Just a day after the Federal Reserve's announcement of an extension of operation twist, reports from Europe, especially one showing a drastic slowdown in German manufacturing (Flash PMI), at its lowest level in three years, sent first, European stocks lower, and then, US stocks to even steeper losses by percentages.
Apparently, European investors had already sensed the slowdown, because the losses were not that severe as in the US. However, many of the European nations are already in or on the verge of recession, and their stock indices already in bear market territory.
For US investors, the Dow took its second-worst one-day plunge of the year, as did the NASDAQ and &P 500, exacerbated by a sharp decline in the Philadelhia Fed Index. The June reading came in at -16.2, on expectations of -0.2 (not sure just who was expecting the somewhat rosy, small negative number).
Oil also took another dip, recording the worst two-day decline in nine months.
The key numbers for stocks and commodities are below. There's little more to say except that this one-day event is just another in a long, continuous stream of deflationary, depressing economic data sets that seemingly has no end in sight.
The collapse of the global economy is like watching a slow-moving hurricane heading for a vulnerable coastal city, a la Katrina wiping out New Orleans a number of years ago. Nobody wants to believe it is going to be horrifying and devastating, but it continues apace and the closer it gets, the more people begin running for cover... or their lives.
There is almost no doubt that the world is heading for a major economic event, one which will not only devastate some of the more notorious crooks on the planet, i.e., bankers, but will also change the players and nature of national and global politics.
Just in time for a presidential election. The timing is just so delicious and sickening.
Read 'em and... don't weep. There's no crying in high finance.
Dow 12,573.57, -250.82 (1.96%)
NASDAQ 2,859.09, -71.36 (2.44%)
S&P 500 1,325.51, -30.18 (2.23%)
NYSE Composite 7,562.51, -195.40 (2.52%)
NASDAQ Volume 1,697,187,750
NYSE Volume 3,915,656,000
Combined NYSE & NASDAQ Advance - Decline: 1105-4507
Combined NYSE & NASDAQ New highs - New lows: 104-83
WTI crude oil: 78.20, -3.25
Gold: 1,565.50, -50.40
Silver: 26.84, -1.55
Thursday, June 21, 2012
Wednesday, June 20, 2012
Market Response to Fed Moves More Worrisome Than Reassuring
It's funny how everything seems to work out just as planned, but markets respond in their own unusual ways.
Such was the case today, as the FOMC announced no substantive changes to their ZIRP program and extended "operation twist," designed to spur the economy by having the Fed buy up the long end of the yield curve.
Memo to Bernanke: It ain't working.
All the tricks and ploys the central bankers have up their collective sleeves have now been tried and proven to have failed. Massive injections of liquidity may have temporarily bolstered the balance sheets of some of the world's largest insolvent banks - both here in the US and in Europe - but the one proven method of clearing out bad debt that hasn't been tried - default, repudiation, bankruptcy and restructuring - is the only way the world economy is ever going to get a solid kick-start.
The Fed and its counterparts in Europe, Japan and China seem to believe they can somehow suspend rules of economics and mathematical certainty. They are wrong, and continue to be proven so every day the global economy continues to carouse through its now nearly four-year-old funk.
The action on the stock market today can best be described in horse racing terms: it was what handicappers like to call a "Z." It's when a horse starts slow, rallies in the middle of the race and then fades down the stretch to the wire. Sometimes, it's a sign that the horse may do well in a subsequent race; usually, it means little, other than the horse was ridden badly or suffers from a lack of stamina.
That analogy could easily be applied to the stock market. It has been "ridden badly" by all the desperate attempts to justify prices and it sure looks like it has been running on empty for some time now.
Today's response to the policy decision to keep rates at or near zero and the Fed's tepid reliance on the "twist" program that only produces marginal support for the economy if any at all, is another shining example of the futility of central baking, government overspending and general malaise. Now, even the cheaters, swindlers and fraudsters on Wall Street aren't happy.
Serves them all right, since most of them should have been serving long prison terms by now. Well, maybe there's hope. After all, the price of gas at the pump keeps going down nearly every day. If nothing else, at least it will be cheaper to take the car out when it's time to head for the hills.
Dow 12,824.09, -13.24 (0.10%)
NASDAQ 2,930.45, +0.69 (0.02%)
S&P 500 1,355.70, -2.28 (0.17%)
NYSE Composite 7,747.91, -18.35 (0.24%)
NASDAQ Volume 1,477,882,125
NYSE Volume 3,637,796,250
Combined NYSE & NASDAQ Advance - Decline: 2639-2903
Combined NYSE & NASDAQ New highs - New lows: 156-27
WTI crude oil: 81.80, -2.23
Gold: 1,615.80, -7.40
Silver: 28.39, +0.02
Such was the case today, as the FOMC announced no substantive changes to their ZIRP program and extended "operation twist," designed to spur the economy by having the Fed buy up the long end of the yield curve.
Memo to Bernanke: It ain't working.
All the tricks and ploys the central bankers have up their collective sleeves have now been tried and proven to have failed. Massive injections of liquidity may have temporarily bolstered the balance sheets of some of the world's largest insolvent banks - both here in the US and in Europe - but the one proven method of clearing out bad debt that hasn't been tried - default, repudiation, bankruptcy and restructuring - is the only way the world economy is ever going to get a solid kick-start.
The Fed and its counterparts in Europe, Japan and China seem to believe they can somehow suspend rules of economics and mathematical certainty. They are wrong, and continue to be proven so every day the global economy continues to carouse through its now nearly four-year-old funk.
The action on the stock market today can best be described in horse racing terms: it was what handicappers like to call a "Z." It's when a horse starts slow, rallies in the middle of the race and then fades down the stretch to the wire. Sometimes, it's a sign that the horse may do well in a subsequent race; usually, it means little, other than the horse was ridden badly or suffers from a lack of stamina.
That analogy could easily be applied to the stock market. It has been "ridden badly" by all the desperate attempts to justify prices and it sure looks like it has been running on empty for some time now.
Today's response to the policy decision to keep rates at or near zero and the Fed's tepid reliance on the "twist" program that only produces marginal support for the economy if any at all, is another shining example of the futility of central baking, government overspending and general malaise. Now, even the cheaters, swindlers and fraudsters on Wall Street aren't happy.
Serves them all right, since most of them should have been serving long prison terms by now. Well, maybe there's hope. After all, the price of gas at the pump keeps going down nearly every day. If nothing else, at least it will be cheaper to take the car out when it's time to head for the hills.
Dow 12,824.09, -13.24 (0.10%)
NASDAQ 2,930.45, +0.69 (0.02%)
S&P 500 1,355.70, -2.28 (0.17%)
NYSE Composite 7,747.91, -18.35 (0.24%)
NASDAQ Volume 1,477,882,125
NYSE Volume 3,637,796,250
Combined NYSE & NASDAQ Advance - Decline: 2639-2903
Combined NYSE & NASDAQ New highs - New lows: 156-27
WTI crude oil: 81.80, -2.23
Gold: 1,615.80, -7.40
Silver: 28.39, +0.02
Tuesday, June 19, 2012
Positive Rumors Drive Speculative Bets Higher
While world leaders at the G20 conference in Los Cabos, Mexico, dithered over Syria and mostly glad-handed each other over a draft outline for a closer European Union (isn't it already a "union?" How much closer can these failing countries and their failing economies get?), both European and US stock markets looked to the rumor mills for reasons to buy more stocks.
They found them in the usual places: various reports suggesting that the Federal Reserve would commence another round of QE with their announcement of ZIRP - for the umpteenth time - Wednesday, just after noon; ideas being floated around that Greece is close to forming a government that would agree to austere terms dictated by Germany and stay in the Eurozone; and, more elitist propaganda that Spain's banks would somehow be saved, thus keeping the Spanish government in power and that Germany would find a way to soften its stance on that awful austerity in Greece.
Some of the nonsense being thrown around world financial news desks may actually come to fruition, most likely among them the Fed's unwillingness to stop printing worthless US dollars non-stop and the European impulse to keep Spain's insolvent banking system from imploding - at least for a few more weeks or months.
With rumors running rampant on a day that was largely devoid of real news, speculators took the signals (make that, "the HFT algos were tuned up to high volume risk on frequencies") and bid up stocks to a five-week high on the Dow, with the other major indices following along for the ride, before fading late in the session and into the close.
It appears that the markets and their insider specialists are trading on some faint hope that the global financial system will not be melting down over the long, hot summer, and the first signs should be available as early as non-ish on Wdnesday, when the Fed makes a policy statement.
We shall stay tuned.
Dow 12,837.33, +95.51 (0.75%)
NASDAQ 2,929.76, +34.43 (1.19%)
S&P 500 1,357.98, +13.20 (0.98%)
NYSE Composite 7,766.25, +103.97 (1.36%)
NASDAQ Volume 1,828,591,375
NYSE Volume 3,784,083,500
Combined NYSE & NASDAQ Advance - Decline: 4529-1105
Combined NYSE & NASDAQ New highs - New lows: 250-29
WTI crude oil: 84.03, +0.76
Gold: 1,623.20, -3.80
Silver: 28.37, -0.30
They found them in the usual places: various reports suggesting that the Federal Reserve would commence another round of QE with their announcement of ZIRP - for the umpteenth time - Wednesday, just after noon; ideas being floated around that Greece is close to forming a government that would agree to austere terms dictated by Germany and stay in the Eurozone; and, more elitist propaganda that Spain's banks would somehow be saved, thus keeping the Spanish government in power and that Germany would find a way to soften its stance on that awful austerity in Greece.
Some of the nonsense being thrown around world financial news desks may actually come to fruition, most likely among them the Fed's unwillingness to stop printing worthless US dollars non-stop and the European impulse to keep Spain's insolvent banking system from imploding - at least for a few more weeks or months.
With rumors running rampant on a day that was largely devoid of real news, speculators took the signals (make that, "the HFT algos were tuned up to high volume risk on frequencies") and bid up stocks to a five-week high on the Dow, with the other major indices following along for the ride, before fading late in the session and into the close.
It appears that the markets and their insider specialists are trading on some faint hope that the global financial system will not be melting down over the long, hot summer, and the first signs should be available as early as non-ish on Wdnesday, when the Fed makes a policy statement.
We shall stay tuned.
Dow 12,837.33, +95.51 (0.75%)
NASDAQ 2,929.76, +34.43 (1.19%)
S&P 500 1,357.98, +13.20 (0.98%)
NYSE Composite 7,766.25, +103.97 (1.36%)
NASDAQ Volume 1,828,591,375
NYSE Volume 3,784,083,500
Combined NYSE & NASDAQ Advance - Decline: 4529-1105
Combined NYSE & NASDAQ New highs - New lows: 250-29
WTI crude oil: 84.03, +0.76
Gold: 1,623.20, -3.80
Silver: 28.37, -0.30
Monday, June 18, 2012
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.
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
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.
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
Friday, June 15, 2012
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
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
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