the closing bell, Alcoa (AA) kicked off earnings season with a disappointing, yet fitting, loss of three cents per share.
Dow 12,392.69, +32.77 (0.27%)
NASDAQ 2,676.56, +2.34 (0.09%)
S&P 500 1,280.70, +2.89 (0.23%)
NYSE Composite 7,583.76, +26.08 (0.35%)
NASDAQ Volume 1,777,449,250
NYSE Volume 3,248,196,250
Combined NYSE & NASDAQ Advance - Decline: 3385-2189
Combined NYSE & NASDAQ New highs - New lows: 170-62
WTI crude oil: 101.31, -0.25
Gold: 1,608.10, -8.70
Silver: 28.78, +0.10
Evidence exists that all is not well in Euroland, while pundits here in America point to the only positive metric they can see, higher corporate profits, though even there, signs are beginning to emerge that the record profits from 2011 are as fleeting as the passage of a few moments in time.
Estimates for 4th quarter corporate earnings have been slashed, and the number of pre-announcements from companies is at a three-year high, harkening back to the dismal days of early 2009, when there was nothing anybody or any company could do to halt the continuing downturn.
Even today's rather slow-moving market was full of tepid trading, highlighted by fractional moves in the averages, suggesting that nothing short of a complete overhaul of Europe's finances - and maybe even our own - can provide the kind of stimulus needed to restore investor confidence, which has waned severely since the middle of last year.
Even the bold joint pronouncement today by France's Nicolas Sarkozy and Germany's Angela Merkel failed to inspire any confidence. The two leaders set a timetable of March 1 for Euro-zone leaders to detail a plan of stricter budgetary restraint among member nations. Of course, critics and skeptics claim to have heard that song before. In the original agreement, a nation's current deficit was not supposed to exceed 3%. Any claims that sovereign states will clean up their balance sheets and act responsibly is met with jeers and, soon, tears.
America met a seminal moment in its own history today, as the nation's debt equalled its GDP, putting the world's powerhouse economy on a level approaching that of Italy, Greece or Portugal.
For its part, the White House appears ready to jettison all the bad residential loans held at Fannie Mae and Freddie Mac by turning them over to investors in bulk, with an eye toward turning over two million foreclosed and now-delinquent homes into rental properties, overseen by a hand-picked, large, well-capitalized property management firms.
The plan was first introduced by the Federal Reserve last week, though our friend Jim Willie, aka, the Golden Jackass, has been predicting such a move for the past two years, with deleterious effects abundant. The problems, from even a casual point of view, range from traditional homeowners being shut out of owning affordable housing and being forced to rent at increasingly-expensive rates, to the potential of default on property taxes should one of these "well-financed" firms going bust. It's almost the sub-prime crisis in reverse and is a radical departure from the American dream of home-ownership.
The property managers will likely receive sweet-heart deals from the government, slashing the prices to be paid on the homes instead of offering principal write-downs to strapped homeowners or new, qualified applicants because banks have been steadfastly denying mortgages and credit to even the most risk averse individuals and families.
We are quickly heading into a bleak, black hole of socialism, wherein the next shoe to drop won't be a ballet slipper but rather the boot of the storm trooper landing squarely on the necks of millions of tax-and-debt slaves, while the rich get bailouts and the poor get handouts.
Fairness is a word that seems to have permanently departed the American scene. Economic ugliness and despair approaches at breakneck speed all in the name of keeping up appearances.
After the closing bell, Alcoa (AA) kicked off earnings season with a disappointing, yet fitting, loss of three cents per share.
Dow 12,392.69, +32.77 (0.27%)
NASDAQ 2,676.56, +2.34 (0.09%)
S&P 500 1,280.70, +2.89 (0.23%)
NYSE Composite 7,583.76, +26.08 (0.35%)
NASDAQ Volume 1,777,449,250
NYSE Volume 3,248,196,250
Combined NYSE & NASDAQ Advance - Decline: 3385-2189
Combined NYSE & NASDAQ New highs - New lows: 170-62
WTI crude oil: 101.31, -0.25
Gold: 1,608.10, -8.70
Silver: 28.78, +0.10
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