Are We Recovering Enough?

Editor's Note: Money Daily stopped being a daily post blog in March, 2014. Well, it's now March, 2015, and, after a year off, little has changed, but Fearless Rick is once again re-charged to begin making daily (Monday - Friday) posts. This is, with hope, the first of many...

The following list is courtesy of the good squids over at Goldman Sachs.

From the start of February through March 2, these are the misses and beats of various US macro data.

MISSES

1. Personal Spending
2. Construction Spending
3. ISM New York
4. Factory Orders
5. Ward's Domestic Vehicle Sales
6. ADP Employment
7. Challenger Job Cuts
8. Initial Jobless Claims
9. Nonfarm Productivity
10. Trade Balance
11. Unemployment Rate
12. Labor Market Conditions Index
13. NFIB Small Business Optimism
14. Wholesale Inventories
15. Wholesale Sales
16. IBD Economic Optimism
17. Mortgage Apps
18. Retail Sales
19. Bloomberg Consumer Comfort
20. Business Inventories
21. UMich Consumer Sentiment
22. Empire Manufacturing
23. NAHB Homebuilder Confidence
24. Housing Starts
25. Building Permits
26. PPI
27. Industrial Production
28. Capacity Utilization
29. Manufacturing Production
30. Dallas Fed
31. Chicago Fed NAI
32. Existing Home Sales
33. Consumer Confidence
34. Richmond Fed
35. Personal Consumption
36. ISM Milwaukee
37. Chicago PMI
38. Pending Home Sales
39. Personal Income
40. Personal Spending
41. Construction Spending
42. ISM Manufacturing

BEATS

1. Markit Services PMI
2. Nonfarm Payrolls
3. JOLTS
4. Case-Shiller Home Price
5. Q4 GDP Revision (but notably lower)
6. Markit Manufacturing PMI

OK, so the US economy is going backwards at a 7:1 ratio of Misses to Beats, but stocks, since the beginning of February, have been roaring (today excluded).

The point is that stocks are ignoring the somber truth that the US economy is running on fumes and Wall Street is running on pretty much less than nothing (kinda like the motto for the NY Lottery - a dollar and a dream).

There are collapsing scenarios unfolding everywhere, from the disgusting behavior of executives at Lumber Liquidators (LL), who were exposed on 60 Minutes this past Sunday. There, the CEO says he didn't now that the below-cost flooring coming out of China didn't meet California (and much of the rest of the US states) standards for toxic emissions, especially formaldehyde. Sad fact is that after being punched down on Monday, the stock rallied more than 5% on Tuesday, but, worry not, it was at nearly 70 about a week ago, and was punished well before the TV coverage, down to around 40 now. Somebody knew something and obviously was front-running. Nothing new there, move along...

The award for most disgusting public display over the past few days is split between three distinct candidates:

• 1. The US congress, for cheering on the speech of Israeli Prime Minister, Benjamin Netanyahu, in a joint meeting.
• 2. The utter stupidity of millions on Twitter over whether some dress was white and gold or blue and black. Hasn't anyone ever heard of distortion?
• 3. The cops who shot the homeless guy in Los Angeles.

Like I said at the outset, not much has changed over the past year (or five years, for that matter). We're still kicking the can down the road, entrapped in a senseless bout of normalcy bias which is allowing the elite segment of society (Wall Street and DC, mostly) to trample on our freedoms and steal every last cent from the middle and lower classes, along with every shred of dignity.

Yep, like I said when I stopped writing daily diatribes a year ago, nothing is going to change until the Fed stops pumping money into the system. Well, they actually did stop, in the third quarter of last year, but the QE baton was quickly raised by Japan, and will shortly be taken up by the ECB, so, don't expect much to change any time soon. We've got at least a year and a half before the federal funds rate (you know, that one that seems to be permanently stuck between 0 and 0.25%, the rate at which the TBTF banks borrow) gets anywhere close to one percent, and even that could cause a panic in stocks.

In the meantime, the Baby Boomers are trying to figure out how to retire without any interest income, and that's an increasingly difficult trick, since the only reasonable yield one can get is at the far end of the curve, in 30-year bonds, currently hovering around 2.75%. $100,000 invested at that rate returns a whopping $2750 a year, so, you have to put up (and tie up) a million bucks just to live barely above the poverty level. Not much fun when you're 70 years old.

Deflation... it's what's for dinner (after the cat food).

Dow: 18,203.37, -85.26 (-0.47%)
S&P 500: 2,107.78, -9.61 (-0.45%)
Nasdaq 4,979.90, -28.20 (-0.56%)

More tomorrow...

Blowing Bubbles: NASDAQ Cracks 5000... Again!

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

It took nearly 15 years, but the NASDAQ Index finally has clawed its way back above the magical 5000 mark, closing today at 5008. The last time the NASDAQ closed over 5000 was on March 27, 2000, but, back then, it was going in the opposite direction, as the tech bubble was popped and investors were scrambling to hold onto gains in companies with no earnings, like Pets.com, Alta Vista and NetZero.

Today marked a 295% increase from the lows seen in March, 2009, so, conceivably, if one had the patience to hold the QQQs from then until now - just six short years - a near-quadrupling of one's money could be in hand at the close today. Of course, not even the most savvy investor, speculator or degenerate gambler could have been so lucky; stocks in the NASDAQ have been churned and turned, so the index looks quite a bit different than it did in 2009, even more so from 2000.

The NASDAQ of today is not quite as zippy as it was in the late 1990s. Volume is down dramatically and ten stocks - such as Apple, Google and Netflix - have provided more than 75% of the gains overall, so, it's likely that many investors were still stuck with moribund returns while the HFT algos ground higher for the one-percenters who control the market.

This nominal event evokes thoughts of the tech bubble and housing bubble, and shows some comparable characteristics. Special to the most recent rally of the past six years has been the incredible amount of liquidity provided by the Federal Reserve, an effect to which many ascribe the totality of the gains since 2009.

Whether we are once again in bubble territory remains not to be seen, but only to be verified. Talk, being the cheap commodity that it is, says loosely that stocks today are much better values, though recent macro data on the general economy, plus geo-economic conditions, seem to be pointed in a completely different direction.

Money Daily, convinced that we are once more headed for a collapse of astounding proportions, will resume regular daily postings with this writing.

Stay tuned. More information on the deformation of the markets is forthcoming.

Sunday Morning News Shows Have Become Un-Watchable, Unbearable

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Maybe it's just me.

Maybe I've gotten too old (61), too cranky, or too intolerant to listen to government and media morons every Sunday morning, or, to put it into closer perspective, ANY SUNDAY MORNING.

Today, since I can no longer stomach NBC's Meet the Press, I tuned into FoxNews Sunday, which airs at the same time in my market (thank goodness). After just four minutes of hearing why President Obama needs to call ISIS (ISIL) "Islamic Extremists," I was done. Is that kind of devolved worthless introspective what the news media (propagandists) deems important?

Or, maybe I should just sit through it, listen to the usually empty talking heads and the next potential Republican candidate for the 2016 presidential election and make my life choices based upon the trite script the networks wish to foist upon the American public.

That just doesn't seem to be a wise choice. Besides, we have the Brian Williams incident leading the indictment against mainstream news. Televised media, which took over when people stopped reading newspapers, is a hollow hell-hole of disingenuous political nonsense. Just watch any of these Sunday shows, or, a week's worth of evening news on ABCBSNBC, and count how many stories are devoted to government matters. It's nearly all of it.

Is that all that matters in America, anymore? What the government is doing?

Sorry, I'm tuning out.

There's better news coverage from alternative sources on the internet, and, I don't mean 140 characters on Twitter.

Rant over, and I still have 40 minutes of my life left that I used to spend "keeping up."

Glory!

And Now Comes the Crash

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Writing this morning as Dow futures are down around 275-300 points, market participants are reacting negatively to any number of factors, not the least of which was the truly ugly print of December durable goods orders, which came in at -3.4% against expectations of +0.3%.

Also revised lower were November's durable figures, from an already disappointing -0.7% to a dismal -2.1%.

The stock market crash, yes, the one that's been delayed since 2009 thanks to QE from the Fed, then Japan, and now, supposedly, from the European Union (EU), is upon us. The bull market that began when mark-t-market became mark-to-fantasy in March of 2009 has overstayed its welcome, and those who have not already jumped ship on tech stocks, income stocks, growth stocks (there's a real laugher for you; most companies' earnings for 2014 were lower than 2013 and 2015 will be lower still), or blue chip stocks, are about to get creamed, rapidly, starting today, but, when the Dow Industrials close below 17,068.87 (the close on December 16, 2014), for certain.

One only has to look at a recent chart of the Dow Jones Industrial Average and have a cursory understanding of Dow Theory to realize that the primary trend is about to change. Now, if it doesn't - if the Dow doesn't close below 17,068.87 and subsequently makes new highs, or, if it does close below that level and then makes new highs - then the market is being purposefully and blatantly manipulated. Besides the fact that most, if not all, markets have been manipulated since the crash of 2008, and probably well before that, a massive nosedive in stocks should come as little surprise to anybody, save those who hold out hope against hope that the Federal Reserve and the federal government, in all their wisdom, will save markets no matter what, which, in fact, is the core of manipulation itself.

Bull markets do not last forever. Lying and misguiding the public does not work forever. The public, that nebulous, unintelligible mass of humanity that follows blindly like sheep led to shearing or slaughter, will understand little of this, if any of it, but, we've collectively been led down a garden path to economic slavery and destruction by lying lawyers, bankers, CEOs, media and politicians, whose only concerns are their own, and against sound public policy.

Globally, economies are in a shambles. A raging currency war is merely pretext for a coming deep depression. While the United States may be the "cleanest shirt in a dirty laundry basket" it is no doubt still dirty, and a cleansing is overdue.

For too long, the American public has listened to the media, bankers and politicians who promised what they could not deliver: economic prosperity for everybody. It's a pipe dream, a facade, a fallacy, a Fugazy. The reckoning is upon us, just in time for the Super Bowl.

Just wait for the number: 17,068.87. When the Dow closes below that, it's game over, and no jawboning by Federal Reserve governors, or politicians, or media mouthpieces, can change that. A long, painful bear market will take the Dow and other averages to places nobody can imagine. At first, it will be called a correction (unless it absolutely crashes - like down 1000 points - today), but, make no doubt, it will be a bear market, followed by a recession, and then a depression (which, many will claim we are already in, since 2008).

Trust your own judgement, but, if you have not prepared for the worst of times, you are certain to live through them. Your portfolio allocations should look something like this: 20% Precious Metals; 60% cash; 20% survival/tradable/salable goods.

Best wishes to all.

SOTU 2015 Recap: Drink, Drink, Chug, Vomit; Oscar Wilde For The Win

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Just to be fair, we didn't exactly keep pace with the president in our SOTU drinking game.

Having chosen the top four words from our Top Ten list - taxes, jobs, Middle Class, and, economy - President Obama brought down the house on the jobs number, using that specific word (either in the singular or plural form) 24 times before we stopped counting. Smartly, he only said "tax" or "taxes" five times, used the term, "Middle Class" four times, "economy" 13 times and never once used the word "rich."

Where the president excelled, however, actually overwhelming even our rosiest expectations, was in the bonus chugs segment, in which he mentioned ten countries specifically, not including the United States (or America), which technically didn't count, and was, obviously, one of the more frequently used words in his hour-long speech to the nation.

Obama got off early with mentions of Afghanistan and Iraq, and, though it took a while for him to come up with the third county, Japan, he took charge with a quick rattling off of Syria, Russia, Ukraine, Cuba, Iran, Israel and China in short order.

What took the whole drinking effort to new levels was the president's expert rendering of the terrorist naming bonus, in which we instructed that the mention of three terrorist groups would constitute a chug command. Though Obama specifically named only one group by name, he nailed the ISIS-ISIL bonus at 9:45 pm, 35 minutes into the speech, calling his favorite Mideast thugs by their pet name, ISIL, invoking the rule of our game to promptly end in a spellbinding, chug-til-you-puke crescendo.

So intent was the president on getting the nation massively inebriated that he intoned "ISIL" again just one minute later. Strangely enough, his wording was actually foreshadowed by Mrs. Alan Greenspan (aka, Andrea Mitchell), who mentioned ISIL just minutes before the president made his way to the podium. We applaud the otherwise droll Mrs. Greenspan for her literary bravado.

Aside from yet another successful SOTU drinking panacea - Obama's sixth - the president's rhetoric was little more than a rehash of his last two SOTU addresses, replete with promises that will be broken and high-minded principles to which congress and the administration will find difficult, if not impossible, to personalize.

Generally, while we agree in principle with a good deal of Obama's vision of America (though free community college and health care coverage for everyone are a bit too far out on the socialist agenda for our tastes), we have grown tired of waiting for either the president or the congress to come through with specific actions. Empty rhetoric becomes tiresome in short time. Repetition of such tends to be unbearable.

On the humorous, if not tragic, side, the president made the bold claim that inflation was at its lowest level in 50 years, at the precise time that the Federal Reserve is in a death match to avert outright deflation. While the president wishes to point out that low inflation is a grand intention - and it is - the pedals of public policy are being pimped and pumped by the pervicacious pedants at the Fed in exactly the opposite direction, with, thankfully, limited success.

Perhaps, in a perverse and fateful way, the wisdom and wit of Oscar Wilde is prescient:

"There are only two tragedies in life: one is not getting what one wants, and the other is getting it."

By all appearances, neither the Fed, the president, nor the American public's aspirations will be satiated.