There was no place to hide for investors of any stripe on the day after the Fed's dramatic announcement on Wednesday that it planned to reduce asset purchases later this year.
Stocks, bonds, and commodities were all priced lower, reflecting the possible reality that the world's economy would not be propped up indefinitely by the Federal reserve's money-printing schemes of quantitative easing (QE) and zero percent interest rate policy (ZIRP).
Following Wednesday afternoon's sharp selloff, Thursday quickly turned into a blood bath, with all of the major averages breaking through support at 50-day moving averages and precious metals dropping to levels not seen in roughly three years.
Godl was down nearly $100/ounce at 4:00 pm EDT, with traffic shifting from the Comex and Globex to Asian markets which are sure to feel the after-effects of the West's massive breakdown.
Despite the huge moves in equities, the major indices are still only down less than five percent from all-time closing highs made late in May, but the abruptness of the moves in all markets was an unexpected shock to portfolios everywhere.
The 10-year note hit a three-year high yield, but pulled back slightly to end the day at 2.39. The five-year also closed at multi-year highs of 1.26% and the 30-year bond finished at 3.48%, 33 basis points higher than a month ago.
Fallout from today's moves in the markets will be far-reaching and should be considered the beginning of a new paradigm, one in which interest rates will continue to rise as (and if) the economy continues to improve, a scenario not fully bought into by everyone. While housing has shown strength in recent months, higher interest rates can only slow the growth potential as home-buyers will be able to afford less for their money or may delay purchases altogether.
Gold and silver were especially hard hit, with gold finishing below the $1300 level and silver under $20 per ounce.
With no real economic data of note and earnings still two to three weeks away, the markets will have to find some kind of stabilizing catalyst in the final week of June or heading into the Independence Day holiday the first week of July, investors will find themselves truly independent... of profits, assets and good trading ideas.
Everybody knew this day of reckoning was coming, though few thought it would be so soon and appear with such ferocity. Trading volume was at the highest level of the year, significant in that tomorrow's quarterly options expirations may have been closed out earlier than most had planned, rendering tomorrow's triple-or-quadruple-witching day moot.
Advancing issues were dwarfed by decliners, which outpaced them 9-to-1. New lows exceeded new highs, 436-59.
The losses on major indices were the worst since November 7, 2012, the day after the re-election of Barack Obama. It's not just coincidence that stocks would take their biggest tumbles on the day after electing the worst president in American history (he's easily outdone GW Bush, already) and the day following the tactical blundering of the Chairman of the Federal Reserve. We are a nation of sheep led by abject morons.
Dow 14,758.32, -353.87 (2.34%)
NASDAQ 3,364.64, -78.57 (2.28%)
S&P 500 1,588.19, -40.74 (2.50%)
NYSE Composite 8,996.35, -259.36 (2.80%)
NASDAQ Volume 1,961,153,875
NYSE Volume 5,276,584,500
Combined NYSE & NASDAQ Advance - Decline: 685-5966
Combined NYSE & NASDAQ New highs - New lows: 59-436
WTI crude oil: 94.94, -3.30
Gold: 1,278.00, -96.00
Silver: 19.56, -2.063
Thursday, June 20, 2013
Wednesday, June 19, 2013
Fed Clarifies Position on Bond Purchases; Markets Hate It
The widely-anticipated June FOMC meeting was worth the wait, as Fed Chairman Ben Bernanke and his merry bank of economic soothsayers proved once and for all that they haven't got a clue what they're doing and that the market controls their actions, not the other way around.
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Key take-aways from the policy decision (unchanged) and Bernanke's press conference were that the Fed saw downside risks to the economy "diminished," and that asset purchases - given improved economic conditions (pipe dream) - the Fed would begin to unwind, or, taper, those purchases from the current monthly level of $85 billion a month by the end of this year and end them completely by the middle of 2014.
This, of course, will never happen, as economic conditions are not improving, and, even if they are, are not improving quickly enough to warrant removal of the Fed's substantial monetary stimulus.
Market reaction was a bit slow to coalesce, but when it finally got the drift of what Bernanke was saying, sold off hard, with both stocks and bonds going into the tank. The Dow suffered one of its worst days of the year, off more than 200 points, while bond yields rose to 14-month highs on the ten-year note, at 2.33% and two-year highs on the five (1.26%).
What Bernanke didn't say was almost as intriguing as what he did, refusing to comment on why he is not going to attend the annual summit at Jackson Hole, sponsored by the Kansas City Fed, or whether or not he had plans to retire when his term expires early next year, though it appears, especially after President Obama's off-the-cuff remarks to Charlie Rose two nights ago, that the Chairman's tenure is at an end.
Bernanke did make one other clarification of note, that the Fed would hold its mortgage-backed securities to maturity, rather than sell them into the secondary market. Again, what he didn't say may be notable, as the decision to hold to maturity may be predicated on these securities (some of which are toxic to some degree or another) may not have the value at which the Fed is holding, or, since the Fed is pretty much 60% or more of the entire MBS market, maybe there is no secondary market of value.
Overall, it was a constructive session on the markets, but one which, unfortunately for bulls, appears to be in furtherance of the downward trend in equities.
With today's selloff, the bias has returned to the sell side and it seems as if the smart money is getting out while the getting is good.
Dow 15,112.19, -206.04 (1.35%)
NASDAQ 3,443.20, -38.98 (1.12%)
S&P 500 1,628.93, -22.88 (1.39%)
NYSE Composite 9,255.71, -143.93 (1.53%)
NASDAQ Volume 1,698,203,375
NYSE Volume 4,021,718,750
Combined NYSE & NASDAQ Advance - Decline: 1357-5161
Combined NYSE & NASDAQ New highs - New lows: 254-125
WTI crude oil: 97.97, -0.47
Gold: 1,350.20, -16.70
Silver: 21.25, -0.427
Tuesday, June 18, 2013
When Three Strikes Is a Home Run
In the game of baseball, there are rules, immutable and unchanging. Three outs per inning. A caught fly ball is an out. Three strikes and you're out.
The world of high finance, as demonstrated daily on the trading platforms, carries no such rules, other than simple casino-style paradigms. Make the right bet, at the right time, and you're a winner, after the various parties to the trade take their respective cuts, of course. The broker gets theirs, the government, another. It's more about timing and luck, especially these days, when nothing much matters other than the directionality of the various computer algos plying and playing the indices.
So it is that in stocks, you have situations like today, wherein three strikes equates to hitting a home run. Prior to the opening bell, three different sets of economic data were presented, and, against expectations, all were swings and misses, except maybe the seasonally-adjusted building permits, which could be weighed as a foul tip into the catcher's mitt, a strike by any other name.
First came the May CPI, up 0.1%, on expectation of a rise of 0.2%, well short of the Fed's annualized two percent inflation target. Strike one. Next up, housing starts, which banked 914K, well below expectations of 950K. Strike two. As mentioned above, building permits, which mean nothing other than somebody is planning to do something, like put up a fence or remodel a bathroom, were just under the expected annualized rate of 975K - at 974K. Strike three.
The market response was as expected, with deference and possibly blissful ignorance toward the headline numbers, straight up all day, a veritable home run, even as auto sales in Europe reached 20-year lows and an agent of our very own secret police, the NSA (No Such Agency, to wise guys) testified to congress that the wholly unconstitutional massive spying program that filters every American's phone calls, emails and internet activity, prevented the bombing of the NY Stock Exchange by some nefarious, insidious suspect known only as "the doctor" in 2008. The NSA says more than 50 terrorist plots were uncovered by their spy programs since 9/11/2001. Not even the best Hollywood script writers could have come up with a better narrative to deprive citizens of their fourth amendment rights. Those NSA guys hire only the best, you know.
Thus stocks ended the day close to all-time highs once again. The Dow Industrials are within spitting distance - less than 100 points - of the May 28 closing high of 15,409.39 as the Fed ponders what to do next, wrapping up their two-day FOMC meeting on Wednesday. A policy decision is due out at 2:00 pm EDT, followed by a reading of the statement and press conference, by everybody's favorite "doctor," the dis-honorable Ben Bernanke, balding, bearded, wizened Chairman of the Federal Reserve.
With recent jawboning efforts pointing toward some tightening of Fed policy, the markets seem to be expecting no change in course for the every-easy Fed, and, while there's some nervousness over the wording of the statement, one might suspect that an even more important date - expiry of June options contracts on Friday - may be what's really driving the markets higher this week.
With baited breath we await the words offearless leader the Chairman. Can't wait.
Dow 15,318.23, +138.38 (0.91%)
NASDAQ 3,482.18, +30.05 (0.87%)
S&P 500 1,651.81, +12.77 (0.78%)
NYSE Composite 9,399.63, +61.74 (0.66%)
NASDAQ Volume 1,593,283,375
NYSE Volume 3,392,735,750
Combined NYSE & NASDAQ Advance - Decline: 4430-2051
Combined NYSE & NASDAQ New highs - New lows: 327-76
WTI crude oil: 98.44, +0.67
Gold: 1,366.90, -16.20
Silver: 21.68, -0.081
The world of high finance, as demonstrated daily on the trading platforms, carries no such rules, other than simple casino-style paradigms. Make the right bet, at the right time, and you're a winner, after the various parties to the trade take their respective cuts, of course. The broker gets theirs, the government, another. It's more about timing and luck, especially these days, when nothing much matters other than the directionality of the various computer algos plying and playing the indices.
So it is that in stocks, you have situations like today, wherein three strikes equates to hitting a home run. Prior to the opening bell, three different sets of economic data were presented, and, against expectations, all were swings and misses, except maybe the seasonally-adjusted building permits, which could be weighed as a foul tip into the catcher's mitt, a strike by any other name.
First came the May CPI, up 0.1%, on expectation of a rise of 0.2%, well short of the Fed's annualized two percent inflation target. Strike one. Next up, housing starts, which banked 914K, well below expectations of 950K. Strike two. As mentioned above, building permits, which mean nothing other than somebody is planning to do something, like put up a fence or remodel a bathroom, were just under the expected annualized rate of 975K - at 974K. Strike three.
The market response was as expected, with deference and possibly blissful ignorance toward the headline numbers, straight up all day, a veritable home run, even as auto sales in Europe reached 20-year lows and an agent of our very own secret police, the NSA (No Such Agency, to wise guys) testified to congress that the wholly unconstitutional massive spying program that filters every American's phone calls, emails and internet activity, prevented the bombing of the NY Stock Exchange by some nefarious, insidious suspect known only as "the doctor" in 2008. The NSA says more than 50 terrorist plots were uncovered by their spy programs since 9/11/2001. Not even the best Hollywood script writers could have come up with a better narrative to deprive citizens of their fourth amendment rights. Those NSA guys hire only the best, you know.
Thus stocks ended the day close to all-time highs once again. The Dow Industrials are within spitting distance - less than 100 points - of the May 28 closing high of 15,409.39 as the Fed ponders what to do next, wrapping up their two-day FOMC meeting on Wednesday. A policy decision is due out at 2:00 pm EDT, followed by a reading of the statement and press conference, by everybody's favorite "doctor," the dis-honorable Ben Bernanke, balding, bearded, wizened Chairman of the Federal Reserve.
With recent jawboning efforts pointing toward some tightening of Fed policy, the markets seem to be expecting no change in course for the every-easy Fed, and, while there's some nervousness over the wording of the statement, one might suspect that an even more important date - expiry of June options contracts on Friday - may be what's really driving the markets higher this week.
With baited breath we await the words of
Dow 15,318.23, +138.38 (0.91%)
NASDAQ 3,482.18, +30.05 (0.87%)
S&P 500 1,651.81, +12.77 (0.78%)
NYSE Composite 9,399.63, +61.74 (0.66%)
NASDAQ Volume 1,593,283,375
NYSE Volume 3,392,735,750
Combined NYSE & NASDAQ Advance - Decline: 4430-2051
Combined NYSE & NASDAQ New highs - New lows: 327-76
WTI crude oil: 98.44, +0.67
Gold: 1,366.90, -16.20
Silver: 21.68, -0.081
Monday, June 17, 2013
Nowhere to Run for Suckers
There was nowhere to run for anybody who bought into today's "rally" - and how can it be called a rally if the only people participating are pumping futures from some back office in Hoboken just to get an imaginary boost in the equities markets, shooting everything higher right at the open only to close below that starting point.
Around 2:00 pm EDT there was a major selloff, telltale of the gutless rip-off merchants which have been roaming the canyons of Wall Street the past decade or two. All the markets gave ground, only because those who had bought in the morning, pushing stocks to artificially-inflated levels (they've only been doing it for the past five years, without pause, so they should know what they're doing), decided that it was time to skin some of their own clients, and those of other firms, such is the nature of the game they play.
The equity markets are a sick, tired, stupid joke. One would think that after five years of stimulus by the Fed, the US economy, and maybe even the world economy, would be cranking along at a better clip than what amounts to the "new normal," which is nothing but vapor and badly over-managed economic data that is so far off the mark from reality to be laughable if only it wasn't so sick and perverted.
Speaking of sick and perverse, those who run the show on Wall Street and in the central banking cartel that is destroying the global economy - mostly alumni of Goldman Sachs and JP Morgan - are nothing but small, twisted creatures, afraid primarily of their own shadows.
But, it matters none to them, because the people they deal with as clients are smaller, and more frightened, and venal and ignorant and important only to themselves, so the narcissism carries through the entirety of the upper crust, as does vanity and pride and probably a whole of of more than just the seven deadly sins.
These people think their money has value in a better regard than say, friendship, honesty, morality, decency or truth, but, as they have learned from their role models in the political vein, those values don't matter. At the end of the day, everyone is supposedly measures in dollars. And if you ain't got 'em, you ain't nothing.
It's too bad. Seriously, because their pride will bring a fall, as sure as the sun follows the rain and bees make honey. These folks - the bankers and politicians - are nothing but cheap criminals, skimmers, really, who would steal the diamonds off their mother's engagement ring if in dire straits. The people who get nozzled into the game through IRAs, 401ks, pension and other products of financial scammery are suckers only by their willingness and play along because they have not an original idea in their heads.
They might as well just crash the whole thing and start over, The current flimflam that poses as wealth creation or preservation or management is nothing but a semi-sophisticated game of three-card monty. The dealers take their percentage, as does the house, and players chasing the dough generally end up with less on the way out than they had on the way in.
Tough. Win, lose, or go home. Somebody needs another dollar.
Dow 15,179.85, +109.67 (0.73%)
NASDAQ 3,452.13, +28.58 (0.83%)
S&P 500 1,639.04, +12.31 (0.76%)
NYSE Composite 9,337.89, +74.20 (0.80%)
NASDAQ Volume 1,580,505,125
NYSE Volume 3,464,888,250
Combined NYSE & NASDAQ Advance - Decline: 4272-2241
Combined NYSE & NASDAQ New highs - New lows: 259-47
WTI crude oil: 97.77, -0.08
Gold: 1,383.10, -4.50
Silver: 21.76, -0.196
Around 2:00 pm EDT there was a major selloff, telltale of the gutless rip-off merchants which have been roaming the canyons of Wall Street the past decade or two. All the markets gave ground, only because those who had bought in the morning, pushing stocks to artificially-inflated levels (they've only been doing it for the past five years, without pause, so they should know what they're doing), decided that it was time to skin some of their own clients, and those of other firms, such is the nature of the game they play.
The equity markets are a sick, tired, stupid joke. One would think that after five years of stimulus by the Fed, the US economy, and maybe even the world economy, would be cranking along at a better clip than what amounts to the "new normal," which is nothing but vapor and badly over-managed economic data that is so far off the mark from reality to be laughable if only it wasn't so sick and perverted.
Speaking of sick and perverse, those who run the show on Wall Street and in the central banking cartel that is destroying the global economy - mostly alumni of Goldman Sachs and JP Morgan - are nothing but small, twisted creatures, afraid primarily of their own shadows.
But, it matters none to them, because the people they deal with as clients are smaller, and more frightened, and venal and ignorant and important only to themselves, so the narcissism carries through the entirety of the upper crust, as does vanity and pride and probably a whole of of more than just the seven deadly sins.
These people think their money has value in a better regard than say, friendship, honesty, morality, decency or truth, but, as they have learned from their role models in the political vein, those values don't matter. At the end of the day, everyone is supposedly measures in dollars. And if you ain't got 'em, you ain't nothing.
It's too bad. Seriously, because their pride will bring a fall, as sure as the sun follows the rain and bees make honey. These folks - the bankers and politicians - are nothing but cheap criminals, skimmers, really, who would steal the diamonds off their mother's engagement ring if in dire straits. The people who get nozzled into the game through IRAs, 401ks, pension and other products of financial scammery are suckers only by their willingness and play along because they have not an original idea in their heads.
They might as well just crash the whole thing and start over, The current flimflam that poses as wealth creation or preservation or management is nothing but a semi-sophisticated game of three-card monty. The dealers take their percentage, as does the house, and players chasing the dough generally end up with less on the way out than they had on the way in.
Tough. Win, lose, or go home. Somebody needs another dollar.
Dow 15,179.85, +109.67 (0.73%)
NASDAQ 3,452.13, +28.58 (0.83%)
S&P 500 1,639.04, +12.31 (0.76%)
NYSE Composite 9,337.89, +74.20 (0.80%)
NASDAQ Volume 1,580,505,125
NYSE Volume 3,464,888,250
Combined NYSE & NASDAQ Advance - Decline: 4272-2241
Combined NYSE & NASDAQ New highs - New lows: 259-47
WTI crude oil: 97.77, -0.08
Gold: 1,383.10, -4.50
Silver: 21.76, -0.196
Friday, June 14, 2013
Stocks Finish Lower; Dow, S&P Down 4th Week of Last Five
Bears took back control on Friday, sending the major averages to their fourth session loss of the week. Thursday was the only up day for the markets.
In case anyone wants to figure out what's going on, good luck. Between Fed jawboning and interest rate speculation, VIX movements and the Fed's relentless bond-buying, it's a mixed bag, but the bears seem to have an edge during this period between economic data and second quarter earnings releases, which begin in just over three weeks time.
The Dow and S&P registered their fourth weekly loss in the last five. The strangest indicator came in the form of new highs vs. new lows, where the string of wins by the new 52-week lows was cut off at three, Friday's tape showing the new highs with an unusual advantage on such a largely lower day. Those are telling signals, but more will be revealed about direction upon the conclusion of the FOMC meeting, Tuesday and Wednesday of next week, culminating in Bernanke's press conference.
Bias still remains to the downside.
Outside the market, continuing scandals are rocking the capitol, and the US has committed "something" to the Syrian rebels, though details thus far have been sketchy.
As they say in the old school of hard knocks, "another week, another half a dollar."
Dow 15,070.18, -105.90 (0.70%)
NASDAQ 3,423.56, -21.81 (0.63%)
S&P 500 1,626.73, -9.63 (0.59%)
NYSE Composite 9,263.69, -67.69 (0.73%)
NASDAQ Volume 1,422,469,500
NYSE Volume 3,241,179,500
Combined NYSE & NASDAQ Advance - Decline: 2534-3951
Combined NYSE & NASDAQ New highs - New lows: 161-53
WTI crude oil: 97.85, +1.16
Gold: 1,388.10, +10.30
Silver: 21.96, +0.377
In case anyone wants to figure out what's going on, good luck. Between Fed jawboning and interest rate speculation, VIX movements and the Fed's relentless bond-buying, it's a mixed bag, but the bears seem to have an edge during this period between economic data and second quarter earnings releases, which begin in just over three weeks time.
The Dow and S&P registered their fourth weekly loss in the last five. The strangest indicator came in the form of new highs vs. new lows, where the string of wins by the new 52-week lows was cut off at three, Friday's tape showing the new highs with an unusual advantage on such a largely lower day. Those are telling signals, but more will be revealed about direction upon the conclusion of the FOMC meeting, Tuesday and Wednesday of next week, culminating in Bernanke's press conference.
Bias still remains to the downside.
Outside the market, continuing scandals are rocking the capitol, and the US has committed "something" to the Syrian rebels, though details thus far have been sketchy.
As they say in the old school of hard knocks, "another week, another half a dollar."
Dow 15,070.18, -105.90 (0.70%)
NASDAQ 3,423.56, -21.81 (0.63%)
S&P 500 1,626.73, -9.63 (0.59%)
NYSE Composite 9,263.69, -67.69 (0.73%)
NASDAQ Volume 1,422,469,500
NYSE Volume 3,241,179,500
Combined NYSE & NASDAQ Advance - Decline: 2534-3951
Combined NYSE & NASDAQ New highs - New lows: 161-53
WTI crude oil: 97.85, +1.16
Gold: 1,388.10, +10.30
Silver: 21.96, +0.377
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