Warren Buffet Really Gets Under Your Skin; Big Market Decline Probably Means Nothing

Warrenn Buffett bears a
striking resemblance to the Wizard of Oz.

Announced today, the merger of Kraft and Heinz creates the fifth largest food company in the world and the third-largest in North America.

At the center of this mega-merger is none other than America's cuddliest billionaire, Warren Buffett and his squid-like Berkshire-Hathaway corporation. With this, Buffett now touches nearly all aspects of the average American's daily life, and, most essentially his or her food consumption.

Buffett, it was pointed out by a wily poster on a popular financial website, needs only to buy a significant interest in Monsanto or ADM and Newcomer Funeral Homes and he would have his had firmly in a "cradle to grave" solution for every man and woman in the United States, growing GMO-laced food products which deny nutrition and selling them nationally, slowly killing humans, and then taking a share of their post-breathing lives with embalming, burying or cremation.

Thus, Mr. Buffett has finally gotten under the skin of the average American consumer, and not in a good way. The combination of Heinz (John Kerry's wife, Theresa Heinz is a major owner) and Kraft would have been subject to severe scrutiny by regulators under an effective anti-trust regime, but the antiquated notion of competition has been slowly squeezed from the national conscience long ago.

In our new dystopian world, we will have but a few providers of every necessary service. Reference the merger of Charter Communications and Time Warner Cable, Staples and Office Depot, et. al. Fewer choices, fewer decisions to make. What a wonderful world.

As far as the massive market declines on the day are concerned, they are probably about the same as the last dozen or twenty or so that have occurred since March of 2009, when the current bull market began when the FASB abandoned all reason and did away with mark-to-market accounting. Since then it's been all fraud, all the time, with no end in sight.

Today's big dips in stocks are nothing more than a continuum of the controlled demolition of the global economy, led by the United States stock markets. Sell-offs are nothing more than profit-taking efforts by the controlling interests and their whiz-bang computers, to be followed, in short order, by concentrated buying and new all-time highs.

Nothing new under the sun. And nothing to see here. Move along, now.

Meanwhile, the Atlanta Fed predicts the first quarter 2015 GDP growth at 0.2%, WTI crude oil futures were up 3% on the day in the face of a string of the largest crude stockpile supply growth ever, but likely the cause/result of a falling dollar. Durable goods for February were down for the second straight month.

Some of this actually makes sense, but only on a selected basis.

Dow 17,718.54, -292.60 (-1.62%)
S&P 500 2,061.05, -30.45 (-1.46%)
NASDAQ 4,876.52, -118.21 (-2.37%)

What China is Making, the World Isn't Taking

With not much in the way of company news or economic data to spur stocks in any particular direction, stocks - if you believe there is still a viable market out there - may have taken their queues today from China, where manufacturing slipped to its lowest level in nearly a year.

HSBC's purchasing manager's initial survey for March fell to 49.2, signaling contraction, from January's reading of 50.7, the worst reading in 11 months. The survey is designed so that numbers above 50 indicate expansion, under 50, contraction.

This should not have been a surprise to anyone on Wall Street, because they know how China's dumplings are boiled. They're reliant on exports of manufactured goods, primarily to the United States and Europe.

Therefore, if those two consumer groups are not buying, China isn't selling. And that's exactly what has been going on for months now, if not years. Economic numbers in all areas of the world are slightly skewed by regional and political preference, but when China, widely regarded as the world's engine of growth in the 21st century, actually shows manufacturing in decline, it's likely much worse than reported.

There isn't much about boosting manufacturing that the central banks of the world haven't already tried and found to not work, so it's likely, at this point, up to individuals to get out and spend.

Not. Gonna. Happen.

Europe is bankrupt. The USA has gone, in sixty short years, from being a creditor nation, to debtor nation, to where we are today, on the cusp of becoming a deadbeat nation.

In popular parlance, a deadbeat is somebody who borrows and doesn't pay back its debts. Well, the good, old USA can do attitude hasn't been getting it done for a long, long time. Which is why we have a federal debt of over $16 Trillion. The government doesn't pay off its debts; it rolls them over into new debt, something that, if you or I or your neighbor tried to do, we'd be laughed all the way to the nearest courthouse.

The US government has seemingly been intent upon destroying the country, the currency, and the popular notion of being the "land of the free." The failure of politicians to even attempt to fix the various parts of our fiscal condition that are broken is at the bottom of not only the Fed's Zero Interest Rate Policy (ZIRP) but also is tearing away at the fabric of the nation, and people are beginning, at last, to notice, and worse, they're doing something about it.

They're not buying. They're not buying Chinese products. They're not buying politicians' promises. They're not buying Wall Street's scams. They're not buying government statistics because people in America don't consider themselves statistics. They consider themselves people.

People matter. Governments come and go. It may be getting close to the time that some of the bigger ones get up and leave.

But, they'll probably need a little push... over the cliff.

Dow 18,011.14, -104.90 (-0.58%)
S&P 500 2,091.50, -12.92 (-0.61%)
NASDAQ 4,994.73, -16.25 (-0.32%)

19 CENT CHEESEBURGERS, Ted Cruz and a Dow Mystery

We have a bad monetary system. A shaky one at the very least, but, probably just plain bad.

McDonald's menu, circa 1965

It would take a tome longer than Adam Smith's The Wealth of Nations to explain why. However, in today's world, we have technology, which is, by most accounts, an improvement to the general welfare and happiness of the people of the world, or so we think.

This technology allows us to share images such as the one shown in this simple blog posting.

The point, or points, as there are many diverse levels to this discussion, is that our monetary system is based upon, in no particular order, debt currency, inflation and death.

Ponder, if you will, the fact that the Dow Jones Industrial Average fell roughly 50 points in the final minutes of trading today, and the price of a cheeseburger, roughly 50 years ago, was 19 cents. The question is why did the Dow fall so precipitously at the close and what does that have to do with the price of cheeseburgers?

Yes, 19 cents. Your editor ate many of them, as there was a McDonald's and competing burger joints near his high school.

19 cents, people. Grow up.

Dow 18,116.04, -11.61 (-0.06%)
S&P 500 2,104.42, -3.68 (-0.17%)
NASDAQ 5,010.97, -15.44 (-0.31%)

Sub-note: Consider this: today Ted Cruz, a first term senator from Texas, announced his candidacy for president, officially kicking off the campaign season for the 2016 presidential election. This election is, as of today, 19 months away. In't it time we put limits on when politicians can campaign? Isn't 19 months prior to an election just a tad too early to start thinking about who will be the next president? Mind you, a presidential term lasts four years. Must we spend half of one president's term deciding who should be his or her replacement?

Today, sadly, we have more questions than answers. If we had the answers, assumably, we would probably not be spending time asking questions on a blog.

Weekend Thinking: After Friday's Stock Ramp-fest, Nothing About Which to Worry

Editor's Note: Apologies for the late post. An unrelenting schedule is causing disruption to the usual appointed tasks. This condition may persist for a few months and posts on Money Daily may not - for a while - be as timely and/or detailed.

Friday's trade was all about getting back to the preferred narrative following the "prudent" nature of the latest FOMC release and Fed news conference, that of everything being just peachy, rosy and wonderful in the land of fairy tale economics, where flying unicorns discharge fiat from rainbow skies.

Reality may beg to differ with the ongoing assessment of the national and global economies, but, for the time being, the clowns, gamblers, skimmers and scammers are in control. What will wrest away domination of the markets from the hands of the manipulators is at best uncertain, at worst unknown, but all are aware that adam Smith's "invisible hand" is lurking, ready to snatch back sanity and price discovery to a state of natural order.

What is understandable at present is that Fed policy will remain neatly tucked into its quasi-accommodative commode for at least another six months and very likely longer. It is, in fact, beyond seven years since the past rate increase, and, as has been proven by other central banks, negative yields remain an unexplored horizon. Like the discovery of a new world, the Fed may be eyeing the current 10-year note yield of two percent as merely the shoreline, with untold riches and possibilities lying within the lower bound.

A socialist fantasy dream, bond yields that would cost savers and benefit spenders could be a panacea that eventually turns economic theory completely upon its head and ushers in a new world order of wealth redistribution under some mystical, benevolent oligarchy.

The future may well be one which attempts to disregard the past. And that new world would be brave indeed.

Dow 18,127.65, +168.62 (0.94%)
S&P 500 2,108.10, +18.83 (0.90%)
NASDAQ 5,026.42, +34.04 (0.68%)

Stocks Give Back Some Gains

We took a personal day today, but did notice that the crooks gave back some of the money they stole yesterday, a la the old pump and dump routine.

Most of us had to work, but who could blame anyone for taking some time off to check out NCAA tournament early games.

Oil fell back to earth simply because there was no fundamental reason for oil to gain in price yesterday, as interest rates have about as much to do with the price of oil as saddle soap has to do with masochism (don't get any ideas).

Bottom line is that rich guys who play with other people's money (your pension fund) skimmed and scammed their way to a new car or maybe a year's tuition for their "special" princess.

Whatever. Week ends tomorrow, full report.

Dow 17,959.03, -117.16 (-0.65%)
S&P 500 2,089.27, -10.23 (-0.49%)
NASDAQ 4,992.38, +9.55 (0.19%)