Can there be any further doubt that the Federal Reserve is intervening - i.e., trading - in the equity markets?
Let's ask that again.
Is the Fed buying stocks?
You betcha!
Once again, today, the Dow pierced the 17,500 mark to the downside in early trading, and, has become the normal pattern, stocks took a steady advance off the lows to finish higher, and well away from the bottom of the trading range (17,500-18,000) that has persisted for three months.
Clearly, the Fed has no clue what to do except issue press releases and threaten to raise rates, all in an economic environment that is screaming stagnation and portending a nasty recession.
Also evident is the continuing manipulation of the precious metals markets. Gold and silver were both sharply higher early in the day, but were slaughtered in the afternoon for no apparent reason (other than being competition to all forms of fake fiat money). Silver fell from a high of $17.80 to under $17.20 in the course of six hours, a move of more than four percent. Gold, which had pierced the $1300 mark, was also dispatched, dropping to $1280 from a high of $1315, a $35 move, nearly four percent to the downside.
Everything is completely fake and markets (and maybe people) will only withstand the onslaught of intervention and manipulation for only so long.
How long?
When everything has gone to hell in a hand basket.
Fake, Fake, Fake, Fake!
S&P 500: 2,078.00, +6.50 (0.31%)
Dow: 17,733.10, +92.93 (0.53%)
NASDAQ: 4,844.92, +9.98 (0.21%)
Crude Oil 45.96 -4.27% Gold 1,283.70 -0.36% EUR/USD 1.1238 -0.20% 10-Yr Bond 1.56 -2.01% Corn 424.75 -0.99% Copper 2.05 -1.75% Silver 17.21 -1.67% Natural Gas 2.86 -0.63% Russell 2000 1,147.08 -0.19% VIX 19.24 -4.47% BATS 1000 20,677.17 0.00% GBP/USD 1.4213 +0.12% USD/JPY 104.3545 -1.54%
Thursday, June 16, 2016
Wednesday, June 15, 2016
Fed Does Not Hike Rates, As Expected; Markets Dull
Not only has the Fed run out of inflation-and-recession-fighting tools and rhetoric, but the US central bank seems to be running out of mental acuity and moral purpose.
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
What they do possess is an abundance of political correctness and political policy, used to keep watchers of global economies on their toes and the general populace in a trance.
The FOMC did today what they have done for most of the past seven years: they kept the federal funds rate unchanged. Since December, 2008 the federal funds rate has remained at 0.00-0.25%, until a one-time hike in December of 2015, raised the rate to 0.25-0.50, where it remains.
Citing a troubling employment picture after May's non-farm payroll figures came in at just 38,000 jobs, the Fed decided to delay their threatened rate hike for the foreseeable future, or, at least until the next meeting, in July, at which time they will likely find another reason to keep rates at ridiculously low levels to enrich those at the top of the money tree while at the same time impoverishing and punishing savers.
The policies of the Federal Reserve and their fellow central bankers in other countries are pointless and harmful. Since the financial collapse of 2008-09, their mangled ideologies have done little to stimulate any economy of any country. What's worse, these policies have afforded spendthrift governments the world over to borrow trillions at absurdly low rates, enslaving their populations to onerous taxation, promises of pension which will eventually collapse, and a general overburden of rules, regulations, fees, and legislation.
At the same time, civil liberties are dying at a pace close to that of a once-promising middle class, thanks to the moral turpitude of the central banker cabal and the lap-dog behavior of national governments.
While Wall Street has variously loved and desired low interest rates for a long time, this era has seemingly run its course, as today's market reaction shows. No longer is Wall Street enamored of rates close to zero; banks can't make much money on any spread, and debt over-saturation is a risk which few, if any, honest bankers wish to address.
The Fed (in)action and the slumbering reaction are signs that the age of ZIRP is at an end, and the sooner it ends, the better, but nobody is holding his or her breath waiting for central bankers to admit their mistakes and return to more normal, productive interest rates.
The Rise and Fall of Everything in One Day:
S&P 500: 2,071.50, -3.82 (0.18%)
Dow: 17,640.17, -34.65 (0.20%)
NASDAQ: 4,834.93, -8.62 (0.18%)
Chart for ^IXIC
Crude Oil 47.50 -2.06% Gold 1,295.80 +0.58% EUR/USD 1.1265 +0.04% 10-Yr Bond 1.60 -0.93% Corn 430.75 -1.32% Copper 2.09 0.00% Silver 17.56 +0.30% Natural Gas 2.87 -0.97% Russell 2000 1,149.30 +0.13% VIX 20.14 -1.76% BATS 1000 20,677.17 0.00% GBP/USD 1.4196 0.00% USD/JPY 105.8460 -0.14%
Tuesday, June 14, 2016
Slump Continues For Stocks; Oil Lower As Discontent Grows
While the world awaits an edict from the high halls of the Federal Reserve on Wednesday, when the FOMC concludes their two day meeting and announces no change in the federal funds rate, investors appear increasingly nervous, not over the expected nothingness dictum from the Fed, but from the overall malaise that has captured markets, otherwise known as stagnation.
What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.
Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.
Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).
Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."
The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.
Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.
The policies and practices of the past 20 or 30 years cannot continue indefinitely.
The time is coming for major change.
Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)
Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%
What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.
Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.
Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).
Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."
The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.
Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.
The policies and practices of the past 20 or 30 years cannot continue indefinitely.
The time is coming for major change.
Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)
Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%
Monday, June 13, 2016
Markets Lower On Brexit And Rate Hike Fears
Of the various events that might cause investors to give pause to buying stocks, or, worse, start selling en masse, the two most terrifying are probably the threat of the UK leaving the European Union (aka, Brexit) and the ongoing dialogue from the Federal Reserve concerning raising the federal funds rate.
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
Friday, June 10, 2016
As Expected, Dow Falls Back Into Sub-18,000 Range
Editor's Note: Apologies are in order for the tardiness of the extended post, but the publisher has been trying to cope with an unfair labor situation and other troublesome issues. Those are now past. This blog shall forge ahead.
The week ended on a down note, as stocks fell across the board on the US indices.
While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.
More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.
US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.
Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.
The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.
None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.
The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.
Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.
For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.
The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.
For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)
Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)
Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%
The week ended on a down note, as stocks fell across the board on the US indices.
While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.
More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.
US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.
Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.
The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.
None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.
The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.
Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.
For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.
The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.
For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)
Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)
Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%
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