Possibly more than anything else, the horrific -12.5 print by the Philadelphia Fed was responsible for the added declines on Thursday, following Wednesday's setback after the FOMC minutes from january were announced.
The market was expecting a reading of 1.5 from the Philly Fed in its survey of business conditions, which, in and of itself, is a bit of an embarrassment, but were greeted with an even lower number for February after january came in at a disappointing -5.8. Obviously, there's little to no catalyst for improvement in the region, and the same is pretty much true in other Fed outposts, though the Philadelphia survey gets more attention, it representing a solid hub of business activity.
Beyond the sorry report, other economic data was less-than-encouraging. First-time unemployment claims ticked up 20,000, from a revised 342K last week, to 362K in the latest reporting period, dashing - for the time being - any hope of a rebound in employment.
This is a fickle, almost psychotic market. On the one hand, traders get worried that the Fed will take away the punch bowl of unlimited QE and low interest rates, but, on the other, they are equally concerned that the general economy is again approaching stall speed, as it did last year and in 2011 in the early months.
Whatever the market is feeling these past two days, it is mostly confusion and consternation. The major averages took some serious dips into the red today before a wicked, final-hour, short-covering rally brought them close to unchanged on the day, eventually failing in the final half hour of trading.
One can hardly blame the shorts for pulling a quick trigger on their positions this afternoon. Attempting to short this market and counter the Fed's relentless money creation machine has been a losing trade for the better part of four years and its a testament to the resolve of the non-believers to hold true even on a two-day reversal.
US markets were not the only ones being handed their hats on Thursday. European markets were shattered even worse after a key reading on services and manufacturing fell from 48.6 in January to 47.3 in February, well short of expectations, where the consensus was 49. It may be finally dawning on european investors that various bond schemes by the ECB and austerity measures in various countries aren't producing the desired effects and may even be contributing to continued weakness in the Eurozone.
Taken together, the Eurozone and the US are beginning to look like a pair of gussied-up party girls after a long night on the town. The makeup is fading and cracking and the hangover is setting in with a passion.
Even though two days of trading does not constitute a trend of any sort, the past two have been the worst in succession for US stocks this year and there may not be much of a respite with sequestration issues and a budget battle looming between the opposing parties in the nation's capitol, and those are two fights the American public is hardly keen on, as congress and the president have both shown an unwavering reluctance to handle pressing business like adults, preferring to play the blame game and seek short-term, band-aid types of approaches.
How the markets play out over the next few weeks and months will go a long way toward determining the mood on Wall Street and Main Street, and the mood - despite the best intentions by business - is beginning to show signs that patience is growing exceedingly thin.
Elsewhere, gold got a bit of a dead-cat-bounce after a month of steady declines, giving back those gains during the open session, though silver remains mired at multi-month lows. The metal prices may move even lower, in union with stocks, although one would be hard-pressed to find an actual physical holder of either willing to part with any or all of his or her holdings. Suppression by central banks and other operators has been well-documented, and the more they push down, the more dire conditions for a sharp response become.
Crude oil also has been taken a beating as speculators are having their lunch eaten. Overabundant supplies of WTI crude and slack demand is causing a serious disruption in the trading, which has been nothing but straight up since December. Oil and gas at the pump are about to get a whole lot cheaper.
It's getting a little bit interesting out there after the champagne rally of the first seven weeks of the year. The A-D line has been in reversal for two straight days and today's new highs - new lows reading was nearly at parity, a condition foreign to these markets since last November.
Dow 13,880.62, -46.92 (0.34%)
NASDAQ 3,131.49, -32.92 (1.04%)
S&P 500 1,502.42, -9.53 (0.63%)
NYSE Composite 8,816.74, -66.88 (0.75%)
NASDAQ Volume 2,007,395,000
NYSE Volume 4,414,224,500
Combined NYSE & NASDAQ Advance - Decline: 1942-4569
Combined NYSE & NASDAQ New highs - New lows: 104-78
WTI crude oil: 92.84, -2.38
Gold: 1,578.60, +0.60
Silver: 28.70, +0.077
Thursday, February 21, 2013
Wednesday, February 20, 2013
Fed Minutes Send Shock Waves, Stocks Plummet
Was today the day that the skeptics and shorts have been waiting for the four months? The day the market turned and rolled over, ending ridiculous speculation that the rally had more legs and major indices - S&P, Dow - would reach all-time highs?
Maybe. And to think that it would be the Fed, the very same Federal Reserve that continues relentlessly pumping money at a rate of $85 billion a month into the market, that would cause the turn is simply delicious in its irony.
Stocks were cruising along aimlessly most of the session, down slightly, until last month's Fed minutes were released at 2:00 pm ET. The initial reaction was muted, as most algos were turned off for the event, not being able to peer into the minutes from the FOMC meeting of January 29-30.
The minutes revealed extensive discussion over the current expansionary Fed policy of QE, focused around the purchase of Treasury and mortgage-backed bonds that has been in effect since September of 2012 and whether or not the Fed should continue the policy along the lines of its current stature - until unemployment targets of 6.5% are met - or modify the existing arrangement as market actions warrant.
The committee discussed its options at the January meeting, but voted in favor of keeping the current polify intact, though today's minutes show that fissures in Fed policy are beginning to appear, with not all members completely in line with Chairman Ben Bernanke's policy of unusually easy money.
Once enough wall Street experts were able to read and comprehend what the Fed was transmitting, the selling ensued and at times became quite raucous, especially in the more speculative issues on, mainly on the NASDAQ, which suffered its worst loss of the year.
The Dow lost over 100 points on the day and the S&P pulled back substantially as well. Whether or not the declines will last for more than one session is still up in the air, but what is certain is that officials at the Fed are now openly questioning policy decisions - some insisting that QE is necessary and that the economy is too fragile to change policy, others suggesting that the extraordinary measures are leading to a bubble in equity markets, a view that is beginning to gain traction.
There's little doubt anywhere that if the Fed were to substantially reduce its asset-buying-binge, the economy - and especially the equity markets - would not respond favorably and the economy could be thrust into another round of recession, a reality that is much closer than anyone wishes to believe, after last quarter's -0.1 GDP print.
At this juncture, it would appear that the Fed has tied its own hands, and that any change in policy would be damaging to markets, if not the greater economy. Mere mention of discussion about change caused a selloff, so actual change would no doubt engender more severe reactions.
Dovetailing into the government's do-nothing policy regarding the upcoming sequestration issue, Fed policy should not materially change for the next three to six months, unless the president and congress find a way toward compromise on spending cuts without raising taxes, an outcome seen as remote by most.
How the market responds tomorrow and Friday will set the stage for the final week of February, which is loaded with important economic data releases, not the least of which is the second estimate on fourth quarter GDP on the 28th. Since next Friday is the first of March, the usual non-farm payroll data will be delayed until the 8th, giving the BLS more time to analyze and massage the data.
This may or may not be a significant turn in the markets, but for certain, it's an important development heading into at least three weeks of important data and serious fiscal issues that the government has thus far been reluctant to address.
Collateral damage was done in the precious metals as gold and silver took sizable hits after the Fed minutes release.
Dow 13,927.54, -108.13 (0.77%)
NASDAQ 3,164.41, -49.18 (1.53%)
S&P 500 1,511.95, -18.99 (1.24%)
NYSE Composite 8,883.63, -120.75 (1.34%)
NASDAQ Volume 1,998,613,000
NYSE Volume 4,576,938,000
Combined NYSE & NASDAQ Advance - Decline: 1519-5016
Combined NYSE & NASDAQ New highs - New lows: 470-59
WTI crude oil: 94.46, -2.20
Gold: 1,562.40, -41.80
Silver: 28.51, -0.912
Maybe. And to think that it would be the Fed, the very same Federal Reserve that continues relentlessly pumping money at a rate of $85 billion a month into the market, that would cause the turn is simply delicious in its irony.
Stocks were cruising along aimlessly most of the session, down slightly, until last month's Fed minutes were released at 2:00 pm ET. The initial reaction was muted, as most algos were turned off for the event, not being able to peer into the minutes from the FOMC meeting of January 29-30.
The minutes revealed extensive discussion over the current expansionary Fed policy of QE, focused around the purchase of Treasury and mortgage-backed bonds that has been in effect since September of 2012 and whether or not the Fed should continue the policy along the lines of its current stature - until unemployment targets of 6.5% are met - or modify the existing arrangement as market actions warrant.
The committee discussed its options at the January meeting, but voted in favor of keeping the current polify intact, though today's minutes show that fissures in Fed policy are beginning to appear, with not all members completely in line with Chairman Ben Bernanke's policy of unusually easy money.
Once enough wall Street experts were able to read and comprehend what the Fed was transmitting, the selling ensued and at times became quite raucous, especially in the more speculative issues on, mainly on the NASDAQ, which suffered its worst loss of the year.
The Dow lost over 100 points on the day and the S&P pulled back substantially as well. Whether or not the declines will last for more than one session is still up in the air, but what is certain is that officials at the Fed are now openly questioning policy decisions - some insisting that QE is necessary and that the economy is too fragile to change policy, others suggesting that the extraordinary measures are leading to a bubble in equity markets, a view that is beginning to gain traction.
There's little doubt anywhere that if the Fed were to substantially reduce its asset-buying-binge, the economy - and especially the equity markets - would not respond favorably and the economy could be thrust into another round of recession, a reality that is much closer than anyone wishes to believe, after last quarter's -0.1 GDP print.
At this juncture, it would appear that the Fed has tied its own hands, and that any change in policy would be damaging to markets, if not the greater economy. Mere mention of discussion about change caused a selloff, so actual change would no doubt engender more severe reactions.
Dovetailing into the government's do-nothing policy regarding the upcoming sequestration issue, Fed policy should not materially change for the next three to six months, unless the president and congress find a way toward compromise on spending cuts without raising taxes, an outcome seen as remote by most.
How the market responds tomorrow and Friday will set the stage for the final week of February, which is loaded with important economic data releases, not the least of which is the second estimate on fourth quarter GDP on the 28th. Since next Friday is the first of March, the usual non-farm payroll data will be delayed until the 8th, giving the BLS more time to analyze and massage the data.
This may or may not be a significant turn in the markets, but for certain, it's an important development heading into at least three weeks of important data and serious fiscal issues that the government has thus far been reluctant to address.
Collateral damage was done in the precious metals as gold and silver took sizable hits after the Fed minutes release.
Dow 13,927.54, -108.13 (0.77%)
NASDAQ 3,164.41, -49.18 (1.53%)
S&P 500 1,511.95, -18.99 (1.24%)
NYSE Composite 8,883.63, -120.75 (1.34%)
NASDAQ Volume 1,998,613,000
NYSE Volume 4,576,938,000
Combined NYSE & NASDAQ Advance - Decline: 1519-5016
Combined NYSE & NASDAQ New highs - New lows: 470-59
WTI crude oil: 94.46, -2.20
Gold: 1,562.40, -41.80
Silver: 28.51, -0.912
Tuesday, February 19, 2013
Markets Up Following Three-Day Weekend; Congress Still on Vacation
Nothing like a three-day weekend to release pent-up demand.
Stocks took off like rockets into the sky at the open, leveled off and stayed about the same throughout the session. The S&P closed at a five-year high; the NASDAQ at a 12-year peak. Impressive.
Nobody is taking the issue of sequestration - which will cause some cuts in federal spending, but nothing too severe - seriously. Congress, like school-kids, teachers and administrators, has taken the entire week off.
One care hardly blame the hard-working members of congress for taking a nine-day vacation prior to sequestration to take effect on March 1. After all, they've worked tirelessly at getting re-elected and avoiding making hard choices, like putting together a budget or crafting a jobs bill to solve the unemployment situation.
Congress, like most of Washington, is a near-complete waste of effort. If there's any problem with the US economy, congress will surely attempt to make it worse. In fact, many in the business community will state quite plainly that congress and various levels of government - with its myriad rules, regulations and taxes - is the reason the economy only benefits Wall Street corporations and their shareholders. The rest of us will just have to struggle along, hopefully avoiding the taxes and rules government is so good at marking up and so bad at enforcing.
As for stocks, they're rapidly approaching record highs, which, considering the GDP was -0.1 in the 4th quarter last year and unemployment is "officially" 7.9%, is quite a remarkable feat. Truly, the power of low interest rates and unlimited QE by central banks worldwide, is very robust.
Making money in this environment has been a complete no-brainer. A monkey throwing darts at a stock table could have ramped up 10% gains easily. If the S&P 500 ends the week in positive territory, it will be the eighth straight week of gains, never before accomplished in the history of the index.
There is absolutely no fear in the marketplace, which, in and of itself, is reason to be afraid.
Precious metals - particularly gold and silver - have been on sale for some time and got even cheaper today.
Dow 14,035.67, +53.91 (0.39%)
NASDAQ 3,213.59, +21.56 (0.68%)
S&P 500 1,530.94, +11.15 (0.73%)
NYSE Composite 9,004.40, +71.18 (0.80%)
NASDAQ Volume 1,790,308,875
NYSE Volume 4,003,571,000
Combined NYSE & NASDAQ Advance - Decline: 4400-2121
Combined NYSE & NASDAQ New highs - New lows: 640-39
WTI crude oil: 96.66, +0.80
Gold: 1,604.20, -5.30
Silver: 29.42, -0.427
In the video below, Senator Elizabeth Warren asks officials of various "supervisory" agencies the last time they took a big Wall Street bank to trial. The answers are, in a word, predictable.
Stocks took off like rockets into the sky at the open, leveled off and stayed about the same throughout the session. The S&P closed at a five-year high; the NASDAQ at a 12-year peak. Impressive.
Nobody is taking the issue of sequestration - which will cause some cuts in federal spending, but nothing too severe - seriously. Congress, like school-kids, teachers and administrators, has taken the entire week off.
One care hardly blame the hard-working members of congress for taking a nine-day vacation prior to sequestration to take effect on March 1. After all, they've worked tirelessly at getting re-elected and avoiding making hard choices, like putting together a budget or crafting a jobs bill to solve the unemployment situation.
Congress, like most of Washington, is a near-complete waste of effort. If there's any problem with the US economy, congress will surely attempt to make it worse. In fact, many in the business community will state quite plainly that congress and various levels of government - with its myriad rules, regulations and taxes - is the reason the economy only benefits Wall Street corporations and their shareholders. The rest of us will just have to struggle along, hopefully avoiding the taxes and rules government is so good at marking up and so bad at enforcing.
As for stocks, they're rapidly approaching record highs, which, considering the GDP was -0.1 in the 4th quarter last year and unemployment is "officially" 7.9%, is quite a remarkable feat. Truly, the power of low interest rates and unlimited QE by central banks worldwide, is very robust.
Making money in this environment has been a complete no-brainer. A monkey throwing darts at a stock table could have ramped up 10% gains easily. If the S&P 500 ends the week in positive territory, it will be the eighth straight week of gains, never before accomplished in the history of the index.
There is absolutely no fear in the marketplace, which, in and of itself, is reason to be afraid.
Precious metals - particularly gold and silver - have been on sale for some time and got even cheaper today.
Dow 14,035.67, +53.91 (0.39%)
NASDAQ 3,213.59, +21.56 (0.68%)
S&P 500 1,530.94, +11.15 (0.73%)
NYSE Composite 9,004.40, +71.18 (0.80%)
NASDAQ Volume 1,790,308,875
NYSE Volume 4,003,571,000
Combined NYSE & NASDAQ Advance - Decline: 4400-2121
Combined NYSE & NASDAQ New highs - New lows: 640-39
WTI crude oil: 96.66, +0.80
Gold: 1,604.20, -5.30
Silver: 29.42, -0.427
In the video below, Senator Elizabeth Warren asks officials of various "supervisory" agencies the last time they took a big Wall Street bank to trial. The answers are, in a word, predictable.
Friday, February 15, 2013
DEAD MARKET: Stock Indices Finish Week Nearly Unchanged
As has been repeated here and on other financial sites ad nauseum, this is about as dull a market as has ever been seen.
Even though the Dow Industrials finished positive on the day, it spent most of Friday's session in negative territory, down by as many as 61 points just 90 minutes prior to the close. It actually turned positive just two minutes before the closing bell.
The NASDAQ suffered its first losing week of the year, a laughable 1.84 point decline. The Dow fell - on a weekly basis - for the second straight week, a whopping 11-point loss on top of last week's monumental 17 point decline. A cumulative loss of 28 points in two weeks (10 trading days) is nothing more than a rounding error.
As for the darling S&P, it continued its 2013 winning streak, closing up again for the seventh straight week, though only by a mere 1.86 points. They dynamic S&P 500 went the entire week without moving more than three points on a closing basis. That's dull with a capital D.
With all this excitement, thank goodness the exchanges are closed on Monday for President's Day. The traders and all us weary writers really need a break.
Whew!
Late Breaking: The SEC has filed charges in unusual trading activity in options just prior to Berkshire Hathaway's takeover of H.J. Heinz (HNZ). Geez, Uncle Warren involved in something less than ethical? The horror. The ironic twist is that Business Insider, operated by banned trader/analyst Henry Blodget, was the first on the web with the story, proving that, even on Wall Street, truth is stranger than fiction.
Dow 13,981.76, +8.37 (0.06%)
NASDAQ 3,192.03, -6.63 (0.21%)
S&P 500 1,519.79, -1.59 (0.10%)
NYSE Compos... 8,932.17, -20.91 (0.23%)
NASDAQ Volume 1,831,044,125
NYSE Volume 4,096,131,750
Combined NYSE & NASDAQ Advance - Decline: 2977-3410
Combined NYSE & NASDAQ New highs - New lows: 489-45
WTI crude oil: 95.86, -1.45
Gold: 1,609.50, -26.00
Silver: 29.85, -0.504
Even though the Dow Industrials finished positive on the day, it spent most of Friday's session in negative territory, down by as many as 61 points just 90 minutes prior to the close. It actually turned positive just two minutes before the closing bell.
The NASDAQ suffered its first losing week of the year, a laughable 1.84 point decline. The Dow fell - on a weekly basis - for the second straight week, a whopping 11-point loss on top of last week's monumental 17 point decline. A cumulative loss of 28 points in two weeks (10 trading days) is nothing more than a rounding error.
As for the darling S&P, it continued its 2013 winning streak, closing up again for the seventh straight week, though only by a mere 1.86 points. They dynamic S&P 500 went the entire week without moving more than three points on a closing basis. That's dull with a capital D.
With all this excitement, thank goodness the exchanges are closed on Monday for President's Day. The traders and all us weary writers really need a break.
Whew!
Late Breaking: The SEC has filed charges in unusual trading activity in options just prior to Berkshire Hathaway's takeover of H.J. Heinz (HNZ). Geez, Uncle Warren involved in something less than ethical? The horror. The ironic twist is that Business Insider, operated by banned trader/analyst Henry Blodget, was the first on the web with the story, proving that, even on Wall Street, truth is stranger than fiction.
Dow 13,981.76, +8.37 (0.06%)
NASDAQ 3,192.03, -6.63 (0.21%)
S&P 500 1,519.79, -1.59 (0.10%)
NYSE Compos... 8,932.17, -20.91 (0.23%)
NASDAQ Volume 1,831,044,125
NYSE Volume 4,096,131,750
Combined NYSE & NASDAQ Advance - Decline: 2977-3410
Combined NYSE & NASDAQ New highs - New lows: 489-45
WTI crude oil: 95.86, -1.45
Gold: 1,609.50, -26.00
Silver: 29.85, -0.504
Thursday, February 14, 2013
St. Valentine's Day Mascara
No, that's not a misprint in the headline. The word is "mascara" - the stuff women apply to darken, thicken, lengthen, and/or define their eyelashes. It's a cosmetic, as in rouge, or lipstick, as in lipstick on a pig, which is exactly what the algos and buy-siders did to today's undeniably weak, directionless market.
Face it, Europe is a bona-fide basket case, Japan is devaluing its currency so fast that George Soros made nearly a billion dollars on the trade in just over three months.
The news coming out of Euro-fantasy-land was less than encouraging. Eurozone fourth quarter 2012 GDP fell by 0.6%.
Making matters a little more interesting - and more frightening - were the figures for the zone's three largest economies - Germany, France and Italy - whose own GDP fell by 0.6%, 0.3% and 0.9%, respectively.
The Eurozone, even after all the bank and sovereign bailouts, pledges of doing everything possible to promote growth by the likes of Germany's Angela Merkel and EU President Mario Draghi, has resulted in three consecutive quarters of negative GDP. Europe is already in the throes of an economic collapse, thanks largely to protectionism for banks and excessive liquidity from European central bankers (most of whom are Goldman Sachs alum, BTW).
While the GDP numbers may be bad enough, consider youth unemployment (ages 15-25) in the Eurozone to be spreading like the bubonic plague. Greece reported youth unemployment over 60%; Spain over 50% and Portugal just topped 40%. Thirteen of the 27 EU member states are reporting youth unemployment over 25%. Austerity: it's what's for dinner.
Europe is solid proof that the elite class is making up the rules as they go along, and the general public is viewed as collateral damage only. Here in the good old USA, we have our own concerns with the sequestration schedule to commence March 1, which will result in massive federal budget cuts. The president and congress haven't even begun to discuss how they'll handle that, though they uniformly say that sequestration (it doesn't rhyme with castration for no reason) is something they'd prefer to avoid.
Have they acted? No. Will they? Probably, but, like the fiscal cliff deal this past December, it will be a stop-gap measure and cost taxpayers more. Nobody ever cuts anything in Washington, only the rate of growth of programs, because what's important to them is keeping lobbyists and voters (government employees and beneficiaries of government largesse) dumb and happy.
So, on what does this algo-concocted market focus? Berkshire Hathaway's buyout of Heinz. Poor suckers that Americans are, they put ketchup on their chicken and pork hot dogs on day old buns while Uncle Warren reaps the profits. If ever there was a crony capitalist, Warren Buffet's picture belongs next to the definition.
Sure, unemployment claims were down - from 368K to 341K - but aren't those figures still too high? The new normal means just doing better than expectations, even if those expectations are sub-par. It's akin to taking your kid out for ice cream because he got a C in math instead of a D. As a nation, we've lowered our standards in everything from our political leaders to what passes for entertainment.
Along with everything else, we've lowered our standards for rational markets. Today's split decision is just another shining example of the truth hiding in plain sight. Sooner or later, even the talking heads on CNBC are going to come to the realization that making new all-time highs with a -0.1% GDP and unemployment at eight percent doesn't really pass the smell test. Someday. Maybe. Note the video below with Rick Santelli, everyone's favorite financial ranter, extrapolating out on what we've been saying nearly every day on this blog: that being a trader is nearly impossible under current conditions.
And, just as a side note, New York Mayor Bloomberg, who first banned drink containers larger than 16 ounces, has proposed a ban on styrofoam containers, and... it's likely to pass his rubber stamp city council.
Let's see, smokes are $10-12 a pack in NY, you can't smoke in any of the bars, night clubs or public buildings; you must drink from small containers and those soon cannot be made of styrofoam. All this makes one pine for the good old days of the seventies. Ed Koch was mayor. Son of Sam was shooting kids in parking lots. Reggie Jackson was blasting balls out of the original Yankee Stadium and you could buy just about any kind of drug - from weed to cocaine - on just about any street corner. Bloomberg. He's just not a fun guy.
Dow 13,973.39, -9.52 (0.07%)
NASDAQ 3,198.66, +1.78 (0.06%)
S&P 500 1,521.38, +1.05 (0.07%)
NYSE Composite 8,951.33, -4.27 (0.05%)
NASDAQ Volume 1,884,832,750
NYSE Volume 3,867,864,500
Combined NYSE & NASDAQ Advance - Decline: 3259-3130
Combined NYSE & NASDAQ New highs - New lows: 505-39
WTI crude oil: 97.31, +0.30
Gold: 1,635.50, -9.60
Silver: 30.35, -0.516
Face it, Europe is a bona-fide basket case, Japan is devaluing its currency so fast that George Soros made nearly a billion dollars on the trade in just over three months.
The news coming out of Euro-fantasy-land was less than encouraging. Eurozone fourth quarter 2012 GDP fell by 0.6%.
Making matters a little more interesting - and more frightening - were the figures for the zone's three largest economies - Germany, France and Italy - whose own GDP fell by 0.6%, 0.3% and 0.9%, respectively.
The Eurozone, even after all the bank and sovereign bailouts, pledges of doing everything possible to promote growth by the likes of Germany's Angela Merkel and EU President Mario Draghi, has resulted in three consecutive quarters of negative GDP. Europe is already in the throes of an economic collapse, thanks largely to protectionism for banks and excessive liquidity from European central bankers (most of whom are Goldman Sachs alum, BTW).
While the GDP numbers may be bad enough, consider youth unemployment (ages 15-25) in the Eurozone to be spreading like the bubonic plague. Greece reported youth unemployment over 60%; Spain over 50% and Portugal just topped 40%. Thirteen of the 27 EU member states are reporting youth unemployment over 25%. Austerity: it's what's for dinner.
Europe is solid proof that the elite class is making up the rules as they go along, and the general public is viewed as collateral damage only. Here in the good old USA, we have our own concerns with the sequestration schedule to commence March 1, which will result in massive federal budget cuts. The president and congress haven't even begun to discuss how they'll handle that, though they uniformly say that sequestration (it doesn't rhyme with castration for no reason) is something they'd prefer to avoid.
Have they acted? No. Will they? Probably, but, like the fiscal cliff deal this past December, it will be a stop-gap measure and cost taxpayers more. Nobody ever cuts anything in Washington, only the rate of growth of programs, because what's important to them is keeping lobbyists and voters (government employees and beneficiaries of government largesse) dumb and happy.
So, on what does this algo-concocted market focus? Berkshire Hathaway's buyout of Heinz. Poor suckers that Americans are, they put ketchup on their chicken and pork hot dogs on day old buns while Uncle Warren reaps the profits. If ever there was a crony capitalist, Warren Buffet's picture belongs next to the definition.
Sure, unemployment claims were down - from 368K to 341K - but aren't those figures still too high? The new normal means just doing better than expectations, even if those expectations are sub-par. It's akin to taking your kid out for ice cream because he got a C in math instead of a D. As a nation, we've lowered our standards in everything from our political leaders to what passes for entertainment.
Along with everything else, we've lowered our standards for rational markets. Today's split decision is just another shining example of the truth hiding in plain sight. Sooner or later, even the talking heads on CNBC are going to come to the realization that making new all-time highs with a -0.1% GDP and unemployment at eight percent doesn't really pass the smell test. Someday. Maybe. Note the video below with Rick Santelli, everyone's favorite financial ranter, extrapolating out on what we've been saying nearly every day on this blog: that being a trader is nearly impossible under current conditions.
And, just as a side note, New York Mayor Bloomberg, who first banned drink containers larger than 16 ounces, has proposed a ban on styrofoam containers, and... it's likely to pass his rubber stamp city council.
Let's see, smokes are $10-12 a pack in NY, you can't smoke in any of the bars, night clubs or public buildings; you must drink from small containers and those soon cannot be made of styrofoam. All this makes one pine for the good old days of the seventies. Ed Koch was mayor. Son of Sam was shooting kids in parking lots. Reggie Jackson was blasting balls out of the original Yankee Stadium and you could buy just about any kind of drug - from weed to cocaine - on just about any street corner. Bloomberg. He's just not a fun guy.
Dow 13,973.39, -9.52 (0.07%)
NASDAQ 3,198.66, +1.78 (0.06%)
S&P 500 1,521.38, +1.05 (0.07%)
NYSE Composite 8,951.33, -4.27 (0.05%)
NASDAQ Volume 1,884,832,750
NYSE Volume 3,867,864,500
Combined NYSE & NASDAQ Advance - Decline: 3259-3130
Combined NYSE & NASDAQ New highs - New lows: 505-39
WTI crude oil: 97.31, +0.30
Gold: 1,635.50, -9.60
Silver: 30.35, -0.516
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