Grexit or Spanplosion, Markets in Flux; Dan Dorfman Dead at 80

This post is dedicated to Dan Dorfman, one of the pioneers and true legends of financial journalism, who passed away Saturday in New York.

The world of journalism should deeply mourn his departure, because Dan was one of the very best and brightest of all time. From his early work at the Wall Street Journal and USA Today through a TV career with CNN and CNBC to his final days with the New York Sun and Huffington Post, Dan Dorfman was always keen to break a story first, never skimping on relevance and factuality.

Throughout his carer, Dan Dorfman was as engaged as he was engaging and entertaining, no small feat, considering the dryness of his main subjects, business and finance.

By comparison, what passes for financial reporting today falls incredibly short of his standards, which he not only set, but owned, in as complete a manner as any writer or reporter could ever be expected. Words cannot fully express the magnitude of this humble man in the craft of journalism, though this brief insight by Joan E. Lappin, CFA, of Gramercy Capital Mgt. is a nice touch.

Godspeed, Dan Dorfman. Rest in peace.

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As for US financial markets following the highly-anticipated elections in Greece over the weekend, which solved nothing, they are a shambles. Stocks traded in a dull, narrow range and defied the gravity of the situation in Europe to no small degree.

Bank stocks in Euopean bourses - where it's getting very real - did a seven percent turnabout to the downside, as those on the continent have perception correct: the condition of the Eurozone and the finances of its member states and their banks are in a truly horrific place. Whether Greece departs the Euro (Grexit) or Spain comes completely unglued (Spanplosion), the endgame is mostly at hand, and it's likely too late to save from complete annihilation, which, of course, would constitute a repudiation of trillions of dollars, euros and yen of personal, bank and sovereign debt. A complete reset is in the cards, only a matter of time before the world is thrust into utter chaos, which some say is pre-planned.

Whether the world's central bankers continue to print at full speed around the clock or allow deflation to take full control, the result will be the same, though most people will be barely affected, since everything is relative. $100,000 today could be worth only $15,000 tomorrow, but a new car would cost $3000 instead of $30000.

The world will survive, though the financial system of fiat money, digitized out of thin air, will eventually end, as have all such regimes, schemes and plots.

Until then, we wait and watch as little makes sense and debt piles up higher and higher around the world. There's really nothing to it all, other than to be a good Boy Scout, always prepared.

Dow 12,741.82, -25.35 (0.20%)
NASDAQ 2,895.33, +22.53 (0.78%)
S&P 500 1,344.78, +1.94 (0.14%)
NYSE Composite 7,662.29, -1.98 (0.03%)
NASDAQ Volume 1,583,473,625
NYSE Volume 3,204,991,000
Combined NYSE & NASDAQ Advance - Decline: 3083-2534
Combined NYSE & NASDAQ New highs - New lows: 176-84
WTI crude oil: 83.27, -0.76
Gold: 1,627.00, -1.10
Silver: 28.67, -0.07

Nah

Really?

Dow 12,767.17, +115.26 (0.91%)
Nasdaq 2,872.80, +36.47 (1.29%)
S&P 500 1,342.84, +13.74 (1.03%)
NYSE Composite 7,664.27 +81.44 (1.07%)
NYSE Volume 4,401,564,500.00
Nasdaq Volume... 2,085,309,250
Combined NYSE & NASDAQ Advance - Decline: 3919-1685
Combined NYSE & NASDAQ New highs - New lows: 91-47
WTI crude oil: 84.03, +0.12
Gold: 1,628.10, +8.50
Silver: 28.74, +0.33

Stocks Gain in Yo-Yo Market

In keeping with the theme of this week's manipulation, er, trading, in the complete insider-protected day-trading megalomaical world of Wall Street, markets ticked higher again as only a smattering of news from across the Atlantic reached America's shores.

One might expect that should developments in Europe continue on their sliding downard trajectory, that America's media elite might impose some kind of blackout to prevent US markets from taking an equally-deserving dive.

Stocks got off to a slow start, but were quickly ramped higher by HFTs, hedgies and bank-owned brokerages, which took no heed of this week's higher initial unemployment claims: 386K, on expectations of 375K, after last week's mandatory revision (every week) from 377K to 380K.

CPI slipped 0.3%, a deflationary number, though the all-important (that's sarcasm, folks) Core CPI, excluding food and energy (which nobody really needs - more sarcasm) ticked up 0.3%.

The government's current account balance showed a deficit for the first quarter of $137.3B, which is something of a surprise, as the real numbers are likely much larger.

Stocks have kept to the meme of the week: down, up, down, up, and if Friday comes in with a red number, Money Daily will have correctly predicted the market move four straight days, having made no prediction for Monday. Magic!


Dow 12,651.91, +155.53 (1.24%)
Nasdaq 2,836.33, +17.72 (0.63%)
S&P 500 1,329.10, +14.22 (1.08%)
NYSE Composite 7,582.83, +76.41 (1.02%)
NYSE Volume 3,687,722,500
Nasdaq Volume 1,641,362,250
Combined NYSE & NASDAQ Advance - Decline: 3941-1661
Combined NYSE & NASDAQ New highs - New lows: 62-57
WTI crude oil: 83.91, +1.29
Gold: 1,619.60, +0.20
Silver: 28.41. -0.53

Stocks on Roller Coaster Ride with Greek Vote Looming; Greenspan Calls Euro a Failure

As mentioned in this space yesterday, the day-trading hedge funds and bank-owned brokerages (please, bring back Glass-Steagall) booked profits early in the day and went net short, their nifty algos doing the heavy lifting, as stocks drifted early and sank in the afternoon, making the market pulse for the week, down, up, down.

Today's action had all the earmarks of a seminal decline, with no oomph in the morning and a swift, brutal selloff which developed some serious downside momentum after 2:00 pm EDT.

While there was little to no news out of Europe to affect US stocks besides the downgrade of Spain from B to CCC+ by ratings firm Egan Jones, there was plenty right here on the home front.

JP Morgan Chase (JPM) CEO Jamie Dimon testified before the Senate Banking committee concerning his firm's $2 billion trading loss, though that made-for-TV event was little more than a dog-and-pony show, as most - if not all - of the committee members were recipients of sizable campaign contributions from the financial interests represented by the TBTF Wall Street banks, JPM a prominent donor to campaign slush funds of both parties.

Former Federal Reserve Chairman, Alan Greenspan, made some noise about the crisis in Euroland, saying that while the Euro was a "noble experiment" it is being proven ultimately a failure.

The consummate financial criminal enabler, Greenspan was an ardent advocate for repeal of Glass-Steagal beck in 1987, according to this flashback article by American Banker.

While market participants digested the day's disturbing headlines and news stories, stocks exhibited the kind of behavior befitting a system on the verge of breaking down, though outright panic still appears to be just a glimmer on the horizon.

Breadth was on the negative side for the day and new lows outpaced new highs for the second session consecutively. Oil continued its descent, continuing in bear territory following the absurd February run-up, while the fear trade in gold pressed higher, though silver continues to be suppressed, mostly by Blythe Masters, a protege of JPM's Dimon.

As the week progresses, however, a rebalancing of the S&P 500 and quadruple-witching of options and futures on Friday should determine the tenor of trading for the balance.

Dow 12,496.38, -77.42 (0.62%)
NASDAQ 2,818.61, -24.46 (0.86%)
S&P 500 1,314.88, -9.30 (0.70%)
NYSE Composite 7,506.29, -51.52 (0.68%)
NASDAQ Volume 1,528,772,500
NYSE Volume 3,363,560,750
Combined NYSE & NASDAQ Advance - Decline: 1747-3744
Combined NYSE & NASDAQ New highs - New lows: 75-112
WTI crude oil: 82.62, -0.70
Gold: 1,619.40, +5.60
Silver: 28.94, -0.01

Welcome Back, Volatility: Miracle Market Melt-up

Noting that the markets in the US were markedly higher this (turnaround) Tuesday, one would generally assume that some of the conditions that caused Monday's share collapse had been addressed and causing markets and investors to return to a more benign trading regimen.

Such an assumption would be, of course, dead wrong, because nothing really changed overnight. In fact, one could even go so far as to suggest that issues regarding the bailout of Spain's insolvent banks - which loan money to the insolvent Spanish government - had actually worsened, in Europe, at least.

First, there's the widespread assumption that the 100 billion euro bailout was already a done deal. It's not; not by any means. The German parliament still has to pass legislation to approve whatever funding is made available, and by which facility.

Second, the deal was supposed to have no strings attached, i.e., Spain would not have to agree to any austerity measures or fiscal controls. After all the deal was for the banks, not the government. Not so fast, my friends. Germany wants some guarantees of fiscal control and Finland has also made overtures about the need for substantial collateral.

And, if those two points are not enough, Spain will have to finance some of the bank debt itself, which is the epitome of the twisted pretzel that is the Eurozone. The Spanish government will borrow money to loan to the banks, which in turn fund the government. It's like borrowing money to loan to a friend who loans you money to pay off your debt, and we all know how those kinds of schemes turn out.

Additionally, in the utmost of ironies, Italy, the next nation in line for a likely bailout, will be borrowing money at 6% to loan to Spain at 3%. Lovely. Apparently, the Italians have been taking in a bit too much vino and forgot their 4th grade math.

So, what really changed to reverse the one-day trend lower and turn it up a few notches? Algos, naturally, the computer software that takes care of more than 85% off all trades on a daily basis, were re-programmed for a risk-on event, even though none actually took place. Around about 10:30 am EDT, with the major averages stumbling into the red, the correct knobs were turned and presto! all was well again at the Wall Street Zombie Casino.

From that time-stamp until the close, it was nothing but champagne and roses. Whoopie! Of course, the underlying theme of day-trading in both stocks and options by the hedgies and brokerages in advance of Friday's quadruple-witching event may have had a little to do with today's wicked upside.

Therein we have the week's trading strategy: Short Monday, long Tuesday, short Wednesday, long Thursday, and Friday, you're on your own, because over the weekend, Greece will once again go to the polls to see if they can elect a government in a country that neither has one nor - in the rare event that it will - heeds its dictates.

Greece could go belly up and back to the drachma, go pro-Euro and stick with the asset-stripping austerity, or alternately devolve into complete anarchy or continue to function on a day-to-day basis, essentially going sideways and solving nothing. Whatever happens in Greece, one thing is for certain: it's not going to be the final solution.

There was something of a "tell" to today's trading that belied the effectiveness of the rally. New lows beat new highs nearly 2-1.

Party on!

Dow 12,573.80, +162.57 (1.31%)
NASDAQ 2,843.07, +33.34 (1.19%)
S&P 500 1,324.18, +15.25 (1.17%)
NYSE Composite 7,557.82, +98.55 (1.32%)
NASDAQ Volume 1,589,679,500
NYSE Volume 3,400,954,250
Combined NYSE & NASDAQ Advance - Decline: 4156-1436
Combined NYSE & NASDAQ New highs - New lows: 64-113
WTI crude oil: 83.32, +0.62
Gold: 1,613.80, +17.00
Silver: 28.95, +0.33