Government Shutdown in 3... 2... 1... Is All Hype and Bad Theater

Stocks started the session in the red and stayed that way all day.

Pundits say the sell-off (Dow, S&P down six of the last seven sessions) is due to either the threat of a government shutdown or overvaluation.

The latter is probably closer to the mark, if only because the government taking a few days off next week isn't going to affect stocks very much; maybe a couple of select companies, but in general, a government shutdown is a big, fat nothing-burger, with fries.

However, as the current casino games are being played, stocks will rise the moment a deal is struck in Washington, hoping to pull in more retail suckers investors with indices at close to all-time highs and many stocks ridiculously valued, many of which are listed on the NASDAQ.

If the federal government does shut down, it will only be for a few days. By then the Republicans will save face, saying that they don't want any more suffering by ordinary people. The truth is they don't really care about ordinary people, except when they're within fifty feet of a voting booth and said politician's name is on the ballot.

The showdown in Washington is just another example of how servile and juvenile our federal government has become. It has far overstepped the bounds of the constitution and now plies the media in order to torment the citizenry.

Thank goodness it's Friday and one can tune out most of the noise and the nonsense.

And, someday, we'll actually have functioning, rational markets. Sure, someday.

Dow 15,258.24, -70.06 (0.46%)
Nasdaq 3,781.59, -5.83 (0.15%)
S&P 500 1,691.75, -6.92 (0.41%)
10-Yr Bond 2.62%, -0.02
NYSE Volume 3,224,407,000
Nasdaq Volume 1,664,139,000
Combined NYSE & NASDAQ Advance - Decline: 2278-4160
Combined NYSE & NASDAQ New highs - New lows: 169-46
WTI crude oil: 102.87, -0.16
Gold: 1,339.20, +15.10
Silver: 21.83, +0.065

Washington's Paper Tigers Just Do It and Churn

You've got to be kidding, right?

This non-market, completely underpinned by the $1.02 Trillion annual Bernanke Put, despite the usual theatrics from Washington's paper tigers who can stand around, do nothing, occasionally take to a podium to swear at the other side and eventually cave in to their bankster bosses, still hasn't made new highs.

Sad, really, even as Nike led all indices higher today, especially the Dow, now a worthless contraption engineered to be a perpetual motion machine. If the Dow doesn't go up, they'll just kick out the losers and put in a couple of winners, keeping everybody indexed and happy as clams.

The government isn't going to shut down, nor is it not going to raise the debt ceiling.

Relax. Buy stocks. You will thank Money Daily in December, just before you relinquish 20-40% of your gains to the government. That's how it works, and, if it doesn't, the government will fine you, a la JP Morgan or maybe some Japanese auto parts makers. Fines are the new tax because most intelligent people have already figured out how not to pay ordinary taxes.

Peace.

Dow 15,328.30, +55.04 (0.36%)
Nasdaq 3,787.43, +26.33 (0.70%)
S&P 500 1,698.67, +5.90 (0.35%)
10-Yr Bond 2.64%, +0.03
NYSE Volume 3,008,154,250.00
Nasdaq Volume 1,755,595,375
Combined NYSE & NASDAQ Advance - Decline: 3943-2527
Combined NYSE & NASDAQ New highs - New lows: 256-38
WTI crude oil: 103.03, +0.37
Gold: 1,324.10, -12.10
Silver: 21.77, -0.12

America's Economy - and Society - is Grinding to a Halt

What a mess!

Stocks were down for the fifth consecutive session on Wednesday as congress fails to grasp the seriousness of any situation, be it the budget (substitue a continuing resolution), Obamacare (possibly the worst law ever passed) or the debt ceiling (due to run out of extraordinary measures by October 17, according to Treasury Secretary Jack Lew).

Meanwhile, the country does a slow burn; jobs aren't being created, business is stuck between bad choices and worse choices; governments - federal, state and local - can't make their budgets work.

Deflation has been taking hold in a rather large way, despite the best (wosrt) efforts by the Fed, through QE, to stimulate through inflation (another bad idea). There isn't any growth in manufacturing, the lifeblood of any economy, in the United States for thirty years. Our debts keep soaring. The Fed - and most other institutions - are failing the American people. Only the top 1% or maybe as little as 1/10 of the top 1% or as much as the top 10% are benefiting from centrally-planned economics.

There is no stock market, no price discovery mechanisms which can be reliably trusted, since the Fed now dominates all markets, from stocks to gold, silver, commodities, stocks and most especially, bonds, where the Federal Reserve is not only the buyer of last resort, they are also the first in line.

Obvious to anybody with an eye for such things, the recovery economics engineered over the past five years since the collapse of Freddie Mac, Fannie Mae, Lehman Brothers and assorted collateral damages, are simply not working, yet the government, in cahoots with the Fed, continues to support and maintain the same policies.

Maybe it's time for a reset, a revolution, some kind of change, but the NSA monitors every movement of the American public, keeping public protest to an absolute minimum, in shades strangely reminiscent of pre-war Germany in the late 1930s. we are all at risk, from the poorest to the richest, yet the richest feel secure that they are entitled to, and thus, have more, enough to sustain themselves through any crisis.

They are wrong, as history calmly reassures; the fall of the Roman empire, the French Revolution being only the two most prominent examples of mass chaos.

In five more days the federal government faces a shutdown of "non-essential" services. In two weeks after that, without authority for more borrowing, the US government will legally default on some of its obligations. Of course, those less-well-connected will feel the pinch first, the insiders, later, though by forces beyond the ken of their limited imaginations.

Here at Money Daily, we do not espouse default, disorder and carnage because it is damaging to everyone, but especially to those least able to protect themselves against it, which would include probably 90% of the population. Take a look around. How many of your neighbors can manage their own gardens, feed themselves, grow from seed, if necessary? How about you, yourself?

Sadly, the American public is so poorly educated in basic survival skills such as farming, gardening, water and fuel management, health and safety that a catastrophic condition renders most of the population at very high risk of disease and death.

Is this the kind of world we imagined to leave to the next generation? The human race is so deficient in so many aspects that survival of the entire species is questionable. The problems are enormous, but most will go back to their TV sets and TV dinners, ignoring the threats which are all around them, hoping beyond hope that government - the same one that caused and foments many of the issues and problems we face - will be there to support them and save them.

Readers of this blog may call us alarmists, but the signs of collapse of the system - of all systems - are abundant, though normalcy bias and cognitive dissonance prevent most from any meaningful understanding.

We could be days away from a complete tearing of the social fabric. Are you prepared? Do you even care?

The race to the bottom is accelerating, and there are no winners.

Here's the latest edition of the Keiser Report, for a glimpse into the kind of world in which we live:



Dow 15,273.26, -61.33 (0.40%)
Nasdaq 3,761.10, -7.16 (0.19%)
S&P 500 1,692.77, -4.65 (0.27%)
10-Yr Bond 2.61%, -0.04
NYSE Volume 3,403,673,000
Nasdaq Volume 1,791,265,125
Combined NYSE & NASDAQ Advance - Decline: 3174-3322
Combined NYSE & NASDAQ New highs - New lows: 258-38
WTI crude oil: 102.66, -0.47
Gold: 1,336.20, +19.90
Silver: 21.89, +0.30

Stocks Fail to Maintain QE Momentum; Dow Down Four Straight Sessions

After kicking up 148 points following the Fed's "no taper" announcement last Wednesday, it's been straight downhill for the venerable Dow Jones Industrials, even the addition of Goldman Sachs (GS), Visa (V) and Nike (NKE) to the mix unable to stem the outflow from the blue chip index.

The Dow has given back all of those gains and then some, falling for the fourth straight session on Tuesday with a 66.79-point loss after dropping 49 and change on Monday. The S&P followed the Dow to the downside, though not registering such a large percentage loss, while the NASDAQ continued to defy gravity - thanks largely to Apple (AAPL), up marginally on the day, though losing ground into the close.

What's troubling traders and the indices isn't by any means certain, though the about-face and duplicitous moves by the Fed certainly aren't helping. While chairman Ben Bernanke continually espouses openness and transparency, last week's decision to keep asset purchases at current levels was viewed by the street as opaque and insensitive to markets. A lot of people were short going into the FOMC meeting and came out losing their shirts, their covering of positions adding to the upward movement right after the announcement.

Also weighing heavily is the federal government's intransigence on doing anything constructive. Democrats and Republicans are at loggerheads over the budget (or, continuing resolution, as the case may be), Obamacare and the debt ceiling, issues which need to be urgently resolved lest the government become permanently the laughing stock of the world community.

With the Dow off by some 342 points over the last four days, one might suspect that smart money has already headed for safer ground, witness the rally in treasuries, especially the 10-year note, which has fallen precipitously from close to a 3% yield to stand at the end of today at a relatively tame and aesthetically-pleasing, 2.65%.

The government isn't about to work out its problems soon, with an October 1 deadline looming for a government shutdown, which looks more and more likely to occur. The politicians have used up whatever patience the American people have had, and now risk being completely distrusted by the populace as the gang of thugs and ignoramuses they are.

Wall Street may be beginning to awaken to the facts on the ground that the US economy is still in dire straits which are about to get progressively worse and the run on blue chip stocks is telling.

There are just four trading days left in the quarter and traders are, by nature, an impatient bunch, prone to distrust uncertainty. The rest of this week could be a real bloodbath because the politicians can't agree on anything at all.

Dow 15,334.59, -66.79 (0.43%)
Nasdaq 3,768.25, +2.97 (0.08%)
S&P 500 1,697.42, -4.42 (0.26%)
10-Yr Bond 2.65%, -0.06
NYSE Volume 3,480,190,750
Nasdaq Volume 1,731,125,375
Combined NYSE & NASDAQ Advance - Decline: 3563-2953
Combined NYSE & NASDAQ New highs - New lows: 309-44
WTI crude oil: 103.13, -0.46
Gold: 1,316.30, -10.70
Silver: 21.59, -0.271

Dow Takes A Header on Realignment

It was a little like old times today. Back before there were supercomputers running the show, there used to be a term called, "late at the close," which signified the level of volume in the final frantic minutes of trading. Financial news announcers would say things like, "the tape was 12 minutes late at the close," meaning that the ticker tape that recorded trades ran past 4:00 pm due to the heavy volume.

Today, the Dow didn't settle out until well after ten minutes beyond the official close, due to the realignment. Bank of America, Hewlett Packard and Alcoa went out; Nike, Goldman Sachs and Visa went in.

It wasn't a fair exchange, and that had something to do with stocks closing at the lows of the day and the Dow outpacing the other averages to the negative. Bank of America is basically an insolvent holding company of the Fed, Hewlett Packard is a dead stock with limited upside potential and Alcoa is more or less nothing other than a proxy for the commodity price of aluminum.

The new entrants seem to have futures, though the addition of Goldman Sachs seems more sinister than anything else. After all, the company has been termed a "giant squid," because its tentacles reach into the netherworld recesses of business and politics.

Still stocks took a pretty good header today and prospects for the remainder of the month - just six more trading days - are not bright, since a government shutdown looms, Obamacare continues to move toward implementation and the complete catastrophe of the US health and labor markets and the country continues to spiral deeper into debt with a rancorous debate soon to come on raising the debt ceiling.

Nonetheless, the Fed has everyone's back, until, of course, they don't, at which time they will have the front, all sides and the keys to all of your property, real, personal and possibly intellectual, if they can strike a deal with Google, Yahoo, Amazon and the NSA.

The future is (fill in the blank... we're too afraid to).

And, BTW, when Warren Buffett says stocks are "fairly valued," it's time to sell, because that's what he's doing.

For the week:
Dow: +75.03
NASDAQ: +52.55
S&P 500: +21.92

Dow 15,451.09, -185.46 (1.19%)
Nasdaq 3,774.73, -14.66 (0.39%)
S&P 500 1,709.91, -12.43 (0.72%)
10-Yr Bond 2.73%, -0.02
NYSE Volume 5,065,868,500
Nasdaq Volume 2,335,355,500
Combined NYSE & NASDAQ Advance - Decline: 2339-4314
Combined NYSE & NASDAQ New highs - New lows: 332-45
WTI crude oil: 104.67, -1.72
Gold: 1,332.50, -36.80
Silver: 21.93, -1.365