March Madness Redefined: Cyprus, the ECB and the IMF

March - in the United States, at least - is traditionally known for the great sporting event of the year, the annual NCAA Men's Basketball Tournament, otherwise known as March Madness, because of the wild nature of the proceedings, the drama, last-second, game-winning shots (Buzzer Beaters) and the twists and turns taken en route to crowing a national champion.

Over the weekend, unbeknownst to college basketball fans and most regular American citizens, a new manner of March madness was created by the European Central Bank, the IMF and the nation of Cyprus. The reason nobody in America knew about what has been occurring on and around the tiny Mediterranean island is the usual: the US press is terminally asleep at the media wheel.

Re-capping the key events in this twisted tableau, the entire mess began years ago, as banks (the usual culprits) in Cyprus found themselves woefully underfunded and the government virtually bankrupt. Leave it at that, as yet another European nation finds itself with an unbearable debt burden and no reasonable way out.

The EU and the ECB have been grappling with the Cyprus situation for at least the last two years, doing little to nothing about it, their energies directed more at larger peripheral nations like Greece (a complete disaster), Spain (gaining fast on Greece), Ireland (terminally indebted), Portugal and Italy. These PIIGS, as they are lovingly called, have social and financial issues that needed more immediate attention and have been given directives, bailouts, loans and assorted "fixes" from the EU and the IMF, facilitating debt repurchases, funding ongoing governmental operations and generally kicking the proverbial can further down the road to the eventual collapse of the Euro.

Finally getting around to Cyprus this weekend, the EU and IMF decided that they would bail out the nation's banks to the tune of 10 billion Euros, a pittance comparatively, though the number fell short of what is really needed, which is more in the range of 16 to 17 billion Euros. even with that amount, tiny Cyprus would still have a debt-to-GDP ratio of about 180%. Shameful.

The kicker was that the proposed six-to-seven billion euros was to be funded from bank deposits.

STOP. Read that again. Yes, the EU and IMF told the Cypriot parliament to vote on a measure that would impair (tax) bank deposits at anywhere from six to 9.99%, the lower figure reserved for bank deposits below 100,000 Euros, the higher one applied to holdings over that figure. These are deposits of PEOPLE, companies, married couples, retirees which the leaders and brian-trust of the ECB thought reasonable to raid, to tax, to steal.

Never mind that bank deposits in all of Europe are guaranteed by the ECB up to 100,000 Euros, the six percent "tax" would be taken directly from bank accounts should parliament approve the proposal.

This, in the parlance of sports and March Madness, is what's known as a game changer. According to this banker proposal, your money, which you saved and deposited in a bank you thought was safe - and insured - could just simply be taxed away by authorities of some supra-national organization upon approval of your own parliament. Forget the rule of law, Forget property rights. Forget everything you ever thought about civilization, money, government and society. If there's a chance that your bank or your nation may not be able to make payments on debt, YOU PAY.

Curiously, this whole affair began on Friday night, after all the banks were closed for the weekend, and preceding a bank holiday in Cyprus on Monday. Since that time, all manner of posing, posturing, name-calling, demonstrations and other assorted madness has taken place, by EU finance ministers, various heads of state, the Cypriot parliament, the people of Cyprus and others, including just about every talking head on the financial news networks.

Currently, the parliament - having delayed the vote twice already - has announced to the one million residents of Cyprus that banks would be closed until Thursday. The joke of the day on that note was "which Thursday?"

So, bottom line is that the situation is still fluid, there's plenty of time for EU idiots and IMF monsters to make more absurd statements and demands, but, until something gets resolved, banks are closed, ATMs are out of cash and Cyprus will gradually devolve into something... not sure exactly what.

For more information on what may be the story of the year, the best single source is, as usual, ZeroHedge.com, which has been running numerous articles since the story broke. For more information, try this Bing News link, the Washington Post story, another by CBS News and one from the Christian Science Monitor.

No other story mattered at all today, and it's likely that no other story will matter for the remainder of the week, because, if governments or pseudo-authorities like the ECB and IMF can force their will upon a sovereign government to the extent that it violates its own laws by confiscating, stealing, expropriating the funds of its own citizens, we have truly entered a new world order, one that is owned by bankers and their appointed lackeys in high government positions.

For the record, nearly all markets were down, globally, Asian markets taking the news most seriously and the worst affected, followed by European markets and then, the US, which downplayed the event after utures had tanked prior to the opening bell and actually found a way to briefly trade in positive territory (Dow and S&P) during the afternoon.

On the Dow, support was breached early in the session and again at the close. If you're looking for a bottomless pit, the Dow is now it, though Europe and all of its exchanges will race it to the bottom unless something changes radically over the coming few days. If people cannot trust the banks to hold their money, it's the beginning of the end for the decrepit, lawless global banking cartel we've all come to know and loathe.

Dow 14,452.06, -62.05 (0.43%)
NASDAQ 3,237.59, -11.48 (0.35%)
S&P 500 1,552.10, -8.60 (0.55%)
NYSE Composite 9,045.44, -71.24 (0.78%)
NASDAQ Volume 1,547,766,750
NYSE Volume 3,522,718,500
Combined NYSE & NASDAQ Advance - Decline: 2352-4125
Combined NYSE & NASDAQ New highs - New lows: 271-34
WTI crude oil:
Gold:
Silver:

Ides of March Kills Dow Streak; S&P Still Short of Record

2057 years ago (44 BC, to be exact), Julius Caesar was murdered by a knife in the back from a supposed ally - Brutus - who was acting at the behest of other members of the Roman Senate.

While today's failure of the Dow Jones Industrial average to make it eleven days in a row of gains fails by comparison in an historical context, the Ides of March (March 15) struck again, this time - unlike in caesar's final days - without warning.

The final tally for stocks was not so - pardon the pun - brutish as a knife in the back; today's silly downfall more resembled a paper cut, but, the rally has paused on what was one of the busier days Wall Street has seen in some time.

Combining a quadruple options witching day with a rebalancing of indices, volume was significantly pumped up beyond the normal dullness that has persevered over the past, what, four years?.

In any case, the selling pressure was enough to take stocks down in the early part of the session, only to see all the major indices rally to cut the extent of the losses by roughly two-thirds.

The key numbers to watch going into next week are 1565 on the S&P, which is the all-time closing high, set in October, 2007, a number in and of itself which was largely the result of excessive risk-taking and a monstrous credit bubble which has reappeared over the past 18 months.

On the Dow, the number would be 14,470.50, today's intraday low, a significant enough digit to mark the first line of support should the rally fail to metastasize next week.

The other streaks which came to an end today, beyond the Dow's 10-straight positive closes, were the string of Fridays in which the Dow closed positively and the all-up closes for the month of March. Today was the first day of March in which the Dow finished without a gain and also was the first Friday of 2013 to see a negative finish.

Not that today's smallish decline was anything for anybody to get excited about - it wasn't - but the end of a ten-day string of gains was monumental, being only the eighth time the Dow had ever strung together psotive closes in ten or more consecutive sessions.

With options expiry out of the way for the month (regardless of the weekly options now in vogue), there exists some probability that the markets could turn down in the near term, though analysts are still split on that particular notion.

All that can be said for now is that March - which in market terms came in like a lion - got a little of the lamb treatment today, stabbed and readied for roasting.

Dow 14,514.11, -25.03 (0.17%)
NASDAQ 3,249.07, -9.86 (0.30%)
S&P 500 1,560.70, -2.53 (0.16%)
NYSE Composite 9,116.50, -11.47 (0.13%)
NASDAQ Volume 2,156,822,000
NYSE Volume 5,242,731,500
Combined NYSE & NASDAQ Advance - Decline: 2970-3455
Combined NYSE & NASDAQ New highs - New lows: 527-46
WTI crude oil: 93.45, +0.42
Gold: 1,592.60, +1.90
Silver: 28.85, +0.044

Blue Chips Finish Ahead for 10th Straight Session

While the Dow is pitching a pure bull shutout in March - 10 sessions, 10 positive closes - the S&P 500 is within two points of its all-time closing high.

Commentators on the talking heads financial networks (Rick Santelli excluded) have obviously taken enormous gulps from the Fed's Kool-Aid pitcher, because they are all talking like this is absolutely normal and has nothing at all to do with the piles of free money passed around over the preceding four years and currently being handed out at a rate of $85 billion per month.

Best advice is to enjoy it while you can if you're an individual investor (an endangered species), and hope for the best if your funds are locked up in a 401K, annuity, pension or other financial instrument with withdrawal restrictions.

10-day runs are most uncommon. In the history of the Dow Industrials, only eight have occurred, the most recent of which was in 1996.

Dow 14,539.14, +83.86 (0.58%)
NASDAQ 3,258.93, +13.81 (0.43%)
S&P 500 1,563.23, +8.71 (0.56%)
NYSE Composite 9,127.96, +70.94(0.78%)
NASDAQ Volume 1,652,658,750
NYSE Volume 3,702,488,750
Combined NYSE & NASDAQ Advance - Decline: 4350-2072
Combined NYSE & NASDAQ New highs - New lows: 614-33 (Fabulous!)
WTI crude oil: 93.03, +0.51
Gold: 1,590.70, +2.30
Silver: 28.81, -0.151

Dow Gains 9th Straight Day to Another Record High

For the first time since November, 1996, the Dow Jones Industrial Average has risen for nine sessions in a row, the last seven of which made new record closing highs.

Not that it matters at all to ordinary investors (whatever that term means today), but the referenced date was during one of the market's greatest bull runs of all time and just prior to the famous "irrational exuberance" speech then-chairman Alan Greenspan gave just a month later, warning that the markets were overheating.

The chances of current chairman Ben Bernanke saying something similar are essentially nil. There's a better chance that Mr. Bernanke would fan, rather than cool, the flames of capitalism in coming months. It's simply not in the cards for the Fed to change course any time soon.

Today's gains were slim, with a range and volume that were slimmer by comparison. The Dow traded in a 50-point span from top to bottom, and volume, which has been non-existent throughout the current rally, was decidedly dull.

For all the talk of recovery and new highs, this leg of the rally has been noticeably dull and unappreciated.

But, that's where we are, QE, ZIRP and all the jolly talk aside.

The main catalyst for today's gains was a surprising jump in consumer spending for February, up 1.1%, far ahead of projections and the best reading in five months.

But, judging by the tepid response, this rally seems to be nearly out of gas. Not to worry, however, as any setback in stocks will almost immediately be washed away by some new rally, likely due to massive injections of liquidity by the Federal Reserve.

While the current prices of stocks and levels of the major indices may be irrational, there's little exuberance to be found anywhere.

Dow 14,455.28, +5.22 (0.04%)
NASDAQ 3,245.12, +2.80 (0.09%)
S&P 500 1,554.52, +2.04 (0.13%)
NYSE Composite 9,057.00, +2.96 (0.03%)
NASDAQ Volume 1,552,400,375
NYSE Volume 3,327,864,500
Combined NYSE & NASDAQ Advance - Decline: 3538-2872
Combined NYSE & NASDAQ New highs - New lows: 386-31
WTI crude oil: 92.52, -0.02
Gold: 1,588.40, -3.30
Silver: 28.96, -0.213

Epic Fail: Marissa Mayer, Ron Johnson, Tim Cook and the Cult of Mediocrity

Since writing about the stock market is so damn boring these days - yeah, the Dow closed at another record high today, marginally so, though the S&P and NASDAQ couldn't quite keep up - let's take a look at some of the people who think they are shaping our collective futures.

I'm (yes, shifting to first person singular for a change) speaking here about the wannabe executives who have been boosted by people bigger than themselves - one, in particular, Steve Jobs, was actually bigger than life - and we have a triumvirate of massive failures, waiting to happen, astride some of the biggest corporate structures in America.

Marissa Mayer, the recently-installed CEO of Yahoo! (YHOO), has been catching the most attention of late, first, for her dictum that Yahoo! home-workers must begin to come into the office, and just today, on word that the redoubtable Ms. Mayer is now personally reviewing every potential new hire at the Silicon Valley firm she heads.

What a nice way to tell the HR department to F-- off! Seriously, Yahoo! employs something like 11,000 people, so, can one expect Marissa to personally interview every new employee? There's a solution to this little time-consumption mess she's created for herself, and it's called a hiring freeze. Expect one soon.

On the same matter, Ms. Mayer, is said to be leaning more towards employees who've earned degrees from prestigious universities, rather than on merit (an old-fashioned idea that people who've actually accomplished something are valuable), in order to create the correct "culture."

There's something a little disturbing about Ms. Mayer's approach to business and culture, in a way that's kind of creepy. While she told all the home-workers to make tracks back to the office or leave the employ of Yahoo!, she herself had a nursery installed near her office, so she could keep an eye on her newborn son, a benefit the former home-working-mothers do not enjoy.

Two words for Ms. Mayer: elitist. bitch.

Mayer's main claims to fame include graduating from Stanford and being the 20th employee hired by Google founders, Sergey Brin and Larry Page. Nice placement. Yahoo! stock has risen about 40% since Mayer took over as CEO, but there's little evidence to suggest Mayer has had any positive impact on the company. The site has had some redesign lately, though nothing radically different, and it still suffers from poor infrastructure and an assortment of glitches.

If Yahoo! disappeared from the internet tomorrow, it would not be missed. There are plenty of other websites which do what Yahoo! does, yet better, though, admittedly, with less organization. The internet would surely survive without Yahoo! and there would be a great talent pool of unemployed brainy types seeking more challenging employment in the valley.

Let's talk next about Tim Cook, the immediate successor to the late Steve Jobs, founder of Apple (AAPL), which, at the time of his death, was considered the greatest corporation operating in the world. Just before his death in October, 2011, Jobs, knowing he had only a few months left to live, handed over the reins to his corporate empire to Tim Cook.

Jobs, never to be mistaken as a person with great people skills, groomed Cook in his own ways, though he could certainly have not imparted his genius for inventiveness and style, nor his uncanny business acumen. For the first year under Cook, the stock soared, likely on the impetus that Jobs had left in his wake. A year out, however, Apple stock began to nosedive, and continues to falter. Apple hasn't had any new devices since the iPad Mini, and they're losing share in the smart phone wars to Samsung and other competitors.

Cook, like Mayer, happened to be in the right place at the right time, will surely be well compensated for failure, and will lead Apple back to the depths of despair the company suffered when Jobs was kicked out and replaced by John Skully. The innovation and no-nonsense management style of Jobs is long gone. Other consumer electronics firms are running circles around the once-innovative Apple.

While this is not entirely Cook's fault - one cannot be blamed just for being numb and uninspired - he'll be along for the ride... and the fall.

Third in our review of 21st century anti-heroes is another Apple wunderkind, Ron Johnson, who took over JC Penny (JCP) after being hailed as the grand designer of Apple's wonderfully-simple, yet practical stores.

Again, Johnson's story is more myth than meat. While he was head of the retail division, he also had Jobs inspecting and critically appraising every aspect of his work and also had Mickey Drexler as an advisor. Drexler, formerly of the Gap, Inc. and famously, the inventor of J. Crew, is widely and rightfully regarded as a retail genius.

In November, 2011, Johnson got the job as CEO of JCP off his glowing resume and plenty of hype. Wall Street types were peeing themselves over the thought of a person so gloriously-self-proclaimed-as-revolutionary taking over the reins at the failing mass merchandiser. Initially, the stock got a huge bump, trading as high as 43/share on the promise that Johnson would turn the company around.

The results have been nothing short of horrifying, mostly to holders of JCP stock. The hoped-for turnaround has produced nothing but a string of quarterly losses that have brought the share price down to $15, slicing it by nearly two-thirds from the heady, halcyon days of Johnson's visionary resurrection.

To his credit, Johnson has taken some responsibility, expressing in the most recent quarterly conference call that some of his strategy has not worked out very well. The company is teetering on the brink of bankruptcy, and, if it goes under, will not be missed. Like Yahoo!, there are plenty of competitors in the retail space.

It's a symptom of our misdirected times that Wall Street failures are initially hailed as heroes. They've done little to achieve their notoriety, and, arguably, are learning on the job. They are not genii in their own rights and never will be, only people who are bright followers and poor leaders. It's not their fault that they're doomed to failure, though it is sometimes fun to watch them squirm under the bright glare of public scrutiny.

If only there were a mechanism like the stock market for politicians... but, I'm entering dream-land now.

The moral of this story is that genius cannot be replaced and those chosen to walk in the footpaths of such will be handsomely paid and praised, but that garden path soon becomes adorned mostly with thorns.

The failures these people will beset upon themselves and those around them figure to be of epic proportions, and, in the case of JC Penny and Apple, already have reached what some would consider crisis stage. Companies come and go, but the stupidity of seeking out role models from the rich and connected seems a character flaw that never gets old.

...so, to close out today's chapter of "as the world yearns," this cute little song off the Beatle's Rubber Soul album came to mind. It's relevant on many different levels; recalling so many of the people I used to know but now realize that they too were mere phantoms, apparitions and shadows. This video comes complete with the lyrics, so listen along, read and learn...



Dow 14,450.06, +2.77 (0.02%)
NASDAQ 3,242.32, -10.55 (0.32%)
S&P 500 1,552.48, -3.74 (0.24%)
NYSE Composite 9,059.96, -22.27 (0.25%)
NASDAQ Volume 1,672,772,125
NYSE Volume 3,482,609,250
Combined NYSE & NASDAQ Advance - Decline: 2661-3765
Combined NYSE & NASDAQ New highs - New lows: 387-29
WTI crude oil: 92.54, +0.48
Gold: 1,591.70, +13.70
Silver: 29.17, +0.318