Can This Fairy Tale Market Be Believed? Fed Stress Tests; Jaime Dimon Pumps JP Morgan

Just a day after the lowest volume session in the last ten years or so, stocks jumped out of the gate and skyrocketed after the usual FOMC we're-doing-nothing release and JP Morgan's announcement of a quarterly dividend hike of $0.05 (from 25 to 30 cents) and a $15 billion stock buyback program.

Apparently Jaime Dimon, Morgan's CEO, thinks his company's stock is too cheap and could not contain his excitement as he jumped the shark, upstaging the Fed's bank stress test announcements which were released just after the close. Hard to figure, since JPM was already up (at yesterday's close) more than 43% since it bottomed out at a close of 28.18 on November 23, just about 3 1/2 months ago. Apparently, Jaime subscribes to the banker's creed, "math is so overrated."

Morgan's timing was appropriate, coming right after the Fed-speak, precisely at 3:00 pm ET, which everyone knows is the "magic hour" for stocks and whirring HFTs. The algos really cranked up hard in the final hour of trading, sending the Dow up by more than 100 points and the NASDAQ shooting past 3000 at the close for the first time since 2000.

As to those stress tests, 15 of 19 banks tested passed with flying colors, of course, being - according to the Fed - sufficiently capitalized to sustain conditions such as 13% unemployment, a 21% decline in housing prices and probably Lindsay Lohan failing another sobriety check. Among those which failed were Citigroup, Sun Trust, Met Life and Ally Financial. It's simply ludicrous to believe in test results administered to subjects which are wholly funded, pampered and coddled by the test-giver.

The Fed's stress tests were supposed to have been released at 4:30 pm ET on Thursday, but apparently some bright economist at the Fed realized that most of America would be occupied with first round games of the NCAA tournament at that juncture, so they, without announcement, sent them out to the rabid financial press corps today, right after the closing bell. Nothing like a little pile on to get the new out on what would have otherwise been a fairly uneventful Tuesday afternoon.

The whole afternoon was such a departure into overt silliness that it can hardly be believed that it's anything more than pure pumping by the financial entities which now own the entire market, from opening trade to closing casino-sounding bells and whistles.

Since individual investors have been pouring out of stocks at a record pace since 2008, the message is pretty clear. Despite all the jolly good news, nobody believes it and nobody is going to be buying it, especially at these new nose-bleed levels.

Join the club. Get completely out of stocks and just watch the stupid party. US euity markets are not real anymore. Since everything is going so swimmingly, who needs stocks? We'll all be millionaires several times over with all the money sloshing around these days. And, even if the markets are completely contrived and meaningless, it's all about perception, anyhow, no?

Dow 13,177.68, +217.97 (1.68%)
NASDAQ 3,039.88, +56.22 (1.88%)
S&P 500 1,395.96, +24.87 (1.81%)
NYSE Composite 8,234.48, +148.20 (1.83%)
NASDAQ Volume 1,681,104,625
NYSE Volume 4,329,381,000
Combined NYSE & NASDAQ Advance - Decline: 4496-1184
Combined NYSE & NASDAQ New highs - New lows: 375-27 (Zounds!)
WTI crude oil: 106.71, +0.37
Gold: 1,694.20, -5.60
Silver: 33.58, +0.17

Golf Beats Dead Markets Any Day of the Week

Because the markets in this country - and just about everywhere else in the world - are so ridiculously contrived, manipulated and thinly-traded (meaning, they can't make realistic markets for a lot of stocks), I decided to cu out of here around 3:00 pm ET and play nine holes of golf.

Now, that may sound like a fairly mundane shirking of responsibility, but the fact of the matter is that I live in Rochester, NY, where the average high for March 12 is about 42 degrees, hardly good golf conditions. Today, however, the high temperature was around 62 degrees, and I played the nine holes in shorts and a short sleeve shirt. Shot a 54, which, for me, isn't bad, considering it was only the second time I've played in two years and outside of a 10 on the 16th hole (we played the back nine), it was a satisfying round, especially the tee shot I plunked down on 18 within 20 feet of the pin, which I then cozied up an tapped in for a par.

Since spending $12 playing golf makes more sense these days than putting money into this ridiculously-valued stocks market, the break from the routine was appreciated. Besides, with Wall Street on hold in anticipation of the Fed's FOMC doing nothing tomorrow besides possibly dropping "hints" on whether there will be more QE (free cash to big banks), it seemed prudent to bug out for an afternoon.

Checking back in here after 9:00 pm ET, it appears I didn't miss much, though this story: Entire Arena Football team cut during pregame meal at Olive Garden caught my attention. Only in America, the home of income disparity, can Peyton Manning, who missed all of last season with a neck injury and is 36 years old (nearing end of career), be traveling around the country checking out which franchise will pay him multiple tens of millions of dollars, while these poor grunts are eating at Olive Garden and being cut because the team, and the league, doesn't want to pay them more than $500 per game. Heck, that's what old AFL players were making back in the sixties.

Anyhow, don't get too excited when the FOMC says the federal funds rate will remain at zero to 0.25% tomorrow, because, after all, God created economists to make weathermen look good.

Also, and correct me if I'm wrong, but today's volume was easily the lowest for any full trading day in the past ten years, probably longer. Think maybe some people have lost faith in the Wall Street money machine? Hmmm? Just maybe?

This is a broken system my friends and it's only a matter of time before it all comes tumbling down. Two weeks, two years? Who knows? The people running the show are really good at impressions, and that's seemingly all that matters these days.

Dow 12,959.71, +37.69 (0.29%)
NASDAQ 2,983.66, -4.68 (0.16%)
S&P 500 1,371.09, +0.22 (0.02%)
NYSE Compos... 8,086.28, -15.83 (0.20%)
NASDAQ Volume 1,343,738,750
NYSE Volume 3,086,209,000
Combined NYSE & NASDAQ Advance - Decline: 2496-3094
Combined NYSE & NASDAQ New highs - New lows: 201-35 (yeah, really?)
WTI crude oil: 106.34, -1.06
Gold: 1,699.80, -11.80 (complete BS)
Silver: 33.41, -0.80 (utterly absurd)

Greece OK for Now; NFP Prints at 233K; Trading Volume Pathetic

Two major news events largely determined the tenor of trade on US markets Friday.

The Greek restructuring plan went as the global banking cartel liked, with non-governmental lenders taking a 53.5% haircut on bad Greek bonds, while the troika's funding facilities remained intact.

Triggering the collective action clauses and a credit "event" according to the ISDA (International Swaps and Derivatives Association) in which affected parties will settle up on March 19. With just a little over $3 billion in Credit Default Swaps affected in the deal, the effect is little more than a rounding error in the international scheme of things, or roughly the amount Bank of America writes off in a typical quarter.

Prior to the open, the BLS offered another positive reading on unemployment, with the official rate staying unchanged at 8.3%, as the US economy created 233K jobs during February, strongly aided by a raft of temporary hires and the usual fudging by the Labor Department.

Like it or not, the impression is that the US continues to emerge from the depths of the Great Recession, as the calendar turned three years old on the current bull market in equities.

For the week, the major indices were little changed, and, despite all the hoopla, trading volume continued to be incredibly weak, especially on Friday, one of the lowest-volume days of the year, which has seen nothing but poor volume.

Market participants appear to be smug over the developments in Greece and Europe, which continues to avert crises on a regular basis, even though Greece is now in a depression, their latest quarter GDP showing a 7.5% decline.

But, hey, it's the weekend and college basketball is heading into its wild March Madness phase, so relax and enjoy seems to be the operative mindset, though commodity prices, especially in oil, gold and silver, tell a different story.

Dow 12,922.02, +14.08 (0.11%)
NASDAQ 2,988.34, +17.92 (0.60%)
S&P 500 1,370.87, +4.96 (0.36%)
NYSE Composite 8,102.13, +19.75 (0.24%)
NASDAQ Volume 1,553,531,125
NYSE Volume 3,527,470,750
Combined NYSE & NASDAQ Advance - Decline: 3837-1653
Combined NYSE & NASDAQ New highs - New lows: 278-26
WTI crude oil: 107.38, +0.80
Gold: 1,711.50, +12.80
Silver: 34.21, +0.38

Market Knee-Jerk Response to Greek Deal is a Bullish One

Though there has been no official announcement, apparently, market participants believe that the Greek restructuring of their private debt (a 53.5% haircut for bond-holders) is a done deal.

This was always assumed to be the case, as nobody wanted a credit event and a triggering of the collective action clauses (though that WILL happen) and thus, force payouts of CDS as if Greece actually did default (which it of course did, which is why it suddenly changed its laws regarding bonds).

If all of this sounds too fantastic or incomprehensible is because all reporting today was based entirely upon rumors. The actual tally of how many and what percentage of the private bond holders agreed to the deal won't be known until 1:00 am ET at the earliest and probably not until 8:00 am ET, when the group arranging the deal will hold a news conference.

As usual, the most measured and unbiased reporting is being done by the Christian Science Monitor which has as its headline, Greece to investors: take a haircut so we can get our bailout and includes this little gem a few paragraphs into the article:

According to the deal the Greek government negotiated with the Institute of International Finance (IIF), which represents most of Greece's private sector creditors, investors will write off 53.5 percent of debt – which amounts to a waiver of 74 percent when the loss in future interest is taken into account – and exchange the rest of bonds they are holding into new papers which are worth less, have a longer maturity, and pay less interest.

So, according to equity market participants, having private bondholders - mostly banks and hedge funds - take a 74% loss on their investments - only to repackage a new deal to the same defaulting party - is better than having a country actually default on its debt and start over. Plus, this agreement paves the way for Greece to take on more debt that it can't possibly repay, ensuring that we'll reprise this particular farce all over again somewhere down the road.

If that is what passes for good news these days, then there's little wonder why most individuals are not invested in the stock markets, nor want to be. It also serves as a prime example of why most people don't trust banks, governments or the media, because instead of having debtors who can't pay back loans default, the prevaricators of this particular brand of financial suicide actually prefer pretending and replaying the same canard over and over again (like the US government and the Fed did with the too big to fail banks in 2008-09), all along adding even more debt, more derivative bets (CDS) and more equity market euphoria to the calculus.

It's a dangerous game, one in which any individual large player could pull the rug out from beneath everyone else at a moment's notice, although that's a scenario unlikely to occur because it would be the equivalent of playing Russian roulette with all chambers loaded.

If today's good news is that Greece isn't defaulting - at least not today - and the markets respond positively, one must ponder what would happen if there was some actual good news. Recalling images of the late Great One, Jackie Gleason, from the Honeymooners, "to the moon, Alice, to the moon."

Dow 12,907.94, +70.61 (0.55%)
NASDAQ 2,970.42, +34.73 (1.18%)
S&P 500 1,365.91, +13.28 (0.98%)
NYSE Composite 8,082.36, +102.58 (1.29%)
NASDAQ Volume 1,620,493,125
NYSE Volume 3,442,931,750
Combined NYSE & NASDAQ Advance - Decline: 4295-1323
Combined NYSE & NASDAQ New highs - New lows: 199-30
WTI crude oil: 106.58, +0.42
Gold: 1,698.70, +14.80
Silver: 33.83, +0.25

Who Goosed the Stock Market? The PPT Did, That's Who

The more one endeavors to make sense of the movements of the major equity indices, the more one becomes convinced that there is major manipulation going on behind the scenes and today was just another prime example to throw into the conspiracy hopper.

While the Dow gained 78 points today, all of the gains were produced in roughly a one hour period, from 10:30 am to 11:30 am ET, on extremely light volume. The Dow moved from barely unchanged (12,760) to a gain of nearly eighty points (12,340), which just so happened to be roughly where it closed.

Did Greece's private debt holders agree to a deal at that hour? No.

Did ADP report a gain of 216,000 net private job gains for February. Sorry, that happened at 8:15 am, and the response was pretty muted.

So... let's see. Low volume (if today wasn't the lowest volume of the year, it was certainly close), stocks sliding back near unchanged right after a major selloff the previous session... like the calvary riding to the rescue in a cliche old time Western movie, the PPT - otherwise known as the Plunge Protection Team and officially known as the President's Working Group on Financial Markets has been hard at work ever since 1988, keeping US stock indices safe from free-falling collapses and lately, from even slight declines that might make the markets appear to be as weak as they really are and boosting stock prices when the trading activity all but dries up.

While Joe and Jane Sixpack reads just the headlines and understands nothing except, "honey, our retirement pension fund is up again!" out in the real world its endless money printing and insider stock manipulations that keep the American Dream alive and well.

It's become so blatant and obvious that it is rarely commented upon by even the most suspicious bloggers and underground financial writers. The mainstream press never mentions that the PPT has offices right in New York's financial district - the easier to send orders flying into the fray - or that said offices are owned by the NY Fed.

So, forget everything you just read and move along. You are not supposed to think, analyze or ask any questions. There's nothing to see here, or at least nothing you're supposed to see. In ten seconds your computer will automatically destroy this posting, and your brain will be wiped clean of the heretical commentary presented.

9...8...7...6...

Dow 12,837.33, +78.18 (0.61%)
NASDAQ 2,935.69, +25.37 (0.87%)
S&P 500 1,352.63, +9.27 (0.69%)
NYSE Composite 7,979.83, +59.69 (0.75%)
NASDAQ Volume 1,560,044,000
NYSE Volume 3,515,704,500
Combined NYSE & NASDAQ Advance - Decline: 4287-1316
Combined NYSE & NASDAQ New highs - New lows: 93-43
WTI crude oil: 106.16, +1.46
Gold: 1,683.90, +11.80
Silver: 33.58, +0.80