Fueled by ever-larger injections of liquidity from the world's central banks, US equity markets have been disconnected from economic reality for some time, but today's shrug of the shoulders to two key economic reports has to make old-time "investors" wondering if hard numbers actually mean anything anymore.
Prior to the open, the Commerce Department released durable order data for January, which showed a 4.0% decline over the prior month. (Shrug shoulders if you trade stocks)
At 10:00 am, S&P/Case-Shiller data on home prices came in with a loud thud, matching the durable number at -4.0% for December. The widely watched index of home prices has now exceeded the post-crash lows and is at its lowest level since February, 2003, a 33.8% drop from the peak. If there is a recovery in housing, it certainly is well-hidden.
Despite the negativity of stubborn reality, stocks managed to post small gains across the board, with the Dow Jones Industrials closing above 13,000 for the first time since May, 2008. (cue fanfare here)
So, now that everybody can pop the champagne and don their "Dow 13,000" beanies, what's next?
Just in case you've tired of the constancy of the stock market, hovering around Dow 13,000 for more than a week in a very slow-moving, retarded kind of way on abysmally-low volume, take heart! Things are about to get a whole lot more interesting beginning Wednesday.
That's the day the ECB unleases its latest attempt to advance liquidity and goose markets (and inflation) with the second installment of the LTRO (Long Term Refinancing Operation), in which European banks will be offered up to EUR500 billion in three-year loans at the bargain-basement price of 1% (how appropriate!).
Back in December, the ECB did the same thing, and EUR489 billion was snatched up by some 523 institutions, though much of the money was eventually parked right back at the ECB, earning a measly 0.25%, resulting in small, albeit manageable losses for many of Europe's largest banks. To the banks, the 0.75% negative carry seemed a good enough deal to have funds on hand should the crisis deepen or a rogue trader muck up the balance sheet.
Ideally, the ECB would like the funding banks to snatch up more of that juicy sovereign debt that continues to float around in the Eurozone like so much flotsam and jetsam, but the LTRO also carries something of a stench of its own, via the equity markets, where the takers of the nearly-free money are cast under a dubious light.
No matter the particular cases for individual banks, tomorrow's "funding" should be making headlines about the time US stock markets ring their bells of jubilation.
Also tomorrow, America's central banker, Ben Bernanke, chairman of the Federal Reserve, will be before congress, making his required testimony before the House Finance Committee. Since the chairman's stuttering mouthfuls usually carry significant weight for the financial markets, he might make some news, though probably not, being the conscientious type who only prefers to move markets the old fashioned way, by getting the printing presses rolling full boar in the basement at the Fed.
Thursday and Friday feature a full meeting of EU ministers, with the $2 Trillion "firewall" topping the agenda.
Now, to the casual observer, these events may not evoke much excitement, but financial market players will be glued to their tubes, pads or whatever electronic means they have of staying abreast of developments and there just may be some fireworks. Of course, there may not, as these bulwarks of capitalism are about as open-minded and free-speaking as corpses in straightjackets.
On the other hand, any kind of adventurous talk or under-over funding take-up could move markets substantially, which is just what some traders would like to experience, rather than the Chinese water torture of the past seven or so sessions.
Meanwhile, what equity traders hate to admit, is that silver has been outperforming just about every other asset class in the known universe, up 30% on the year and breaking through resistance today on a powerful move forward.
In an interview with King World News, chartist Dan Norcini notes that silver has breached resistance at $35.50 and broken above the 50-day moving average. Today's 4% move higher was largely due to shorts having to cover their positions. Norcini says shorts are panicked and the next resistance level is around $40/ounce.
In the below video, Jon Najarian of Options Monster explains how the big players are looking for a breakout in silver. Enjoy.
Dow 13,005.27, +23.76 (0.18%)
NASDAQ 2,986.76, +20.60 (0.69%)
S&P 500 1,372.18, +4.59 (0.34%)
NYSE Composite 8,171.84, +28.29 (0.35%)
NASDAQ Volume 1,755,641,125
NYSE Volume 3,487,070,500
Combined NYSE & NASDAQ Advance - Decline: 2805-2796
Combined NYSE & NASDAQ New highs - New lows: 253-21
WTI crude oil: 106.55, -2.05
Gold: 1,788.40, +13.50
Silver: 37.14, +1.62
Tuesday, February 28, 2012
Monday, February 27, 2012
Dow 13,000. Fail. G20 Wants $2 Trillion Firewall; 1% Tip from a One-Percenter
Today was another in a seemingly-endless series of ridiculously small gains or losses for stocks, but, if one looked at the major indices early in the day, one would have thought any kind of gain or even getting close to unchanged was out of the question.
Stocks sold off right at the open, but suddenly, miraculously, once the Dow bottomed out with a 100-point loss, the entire market reversed and headed higher.
Some of the commentary surrounding the market reversal seem to suggest that it was due to the NAR's release at 10:00 am ET of pending home sales, which witnessed a 2% gain in January. Such commentary should be immediately dismissed as pure rubbish, for a number of reasons, the first being that real estate is such a small sliver of the US economy - and generally divorced from stocks - that the number doesn't move the Dow 120 points. Also, the January gain comes on the back of a 1.9% decline in December, and the warm weather this winter likely threw off all of the NAR's seasonable adjustments.
Probably the utmost reason that the theory concerning the move upward for the Dow being caused by pending home sales should be disregarded is that the bottom and subsequent move higher occurred 15 minutes before the NAR news. The Dow was already nearly 40 points off the bottom by 10:00 am.
No, the turnaround was more than likely the result of pump-priming by a gang of primary dealers, who, in a lightly-traded market, as this is, have more than enough firepower to move stocks in any direction they please, and the current pleasure is being positive, as it almost always is. The idea that the the major brokerages and big banks would like to engender more participation from individual investors, who have lost faith in Wall Street since the financial crash of '08 and haven't returned, is real, and the best way to get investors back in the mood - in the small minds of big bankers - is to manufacture rallies, such as the current one, which is about a 25% move since the start of October.
The trouble for the bankers is multitudinous. Nobody believes in their ways of doing business; there isn't enough disposable income in most households to really consider stocks as investments; there are too many headwinds, like Greece, the rest of Europe, Iran, high gas prices, lingering unemployment and more, and; the market sure looks toppy at this juncture.
Lastly, volumes for the better part of the last two months have been nothing but pathetic. Today was more of the same, so trying to entice individual investors back in is akin to finding volunteers for cliff diving. It looks dangerous, and nobody wants to go first.
To get an idea of how stalled out this market has become, consider that on Friday, February 17, the Dow closed at 12949.87 and today at 12,981.51. That's a move of less than 32 points in five days, and the repeating pattern of being down in the morning only to rally at some unknown time - though also in the A.M. - isn't exactly an inspiring feature.
So, after spending most of the day above the 13,000 mark on the Dow, the cheerleaders at CNBC will have to root again tomorrow, for the seventh day in a row.
Over the weekend, financial representatives of the G20 nations met in Mexico and came up with the notion that Europe needs to erect a $2 trillion financial "firewall" to keep its contagion from spreading. That's all they seem to know how to do, these top-level bureaucrats, spend money to keep Europe's debt conflagration from inflicting collateral damage. Next time you hear the word "firewall" your response should be "stupid," because a firewall, by definition, is purposely set up to keep everything enclosed. In other words, anything inside the firewall will burn to a crisp. The term, and the idea are almost as revolting and ignorant as the much-bantered-about term, "ring-fence."
Now that the globalist elitists have their global economy and things aren't going so well, they want to revert to feudalism. Well, at least, via their ancestry, it's something they actually understand.
And, finally here's a story about a one-percenter, a rich banker, leaving a waitress a - you guessed it - a one percent tip. Talk about callous.
Dow 12,981.51, -1.44 (0.01%)
NASDAQ 2,966.16, +2.41 (0.08%)
S&P 500 1,367.59, +1.85 (0.14%)
NYSE Composite 8,143.56, -8.41 (0.10%)
NASDAQ Volume 1,761,845,125
NYSE Volume 3,492,574,750
Combined NYSE & NASDAQ Advance - Decline: 2682-2894
Combined NYSE & NASDAQ New highs - New lows: 230-25
WTI crude oil: 108.56, -1.21
Gold: 1,774.90, -1.50
Silver: 35.52, +0.19
Stocks sold off right at the open, but suddenly, miraculously, once the Dow bottomed out with a 100-point loss, the entire market reversed and headed higher.
Some of the commentary surrounding the market reversal seem to suggest that it was due to the NAR's release at 10:00 am ET of pending home sales, which witnessed a 2% gain in January. Such commentary should be immediately dismissed as pure rubbish, for a number of reasons, the first being that real estate is such a small sliver of the US economy - and generally divorced from stocks - that the number doesn't move the Dow 120 points. Also, the January gain comes on the back of a 1.9% decline in December, and the warm weather this winter likely threw off all of the NAR's seasonable adjustments.
Probably the utmost reason that the theory concerning the move upward for the Dow being caused by pending home sales should be disregarded is that the bottom and subsequent move higher occurred 15 minutes before the NAR news. The Dow was already nearly 40 points off the bottom by 10:00 am.
No, the turnaround was more than likely the result of pump-priming by a gang of primary dealers, who, in a lightly-traded market, as this is, have more than enough firepower to move stocks in any direction they please, and the current pleasure is being positive, as it almost always is. The idea that the the major brokerages and big banks would like to engender more participation from individual investors, who have lost faith in Wall Street since the financial crash of '08 and haven't returned, is real, and the best way to get investors back in the mood - in the small minds of big bankers - is to manufacture rallies, such as the current one, which is about a 25% move since the start of October.
The trouble for the bankers is multitudinous. Nobody believes in their ways of doing business; there isn't enough disposable income in most households to really consider stocks as investments; there are too many headwinds, like Greece, the rest of Europe, Iran, high gas prices, lingering unemployment and more, and; the market sure looks toppy at this juncture.
Lastly, volumes for the better part of the last two months have been nothing but pathetic. Today was more of the same, so trying to entice individual investors back in is akin to finding volunteers for cliff diving. It looks dangerous, and nobody wants to go first.
To get an idea of how stalled out this market has become, consider that on Friday, February 17, the Dow closed at 12949.87 and today at 12,981.51. That's a move of less than 32 points in five days, and the repeating pattern of being down in the morning only to rally at some unknown time - though also in the A.M. - isn't exactly an inspiring feature.
So, after spending most of the day above the 13,000 mark on the Dow, the cheerleaders at CNBC will have to root again tomorrow, for the seventh day in a row.
Over the weekend, financial representatives of the G20 nations met in Mexico and came up with the notion that Europe needs to erect a $2 trillion financial "firewall" to keep its contagion from spreading. That's all they seem to know how to do, these top-level bureaucrats, spend money to keep Europe's debt conflagration from inflicting collateral damage. Next time you hear the word "firewall" your response should be "stupid," because a firewall, by definition, is purposely set up to keep everything enclosed. In other words, anything inside the firewall will burn to a crisp. The term, and the idea are almost as revolting and ignorant as the much-bantered-about term, "ring-fence."
Now that the globalist elitists have their global economy and things aren't going so well, they want to revert to feudalism. Well, at least, via their ancestry, it's something they actually understand.
And, finally here's a story about a one-percenter, a rich banker, leaving a waitress a - you guessed it - a one percent tip. Talk about callous.
Dow 12,981.51, -1.44 (0.01%)
NASDAQ 2,966.16, +2.41 (0.08%)
S&P 500 1,367.59, +1.85 (0.14%)
NYSE Composite 8,143.56, -8.41 (0.10%)
NASDAQ Volume 1,761,845,125
NYSE Volume 3,492,574,750
Combined NYSE & NASDAQ Advance - Decline: 2682-2894
Combined NYSE & NASDAQ New highs - New lows: 230-25
WTI crude oil: 108.56, -1.21
Gold: 1,774.90, -1.50
Silver: 35.52, +0.19
Friday, February 24, 2012
Playing the Market, Twitter-Mob Style; Mogambo Guru Returns
It was certainly an exciting - if uneventful (depending on perspective) - end to the week, as the pumpers on CNBC breathlessly kept viewers in a strange state of animated suspense and anticipation over whether the Dow would actually close above the "psychologically important" (only to them) 13,000 level and the wrangling over details of the latest Greek bailout continued apace across the pond.
But, a funny thing happened on the way to 13,000 - or rather on the way down away from it - this morning, shortly after 10:00 am ET.
With the Dow at what would become the highs of the day, a sudden about-face took place, sending the index screaming for mercy in a 37-point drop over a roughly ten minute span.
Moves like this are not uncommon in the world of fast-paced HTF algos (a subject which has been noted here all too often in the past), but today's event might have had a bit of a different skew. Yesterday afternoon, a group of individuals (no names, please) decided to have a bit of fun, or mischief, possibly at the expense of the well-heeled crowd that convenes on Wall Street regularly.
A plan was concocted to see if a bunch of unrelated, inconspicuous internet users could have an effect on the HTF algos, which, as we know, track headlines from the likes of Bloomberg and the Wall Street Journal, but also follow trends on social websites like Facebook and Twitter.
The idea was that everyone would Tweet, at precisely 10:03 am, "Greece defaults" and see if the dumb algos would fall for the bait. The tweets went out, not all at the same time, and not uniform by any means, though the 10:03 time-stamp was extended, with various mentions of Greece defaulting flowing into the Twitter-verse in earnest for about twenty minutes.
Whether the tweeters actually managed to trip up the HFT traders and their zipity-do-dah algorithms is now and will likely forever be a matter of speculation, but if there were an actual cause and effect, it brings some interesting - and scary - possibilities to the table.
Suppose such crowd-sourced media were actually effective in moving the algos, thus affecting the price of an entire index? What then would be the effect on an individual stock? Were a group of people intent of making some money with this trick, it might be easier than anyone imagines, somewhat akin to elevator whisper campaigns designed to take down candidates in local elections or the old pump-and-dump strategies that were so effective in the early dotcom days of the internet, circa 1998-2001.
A plan could easily be put together to move a stock a few points in one direction or another, with appropriate bets placed by those "in the know." If truly effective, the profits could be staggering. Truth is, that's probably what has been happening in the US markets and elsewhere for quite some time, but especially theses days, as the market seems less than reluctant to trade on rumors and headlines rather than fundamentals.
Whatever the case, today's experiment via Twitter might raise a few eyebrows and give people some ideas. As for 13,000 on the Dow, the CNBC presenters and those with an emotional tie to the number will just have to wait until next week.
The other major development of the day also took place on the internet, and actually happened on Thursday, when the frightful visage of the Mogambo Guru suddenly reappeared sporting his own blog. The majestic Mogambo Guru (MMG) had been a regular typist and word-twister of financial follies on the Daily Reckoning for a long time, though he had taken an absence from penning the occasional witty and irreverent column (OWAIC).
Now that he's back and regularly submitting his thoughts to the public via a blog there should be little doubt that his hordes of faithful followers (HHOFF) will flock to his work like... ummm, bees to honey, or something like that.
Welcome back, oh great, glorious, hallowed, devious and mischievous Guru! Your absence left a hold in the fabric of time and space, but we're sure you'll be promptly attending to mending it.
Just a few quick notes for the weekend:
Today's volume, which has been horribly anemic on a regular basis anyway, was fairly ghastly today, the lowest in a decade, notes ZeroHedge.
There's a meeting of the G20 in Mexico City over the weekend in which the big fight is supposed to be between the IMF's Christine Lagarde and the finance ministers and representatives of Germany. The IMF wants more dough and the Germans are tiring of spending so much. Besides the main event, the undercard features thousands of police in riot gear protecting the one percenters from rock-hurling Mexican hooligans and potentially, armed drug cartel operatives. One has to admit that setting a meeting of world leaders in a place as dangerous as Mexico City offers a bit of intrigue, to say nothing of its inducement to all kinds of mayhem.
Dow 12,982.95, -1.74 (0.01%)
NASDAQ 2,963.75, +6.77 (0.23%)
S&P 500 1,365.74, +2.28 (0.17%)
NYSE Composite 8,151.96, +15.72 (0.19%)
NASDAQ Volume 1,641,587,000
NYSE Volume 3,367,789,000
Combined NYSE & NASDAQ Advance - Decline: 2827-2792
Combined NYSE & NASDAQ New highs - New lows: 281-11 (Really?)
WTI crude oil: 109.77, +1.94 (pain at the pump)
Gold: 1,776.40, -9.90
Silver: 35.34, -0.22
But, a funny thing happened on the way to 13,000 - or rather on the way down away from it - this morning, shortly after 10:00 am ET.
With the Dow at what would become the highs of the day, a sudden about-face took place, sending the index screaming for mercy in a 37-point drop over a roughly ten minute span.
Moves like this are not uncommon in the world of fast-paced HTF algos (a subject which has been noted here all too often in the past), but today's event might have had a bit of a different skew. Yesterday afternoon, a group of individuals (no names, please) decided to have a bit of fun, or mischief, possibly at the expense of the well-heeled crowd that convenes on Wall Street regularly.
A plan was concocted to see if a bunch of unrelated, inconspicuous internet users could have an effect on the HTF algos, which, as we know, track headlines from the likes of Bloomberg and the Wall Street Journal, but also follow trends on social websites like Facebook and Twitter.
The idea was that everyone would Tweet, at precisely 10:03 am, "Greece defaults" and see if the dumb algos would fall for the bait. The tweets went out, not all at the same time, and not uniform by any means, though the 10:03 time-stamp was extended, with various mentions of Greece defaulting flowing into the Twitter-verse in earnest for about twenty minutes.
Whether the tweeters actually managed to trip up the HFT traders and their zipity-do-dah algorithms is now and will likely forever be a matter of speculation, but if there were an actual cause and effect, it brings some interesting - and scary - possibilities to the table.
Suppose such crowd-sourced media were actually effective in moving the algos, thus affecting the price of an entire index? What then would be the effect on an individual stock? Were a group of people intent of making some money with this trick, it might be easier than anyone imagines, somewhat akin to elevator whisper campaigns designed to take down candidates in local elections or the old pump-and-dump strategies that were so effective in the early dotcom days of the internet, circa 1998-2001.
A plan could easily be put together to move a stock a few points in one direction or another, with appropriate bets placed by those "in the know." If truly effective, the profits could be staggering. Truth is, that's probably what has been happening in the US markets and elsewhere for quite some time, but especially theses days, as the market seems less than reluctant to trade on rumors and headlines rather than fundamentals.
Whatever the case, today's experiment via Twitter might raise a few eyebrows and give people some ideas. As for 13,000 on the Dow, the CNBC presenters and those with an emotional tie to the number will just have to wait until next week.
The other major development of the day also took place on the internet, and actually happened on Thursday, when the frightful visage of the Mogambo Guru suddenly reappeared sporting his own blog. The majestic Mogambo Guru (MMG) had been a regular typist and word-twister of financial follies on the Daily Reckoning for a long time, though he had taken an absence from penning the occasional witty and irreverent column (OWAIC).
Now that he's back and regularly submitting his thoughts to the public via a blog there should be little doubt that his hordes of faithful followers (HHOFF) will flock to his work like... ummm, bees to honey, or something like that.
Welcome back, oh great, glorious, hallowed, devious and mischievous Guru! Your absence left a hold in the fabric of time and space, but we're sure you'll be promptly attending to mending it.
Just a few quick notes for the weekend:
Today's volume, which has been horribly anemic on a regular basis anyway, was fairly ghastly today, the lowest in a decade, notes ZeroHedge.
There's a meeting of the G20 in Mexico City over the weekend in which the big fight is supposed to be between the IMF's Christine Lagarde and the finance ministers and representatives of Germany. The IMF wants more dough and the Germans are tiring of spending so much. Besides the main event, the undercard features thousands of police in riot gear protecting the one percenters from rock-hurling Mexican hooligans and potentially, armed drug cartel operatives. One has to admit that setting a meeting of world leaders in a place as dangerous as Mexico City offers a bit of intrigue, to say nothing of its inducement to all kinds of mayhem.
Dow 12,982.95, -1.74 (0.01%)
NASDAQ 2,963.75, +6.77 (0.23%)
S&P 500 1,365.74, +2.28 (0.17%)
NYSE Composite 8,151.96, +15.72 (0.19%)
NASDAQ Volume 1,641,587,000
NYSE Volume 3,367,789,000
Combined NYSE & NASDAQ Advance - Decline: 2827-2792
Combined NYSE & NASDAQ New highs - New lows: 281-11 (Really?)
WTI crude oil: 109.77, +1.94 (pain at the pump)
Gold: 1,776.40, -9.90
Silver: 35.34, -0.22
Thursday, February 23, 2012
Is the Crisis Deepening?; Meg Whitman, Prototypical CEO Failure
Well, the PPT must have gotten up early today, because no sooner did the Dow dip 50 points off the open than it was boosted to a 50 mark to the positive.
Was there a reason, a rationale? Sure. Stocks must go up to bolster the perception that all is well in the good old US of A.
Naturally, once the market was back on a solid we're-going-to-13,000 footing once again, the HFT momo-chasers went to work, keeping the abhorrent, clumsy, no-volume rally going for the remainder of the lackluster session.
With stocks just screaming higher and higher virtually every day, some elements on the general tenor of the stock market rally vis-a-vis the real world economy need to be scrutinized.
Oil continues to rocket higher, up over $108 per barrel in electronic trading late today. The Euro/Dollar trade continues to be the creepiest, most cynical lie to the world. How does the Euro, with most of Europe already in a recession and the rest of it teetering on one, continue to ramp higher against the US dollar? Aren't we supposed to be in better shape than the various countries making up the Eurozone? Apparently not, because the EUR/USD hit another high today, closing above 1.33. It simply makes no sense, except if you have significant positions (like Goldman Sachs does) long the Euro and the stock market.
Last we checked, GDP was still growing at less than 3% in the US, though in Europe, minus signs and fractions of one percent dot the landscape. America still has more than 14 million unemployed people, wages have been stagnant to lower for more than a decade and the real estate market is officially in depression-like throes.
Something is definitely not right, when the Euro is up while most of the continent is in recession, oil is ramping to record levels for this time of year despite all manner of data showing rampant demand destruction, gold and silver are ripping, yet the stock market continues to rise and rise and rise without so much as a 3% pull-back. The Dow Jones Industrials are up a wicked, unbelievable 2339 points since October 1, an incredible gain of 21.95% in less than five months. Yep, the rich are getting richer... again.
Watch retail analyst Howard Davidowitz rip apart the notion of "growth" in the video below:
Hundreds of stores closing from a handful of retailers; the rest, Davidowitz calls "train wrecks."
A couple of lines gleans from Hewlett-Packard's (HPQ) newly-minted CEO, Meg Whitman, aptly demonstrate what's wrong with corporate and political America. First, Ms. Whitman, who, after a stint as the CEO of eBay, launched an unsuccessful bid for the governorship of California. Out of luck and out of a job, Meg was pegged to lead HPQ out of the abyss.
Good luck with that, you clueless board members. Whitman is uniquely suited to drive Hewlett Packard even deeper into an already well-dug hole. Her "success" at eBay can more or less be summed up in one line: A trained monkey could have done as well, and probably without alienating as many people, buyers and sellers alike.
Ebay was one of the few dotcom companies that fit the new paradigm of the internet perfectly, allowing small businesses and individuals to buy and sell just about anything under the sun. Ms. Whitman had, in reality, little to do with making the company a household name. It was all about eBay's near-monopolistic position in the online retail space that made the company a success. It would have actually been more of a surprise had she not succeeded. Meg Whitman didn't start the company. She got in when the getting was good.
In any case, here's some of the cliche claptrap that Whitman spewed on her CNBC interview this morning:
It's a shame Ms. Whitman's on-the-job training as CEO of a real company didn't include lessons in humility, because the market provided some for her after the company beat (lowered) expectations narrowly this quarter, but was short on revenue and even shorter on guidance. Traders punished HPQ to the tune of a 6.5% decline upon the occasion of the release of its most recent quarter's numbers. That's a pretty impressive drop, considering the company had already lost a two-fifths of its value in just the past year. Meg Whitman is your gal, especially if you ascribe to the Peter Principle.
There isn't a day of reckoning coming. There will be many days of many reckonings over the coming years because the entire global financial and commercial system is being kept afloat on dreams, lies, cronyism and hype.
Dow 12,984.69, +46.02 (0.36%)
NASDAQ 2,956.98, +23.81 (0.81%)
S&P 500 1,363.46, +5.80 (0.43%)
NYSE Composite 8,135.98, +41.60 (0.51%)
NASDAQ Volume 1,723,876,625
NYSE Volume 3,726,037,500
Combined NYSE & NASDAQ Advance - Decline: 4040-1606
Combined NYSE & NASDAQ New highs - New lows: 243-24 (Wowser! Only one new low on the NYSE.)
WTI crude oil: 107.83, +1.55 (up 10% in February)
Gold: 1,786.30, +15.00 (closing in on all-time highs)
Silver: 35.56, +1.30 (about to break out)
Was there a reason, a rationale? Sure. Stocks must go up to bolster the perception that all is well in the good old US of A.
Naturally, once the market was back on a solid we're-going-to-13,000 footing once again, the HFT momo-chasers went to work, keeping the abhorrent, clumsy, no-volume rally going for the remainder of the lackluster session.
With stocks just screaming higher and higher virtually every day, some elements on the general tenor of the stock market rally vis-a-vis the real world economy need to be scrutinized.
Oil continues to rocket higher, up over $108 per barrel in electronic trading late today. The Euro/Dollar trade continues to be the creepiest, most cynical lie to the world. How does the Euro, with most of Europe already in a recession and the rest of it teetering on one, continue to ramp higher against the US dollar? Aren't we supposed to be in better shape than the various countries making up the Eurozone? Apparently not, because the EUR/USD hit another high today, closing above 1.33. It simply makes no sense, except if you have significant positions (like Goldman Sachs does) long the Euro and the stock market.
Last we checked, GDP was still growing at less than 3% in the US, though in Europe, minus signs and fractions of one percent dot the landscape. America still has more than 14 million unemployed people, wages have been stagnant to lower for more than a decade and the real estate market is officially in depression-like throes.
Something is definitely not right, when the Euro is up while most of the continent is in recession, oil is ramping to record levels for this time of year despite all manner of data showing rampant demand destruction, gold and silver are ripping, yet the stock market continues to rise and rise and rise without so much as a 3% pull-back. The Dow Jones Industrials are up a wicked, unbelievable 2339 points since October 1, an incredible gain of 21.95% in less than five months. Yep, the rich are getting richer... again.
Watch retail analyst Howard Davidowitz rip apart the notion of "growth" in the video below:
Hundreds of stores closing from a handful of retailers; the rest, Davidowitz calls "train wrecks."
A couple of lines gleans from Hewlett-Packard's (HPQ) newly-minted CEO, Meg Whitman, aptly demonstrate what's wrong with corporate and political America. First, Ms. Whitman, who, after a stint as the CEO of eBay, launched an unsuccessful bid for the governorship of California. Out of luck and out of a job, Meg was pegged to lead HPQ out of the abyss.
Good luck with that, you clueless board members. Whitman is uniquely suited to drive Hewlett Packard even deeper into an already well-dug hole. Her "success" at eBay can more or less be summed up in one line: A trained monkey could have done as well, and probably without alienating as many people, buyers and sellers alike.
Ebay was one of the few dotcom companies that fit the new paradigm of the internet perfectly, allowing small businesses and individuals to buy and sell just about anything under the sun. Ms. Whitman had, in reality, little to do with making the company a household name. It was all about eBay's near-monopolistic position in the online retail space that made the company a success. It would have actually been more of a surprise had she not succeeded. Meg Whitman didn't start the company. She got in when the getting was good.
In any case, here's some of the cliche claptrap that Whitman spewed on her CNBC interview this morning:
- On the timing of HPQ's turnaround: "Fundamental change... will take some time."
- On the challenges facing the company: "There are three 'buckets' of challenge: 1) basic execution, 2) each business has it's own unique challenges, 3) there have been changes in our business."
- On HPQ's structure: "We have to zero-base the bureaucracy..."
- "We have to save so we can invest and compete more effectively."
- "We're not where we want to be in China." (Meg should know. Ebay shuttered its China operations under Whitman after years of abject failure and lack of traction.)
- On when HPQ's metrics will show some change: "We'll know a lot by the end of 2012. Revenue acceleration in 2013."
It's a shame Ms. Whitman's on-the-job training as CEO of a real company didn't include lessons in humility, because the market provided some for her after the company beat (lowered) expectations narrowly this quarter, but was short on revenue and even shorter on guidance. Traders punished HPQ to the tune of a 6.5% decline upon the occasion of the release of its most recent quarter's numbers. That's a pretty impressive drop, considering the company had already lost a two-fifths of its value in just the past year. Meg Whitman is your gal, especially if you ascribe to the Peter Principle.
There isn't a day of reckoning coming. There will be many days of many reckonings over the coming years because the entire global financial and commercial system is being kept afloat on dreams, lies, cronyism and hype.
Dow 12,984.69, +46.02 (0.36%)
NASDAQ 2,956.98, +23.81 (0.81%)
S&P 500 1,363.46, +5.80 (0.43%)
NYSE Composite 8,135.98, +41.60 (0.51%)
NASDAQ Volume 1,723,876,625
NYSE Volume 3,726,037,500
Combined NYSE & NASDAQ Advance - Decline: 4040-1606
Combined NYSE & NASDAQ New highs - New lows: 243-24 (Wowser! Only one new low on the NYSE.)
WTI crude oil: 107.83, +1.55 (up 10% in February)
Gold: 1,786.30, +15.00 (closing in on all-time highs)
Silver: 35.56, +1.30 (about to break out)
Wednesday, February 22, 2012
Greek Debt Prison; Real Estate's Bogus Stats and Obama's Phantom Recovery
Let's Just Pretend.
That's what Wall Street, the EU and the central bankers of the world want you to do. Pretend.
Pretend there is a way out for Greece. Pretend that the US economy is growing, that the debtsof all nations will eventually be paid off through the magic of "growth," that your future, and that of your kids' will be secure.
None of it is true. The headlines from the likes of Reuters, Bloomberg and Dow Jones only parrot what the elite bankers and corrupt governments feed them. Journalism died during the Bush administration of the 2000s. The rule of law is being killed every day by the likes of the AG settlement, the non-prosecution of anybody involved in the mortgage/robo-signing/foreclosure scams and the constitution has been marginalized by congress and presidential orders.
What makes it even more frightful is that it seems to worsen every day. No statistics can be trusted and the words coming from the mouths of politicians ring hollow and void.
Take just a few of today's news items for instance. President Obama - to great fanfare - proposed new tax rates for businesses in the US. Never mind that they have less chance than Lindsay Lohan giving up drinking of ever being signed into law. Sure, they sound good (if by good you mean that the government is somehow entitled to the ridiculous amount of 28% of you company's net profits), but they will be twisted and broken and flailed about by a congress that knows nothing better than obfuscation, ridicule and deceit.
Then take a look at the January's existing home sales figures released by the NAR. Again, the trumpets blared that real estate is recovering, with the month's sales up 4.2% from December to an unadjusted 4.57 million, annualized (why do they annualize these figures in an age in which numbers can be recorded and crunched in an instant? It's easier to FAKE them that way.). Never mind that distressed properties boosted the number materially or that the rate of deals falling through continues to rise or that mortgage applications fell again this week.
But wait a minute. Last month's number was 4.61 million... Well, that was revised down to 4.38 million. So, that gain in December actually turned out to be a decline. Next month, the NAR can revise the January number down too, so that February shows a gain. It's a con. A shell game. And the American public is the mark.
And then there's the Greek deal, the third bailout for the nation in the past two years. It's not enough that the EU is "loaning" them another $172 billion ($130 billion Euros), but this one comes with various strings attached, such as a special account that requires Greece to pay its creditors before paying its own expenses; a permanent monitoring task force from the European Commission; private investors forced to eat 53.5% of the money they've already loaned (and are not getting back); drastic cuts to pensions, the minimum wage, defense spending, healthcare and public sector jobs; and more.
With these new conditions, Greece, for all intents and purposes, is no longer a sovereign state. Rather, it is a debt-slave, a ward of the European Union. Obviously, centuries of in-breeding among Europe's elite ruling class has taught them well how to subjugate the will of the masses.
But maybe there's hope. Since the signing of the Greek deal on Monday, stocks in Europe have done nothing but decline. There is little faith among professional investors that this arrangement will result in anything more than a temporary reprieve and an ultimate default.
In the US, stocks wandered around for the second straight day, though this time they finally bit the bullet and had to fall. Not by much, but any decline in stocks is a blow to the monied interests and they seem worried about Greece, about the price of gas and about the economy in general. And the volume was again absurdly low, because nobody but the banks, hedge funds and HFTs are playing.
They might even begin to worry that people are sick and tired of being lied to and are beginning to wake up.
Wake up, America. How much longer can these charades continue?
Dow 12,938.67, -27.02 (0.21%)
NASDAQ 2,933.17, -15.40 (0.52%)
S&P 500 1,357.66, -4.55 (0.33%)
NYSE Composite 8,094.39, -21.03 (0.26%)
NASDAQ Volume 1,676,971,875
NYSE Volume 3,608,714,750
Combined NYSE & NASDAQ Advance - Decline: 2032-3589
Combined NYSE & NASDAQ New highs - New lows: 162-24
WTI crude oil: 106.28, +0.03
Gold: 1,771.30, +12.80
Silver: 34.25, -0.18
That's what Wall Street, the EU and the central bankers of the world want you to do. Pretend.
Pretend there is a way out for Greece. Pretend that the US economy is growing, that the debtsof all nations will eventually be paid off through the magic of "growth," that your future, and that of your kids' will be secure.
None of it is true. The headlines from the likes of Reuters, Bloomberg and Dow Jones only parrot what the elite bankers and corrupt governments feed them. Journalism died during the Bush administration of the 2000s. The rule of law is being killed every day by the likes of the AG settlement, the non-prosecution of anybody involved in the mortgage/robo-signing/foreclosure scams and the constitution has been marginalized by congress and presidential orders.
What makes it even more frightful is that it seems to worsen every day. No statistics can be trusted and the words coming from the mouths of politicians ring hollow and void.
Take just a few of today's news items for instance. President Obama - to great fanfare - proposed new tax rates for businesses in the US. Never mind that they have less chance than Lindsay Lohan giving up drinking of ever being signed into law. Sure, they sound good (if by good you mean that the government is somehow entitled to the ridiculous amount of 28% of you company's net profits), but they will be twisted and broken and flailed about by a congress that knows nothing better than obfuscation, ridicule and deceit.
Then take a look at the January's existing home sales figures released by the NAR. Again, the trumpets blared that real estate is recovering, with the month's sales up 4.2% from December to an unadjusted 4.57 million, annualized (why do they annualize these figures in an age in which numbers can be recorded and crunched in an instant? It's easier to FAKE them that way.). Never mind that distressed properties boosted the number materially or that the rate of deals falling through continues to rise or that mortgage applications fell again this week.
But wait a minute. Last month's number was 4.61 million... Well, that was revised down to 4.38 million. So, that gain in December actually turned out to be a decline. Next month, the NAR can revise the January number down too, so that February shows a gain. It's a con. A shell game. And the American public is the mark.
And then there's the Greek deal, the third bailout for the nation in the past two years. It's not enough that the EU is "loaning" them another $172 billion ($130 billion Euros), but this one comes with various strings attached, such as a special account that requires Greece to pay its creditors before paying its own expenses; a permanent monitoring task force from the European Commission; private investors forced to eat 53.5% of the money they've already loaned (and are not getting back); drastic cuts to pensions, the minimum wage, defense spending, healthcare and public sector jobs; and more.
With these new conditions, Greece, for all intents and purposes, is no longer a sovereign state. Rather, it is a debt-slave, a ward of the European Union. Obviously, centuries of in-breeding among Europe's elite ruling class has taught them well how to subjugate the will of the masses.
But maybe there's hope. Since the signing of the Greek deal on Monday, stocks in Europe have done nothing but decline. There is little faith among professional investors that this arrangement will result in anything more than a temporary reprieve and an ultimate default.
In the US, stocks wandered around for the second straight day, though this time they finally bit the bullet and had to fall. Not by much, but any decline in stocks is a blow to the monied interests and they seem worried about Greece, about the price of gas and about the economy in general. And the volume was again absurdly low, because nobody but the banks, hedge funds and HFTs are playing.
They might even begin to worry that people are sick and tired of being lied to and are beginning to wake up.
Wake up, America. How much longer can these charades continue?
Dow 12,938.67, -27.02 (0.21%)
NASDAQ 2,933.17, -15.40 (0.52%)
S&P 500 1,357.66, -4.55 (0.33%)
NYSE Composite 8,094.39, -21.03 (0.26%)
NASDAQ Volume 1,676,971,875
NYSE Volume 3,608,714,750
Combined NYSE & NASDAQ Advance - Decline: 2032-3589
Combined NYSE & NASDAQ New highs - New lows: 162-24
WTI crude oil: 106.28, +0.03
Gold: 1,771.30, +12.80
Silver: 34.25, -0.18
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