ECB president Mario Draghi pleased just about everyone when he unveiled the latest bond-purchasing scheme by the European Central Bank at a news conference early this morning. Stocks rose across Europe and the Americas with the NASDAQ reaching 11 1/2 year highs.
Portions of the new ECB bond purchase program, which is designed to purchase sovereign bonds with maturities of 1, 2, and 3 years, were purposely leaked to the press in the days and weeks prior to the official announcement, which came after the ECB's rate policy meeting (kept the official bank lending rate at 0.75%), during afternoon trading on European bourses and prior to the open of trading in New York.
The plan, called by Draghi, Outright Monetary Transactions (OMT) rests on five main pillars: 1) Strict conditionality will be applied to bond purchases 2) There will be unlimited purchases of bonds with a maturity of one to three years 3) The ECB will not have seniority 4) All transactions will be 'sterilized' 5) Purchases will be reported monthly.
Countries wishing to participate (notably Spain and Italy) will have to make a formal application and adhere to conditions, mostly in the form of austerity measures, something at which many governments have balked.
While the stock markets advanced broadly, the S&P reaching a four-year high there are some land-mines over which the ECB will have to traverse in order to make the program a success.
First, there is the matter of legality, upon which the German high court will rule on Wednesday, September 12. The court is reviewing previous bond-buying programs by the ECB, such as the ESM, to determine if such plans comply the rigors of the German constitution. If the court decides against such plans, everything in Europe will be thrown into chaos, as Germany is the major funder of bailout programs.
The matter of nations applying for funding is another sticking point. Spain and Italy are in fiscal crises, but the political leaders are wary of conditionality, submitting their government to severe austerity measures, such as the recently-proposed six-day work week for Greeks. Additionally, sticking to the conditions ofthe loans is often difficult if not impossible, though the OMT specifically says that bond purchases will be curtailed if conditions are not met.
with the ECB now in the Fed's arena of massive money printing, what lies ahead for the US and global economies is next week's FOMC meeting, at which it is widely believed Fed chairman Ben Bernanke will unveil some new liquidity program of his own, commonly called QE3, though recent economic data, such as today's August ADP employment report and the ISM Services data would seem to indicate that further easing by the Fed is not warranted nor wise at this juncture.
Thus, positive economic data, a recovering economy and anything outside the stock market viewed as positive to growth will be viewed by Wall Street as an impediment to more easy money, likely causing a sell-off in equities.
Tomorrow's non-farm payroll report for August is the linchpin to Fed action. Anything over 150,000 net new jobs may cause the Fed to hold back from further easing. There's also widespread belief that the Fed will be reluctant to move so close to the US presidential elections, not wishing to be perceived as a political entity.
Next week is shaping up to be epic, one way or the other.
Dow 13,292.00, +244.52 (1.87%)
NASDAQ 3,135.81, +66.54 (2.17%)
S&P 500 1,432.12, +28.68 (2.04%)
NYSE Composite 8,160.40, +168.39 (2.11%)
NASDAQ Volume 1,883,115,000
NYSE Volume 3,919,524,250
Combined NYSE & NASDAQ Advance - Decline: 4360-1203
Combined NYSE & NASDAQ New highs - New lows: 494-39
WTI crude oil: 95.53, +0.17
Gold: 1,705.60, +11.60
Silver: 32.67, +0.35
Thursday, September 6, 2012
Wednesday, September 5, 2012
Nothing Moves in Advance of Draghi's ECB Announcement
Remember those days of late August, when the markets traded in narrow ranges and closed within a tiny fraction of a percentage point on super-low volume?
Today was another one of those days. Stock pickers are waiting for the ECB meeting on Thursday, when president Mario Draghi is supposed to release details of his plan to fund all of the peripheral nations that are broke, bankrupt or about to be.
Last week, everyone waited for the Chairman of the Federal Reserve, Ben Bernanke, to give a speech at Jackson Hole, Wyoming, and signal that the Fed was soon to unleash more free capital into the corrupt, dysfunctional, insolvent banking system.
Now we wait for Draghi. It's a complete disaster unfolding right before our eyes and barely worth commenting upon because Bernanke didn't say anything the markets didn't already know, and, in all likelihood, neither will Draghi. Either that, or he'll do what the Europeans are so good at, making funny noises, promising something for a later date, your basic can-kicking exercise.
The clock is ticking...
Dow 13,047.48, +11.54 (0.09%)
NASDAQ 3,069.27. -5.79 (0.19%)
S&P 500 1,403.44, -1.50 (0.11%)
NYSE Composite 7,992.01, -10.31 (0.13%)
NASDAQ Volume 1,432,807,125
NYSE Volume 2,782,468,000
Combined NYSE & NASDAQ Advance - Decline: 2308-2724
Combined NYSE & NASDAQ New highs - New lows: 274-59
WTI crude oil: 95.36, +0.06
Gold: 1,694.00, -2.00
Silver: 32.33 -0.08
Today was another one of those days. Stock pickers are waiting for the ECB meeting on Thursday, when president Mario Draghi is supposed to release details of his plan to fund all of the peripheral nations that are broke, bankrupt or about to be.
Last week, everyone waited for the Chairman of the Federal Reserve, Ben Bernanke, to give a speech at Jackson Hole, Wyoming, and signal that the Fed was soon to unleash more free capital into the corrupt, dysfunctional, insolvent banking system.
Now we wait for Draghi. It's a complete disaster unfolding right before our eyes and barely worth commenting upon because Bernanke didn't say anything the markets didn't already know, and, in all likelihood, neither will Draghi. Either that, or he'll do what the Europeans are so good at, making funny noises, promising something for a later date, your basic can-kicking exercise.
The clock is ticking...
Dow 13,047.48, +11.54 (0.09%)
NASDAQ 3,069.27. -5.79 (0.19%)
S&P 500 1,403.44, -1.50 (0.11%)
NYSE Composite 7,992.01, -10.31 (0.13%)
NASDAQ Volume 1,432,807,125
NYSE Volume 2,782,468,000
Combined NYSE & NASDAQ Advance - Decline: 2308-2724
Combined NYSE & NASDAQ New highs - New lows: 274-59
WTI crude oil: 95.36, +0.06
Gold: 1,694.00, -2.00
Silver: 32.33 -0.08
Tuesday, September 4, 2012
Stocks Fail on Stormy Tuesday; The Misinformation Age
Well, it's not Monday, but it is the first day of the workweek, so stocks must go down. And they did, with the exception of the NASDAQ, which went from the worst-performing index to the best in a matter of 40 minutes - from roughly 2:00 pm to 2:40 pm EDT, going from a loss of 10 points to a gain of 15.
The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.
So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.
Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.
Welcome to the age of heightened misinformation.
There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.
I'll take lower levels of pesticides in my urine for $400, Alex.
Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?
Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.
Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.
Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.
Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.
Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.
Just to refresh one's memory, here's a nifty video of why we're where we are.
Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97
The Dow and S%P tagged along somewhat, but that drove the NAZ higher was none other than Apple (AAPL), which recorded almost half of its 9.73-point gain during that time period.
So, why then does CNBC report that the surge in stocks - the Dow was down nearly 115 points at the lows of the day, the NASDAQ off more than 26 - was due to a tweet by PIMCO's Bill Gross, who, mentioning that Mario Draghi, head of the ECB, willingness to offer 1, 2, and 3-year "loans" (bond purchases) to sovereign nations in the Eurozone, was reflationary and that investors should buy GOLD, TIPS AND REAL ASSETS.
Note that Gross did not say "STOCKS," though CNBC, the masters of misinformation, wishes the assembled masses of hoe viewers would believe that Mr. Gross is a perma-bull, when the exact opposite is true.
Welcome to the age of heightened misinformation.
There was a story today out of Stanford about organic foods not being any better than mass-produced, GMO, pesticide-riddled crap that drives US corporate agribusiness.
Two studies of children consuming organic and conventional diets did find lower levels of pesticide residues in the urine of children on organic diets, though the significance of these findings on child health is unclear, noted the researchers.
I'll take lower levels of pesticides in my urine for $400, Alex.
Just guessing, but could the major contributors to these Stanford researchers possibly be Monsanto and the US Dept. of Agriculture?
Other misinformation predominates what passes for news and journalism these days. For instance, according to the ECB's Mario Draghi, buying 1, 2, and 3-year bonds from sovereign nations does not violate the EU's basic treaty, which forbids such actions... OK. Obama and Romney sound like they differ widely on policies, when both, in fact, are nothing but shills for wealthy individuals and corporations which fund their campaigns. Facebook has lost 50% of market value since its IPO four short months ago, but it's still a solid company.
Trading volume, which was supposed to rebound as soon as all the Wall Street heavy hitters returned after Labor Day, was only a little better today than during July and August. US markets are so thinly-traded that manipulation by a group of well-timed players or even the PPT is easier than ever.
Keep an eye on gold and silver, maybe especially silver, which has exploded over the past three weeks. Gold's being suppressed below $1700, though it seems the central banking cartel cannot hold that level much longer. The Dow fell below 13,000 today, but was pumped back above it, ditto the S&P at 1400. These trades and ranges are due to break down soon.
Today's ISM reading of 49.6 was the third in a row showing contraction, though now, according to Steve Liesman of CNBC. the number to watch is 42.6, which would show contraction for the entire economy. Pure bunk.
Construction spending was off 0.9% in July. That a sizable decline, and why stocks fell out after the two reports at 10:00 am EDT.
Just to refresh one's memory, here's a nifty video of why we're where we are.
Dow 13,035.94, -54.90 (0.42%)
NASDAQ 3,075.06, +8.10 (0.26%)
S&P 500 1,404.94, -1.64 (0.12%)
NYSE Composite 8,002.31, -12.61 (0.16%)
NASDAQ Volume 1,505,270,625
NYSE Volume 3,086,772,250
Combined NYSE & NASDAQ Advance - Decline: 3319-2194
Combined NYSE & NASDAQ New highs - New lows: 288-64
WTI crude oil: 95.30, -1.17
Gold: 1,698.40, +10.80
Silver: 32.41, +0.97
Friday, August 31, 2012
Bernanke's Jackson Speech Self-Fulfilling for Wall Street
Well, was it worth the wait?
Fed Chairman Ben Bernake delivered his speech at Jackson Hole, much to the delight, it seems, to the hordes of hungry bankers and investors wallowing around the money trough from which their riches are made.
The Chairman didn't say much, except what he always says: that the Fed would be ready to add stimulus when needed. The Wall Street parasites took this as a sure sign that more easy money, in the form of QE3, would be forthcoming, likely as of the September FOMC meeting in about two weeks.
In the meantime, stocks jumped, slumped and humped back to highs of just over 13,150 on the Dow, just in case anybody's interested heading into the long weekend.
As usual, stocks have to go higher on Friday, as they have in just about every instance since the end of May.
Anecdotally, Wall Street exhibits all the traits of wild herds, following wherever they are led, this time toward all risk assets, including stocks and commodities. It's been reported that food prices have already risen some 10-20% in poorer nations, which will eventually foment riots, panic and revolution, thoughthat doesn't matter a whit to the wizards of Wall Street or their political counterparts, Al that matters is a rising stock market, even though it may lead to the eventual destruction of the currency and the global economy to boot.
It's a sick game, with seemingly no end in sight.
Labor Day. What an odd name for a holiday. It should be called slaver day, because other than a few sporadic holidays and a week or two of annual vacation, americans and workers in the "civilized" world are nothing more than slaves to debt.
Try not to ponder that fate much over the next few days of what should be a relaxing, peaceful weekend.
Free houses for Everyone!
Dow 13,090.76, +90.05 (0.69%)
Nasdaq 3,066.96, +18.25 (0.60%)
S&P 500 1,406.57, +7.09 (0.51%)
NYSE Composite 8,014.93 +48.69(0.61%)
Combined NYSE & NASDAQ Advance - Decline: 3658-1811
Combined NYSE & NASDAQ New highs - New lows: 184-37
WTI crude oil: 96.47, +1.85
Gold: 1,687.60, +30.50
Silver: 31.37, +1.00
Fed Chairman Ben Bernake delivered his speech at Jackson Hole, much to the delight, it seems, to the hordes of hungry bankers and investors wallowing around the money trough from which their riches are made.
The Chairman didn't say much, except what he always says: that the Fed would be ready to add stimulus when needed. The Wall Street parasites took this as a sure sign that more easy money, in the form of QE3, would be forthcoming, likely as of the September FOMC meeting in about two weeks.
In the meantime, stocks jumped, slumped and humped back to highs of just over 13,150 on the Dow, just in case anybody's interested heading into the long weekend.
As usual, stocks have to go higher on Friday, as they have in just about every instance since the end of May.
Anecdotally, Wall Street exhibits all the traits of wild herds, following wherever they are led, this time toward all risk assets, including stocks and commodities. It's been reported that food prices have already risen some 10-20% in poorer nations, which will eventually foment riots, panic and revolution, thoughthat doesn't matter a whit to the wizards of Wall Street or their political counterparts, Al that matters is a rising stock market, even though it may lead to the eventual destruction of the currency and the global economy to boot.
It's a sick game, with seemingly no end in sight.
Labor Day. What an odd name for a holiday. It should be called slaver day, because other than a few sporadic holidays and a week or two of annual vacation, americans and workers in the "civilized" world are nothing more than slaves to debt.
Try not to ponder that fate much over the next few days of what should be a relaxing, peaceful weekend.
Free houses for Everyone!
Dow 13,090.76, +90.05 (0.69%)
Nasdaq 3,066.96, +18.25 (0.60%)
S&P 500 1,406.57, +7.09 (0.51%)
NYSE Composite 8,014.93 +48.69(0.61%)
Combined NYSE & NASDAQ Advance - Decline: 3658-1811
Combined NYSE & NASDAQ New highs - New lows: 184-37
WTI crude oil: 96.47, +1.85
Gold: 1,687.60, +30.50
Silver: 31.37, +1.00
Thursday, August 30, 2012
Markets Edge Closer to Reality on Eve of Bernanke Speech
As has been ongoing for the whole week, markets took a decided turn negative today on strong sentiment and comments from a few Fed governors that Ben Bernanke's speech tomorrow at Jackson Hole will include no overt nor hidden message that the Fed is ready to commit to another round of QE, bond purchases or any kind of policy easing.
That's the current betting, and there's little more than that moving markets.
Here is a good summary of what Wall Street is expecting in advance of the speech, from the Wall Street Journal, along with excerpts from analysts from leading financial institutions.
Scheduled for 10:00 am EDT, the Fed Chairman's speech, "Monetary Policy Since the Crisis" has had the markets gripped for weeks.
At the very least, by 11:00-11:30 tomorrow, everyone will have an inkling of what the Fed plans to do, if anything, and possibly when.
Then, everything can return to normal - whatever that is - after the Labor Day holiday.
Dow 13,000.71, -106.77 (0.81%)
NASDAQ 3,048.71, -32.47 (1.05%)
S&P 500 1,399.48, -11.01 (0.78%)
NYSE Composite 7,966.24, -65.41 (0.81%)
NASDAQ Volume 1,218,830,750
NYSE Volume 2,534,874,500
Combined NYSE & NASDAQ Advance - Decline: 1481-3987
Combined NYSE & NASDAQ New highs - New lows: 118-54
WTI crude oil: 94.62, -0.87
Gold: 1,657.10, -5.90
Silver: 30.37, -0.47
That's the current betting, and there's little more than that moving markets.
Here is a good summary of what Wall Street is expecting in advance of the speech, from the Wall Street Journal, along with excerpts from analysts from leading financial institutions.
Scheduled for 10:00 am EDT, the Fed Chairman's speech, "Monetary Policy Since the Crisis" has had the markets gripped for weeks.
At the very least, by 11:00-11:30 tomorrow, everyone will have an inkling of what the Fed plans to do, if anything, and possibly when.
Then, everything can return to normal - whatever that is - after the Labor Day holiday.
Dow 13,000.71, -106.77 (0.81%)
NASDAQ 3,048.71, -32.47 (1.05%)
S&P 500 1,399.48, -11.01 (0.78%)
NYSE Composite 7,966.24, -65.41 (0.81%)
NASDAQ Volume 1,218,830,750
NYSE Volume 2,534,874,500
Combined NYSE & NASDAQ Advance - Decline: 1481-3987
Combined NYSE & NASDAQ New highs - New lows: 118-54
WTI crude oil: 94.62, -0.87
Gold: 1,657.10, -5.90
Silver: 30.37, -0.47
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