Markets Get Boost On Brexit Opposition; Fake Move Fades Throughout Trading Session

When equity prices jump suddenly at the opening bell by one percent or more - as they did today in New York - the only ones who benefit are those already in the market, with positions in the "selected" stocks.

Average investors have no opportunity to partake in the market's sudden generosity. Hedgers and speculators who played properly prior to the open are the big winners. Wealth is not created in any way, shape, or form, other than in a paper manner. It's a trade and soon enough it vanishes.

Stocks, for whatever they're worth (caveat emptor), lost half of their gains over the course of the day. The NASDAQ was up 88 points and closed up 36 and change. The S&P was up 29 points - hitting the magic 2100 spot, again - before falling throughout the day to close up a mere 12 points.

Blue chips fared no better. The Dow was up a whopping 271 points by 10:00 am EDT, but ended the day disappointing to all but the HFTs, who were no doubt front-running every single trade (it's rumored that there were a few hundred bettors in the game), ahead by only 129.

Most of the euphoria at the open was due to a media frenzy over the prospect of England remaining in the European Union. Polls have been tight, but the mainstream media continues to portray Thursday's upcoming vote as a referendum on patriotism for Brits. Vote to stay in the EU, you're a good citizen; vote to leave, or Brexit, you may just be a terrorist sympathizer.

Of course, the media spin is just that, all noise and no substance. Not only would leaving the EU be better for most working Britons, it would also send a powerful message to the status quo that their form of governing is no longer working, and must go. With so many government jobs on the line, the mainstream is pushing hard for a "stay" vote.

Last laugh of the day went to silver holders. Even the best efforts of the central bank cabal could not keep gold's little brother down, closing at 17.52 per troy ounce.

On that note, Hugo Slainas Price proposes a Silver Ruble for Russia. Interesting reading for anyone considering honest money.

Stormy Monday?
S&P 500: 2,083.25, +12.03 (0.58%)
Dow: 17,804.87, +129.71 (0.73%)
NASDAQ: 4,837.21, +36.88 (0.77%)

Crude Oil 49.17 +2.48% Gold 1,292.70 -0.16% EUR/USD 1.1307 -0.11% 10-Yr Bond 1.67 +3.21% Corn 422.75 -3.43% Copper 2.09 +1.80% Silver 17.52 +0.63% Natural Gas 2.97 +2.67% Russell 2000 1,158.05 +1.17% VIX 18.20 -6.23% BATS 1000 20,677.17 0.00% GBP/USD 1.4685 +1.52% USD/JPY 103.8550 -0.84%

Yellen And Fed Fail; Market Confidence Fades; Stockman Is Right; 13 Weeks On Dow Range

It's Friday, it's summer, so this recap of the events of the day and the week will be as brief as possible.

First up, the weekend's required reading is David Stockman's Abolish the FOMC, bring back the green eyeshades, in which the former Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan proposes an elegant yet simple solution to the current and ongoing tyranny of central bank incompetence.

In as few words as possible, Stockman proposes that the market set interest rates, pining for the halcyon days of true price discovery. The post is well worth twenty minutes of reading.

As for stocks, globally, the week was something of a disaster, with massive falls in Asia and Europe, though there was something of a rebound on Thursday. US indices struggled though the opacity of another FOMC policy decision (nothing) and fell into a funk on Thursday morning, with the Dow dipping below the magic 17,000 mark, but magically rallying for a noticeable gain for the day.

Friday was not so euphoric, with options expiration afoot (we suspect most of the big players cashed out on Thursday), though it was somewhat dramatic, as all three majors traded in the red the entire session. The Dow actually touched down just above 17,600, keeping the magical 500-point range (to 18,000 on the upside) intact for a thirteenth consecutive week.

This particular range-bound trading pattern does have a precedent, that being the 23-week span from February to early July of last year, when the blue chip index traded generally between 17,750 to 18,250, making an all-time high in the process (mid-May).

So, despite the two semi-corrections in August of 2015 and January of this year, the Dow has now settled into a regime just 250 points below the previous plateau. Welcome to the world of paper games.

Friday was simply get-away day, aided greatly by the NY Fed, which lowered its second and third quarter estimates for GDP growth to 2.1%, which is still probably too high. With that, unless the fourth quarter is gangbusters, along with the 0.7% rate of growth for GDP in the first quarter, it will be tough for GDP to hit the 2.0% target (that's a joke, right?) for this year.

Maybe the elections will trigger a change for 2017. Maybe not.

In any case, it's too far ahead to look. Brexit vote comes up Thursday, which could trigger fireworks, though some of the smart money is saying the vote will be for the UK to stay in the EU, and it will be rigged.

Happy hunting!

Friday's Fallout:
S&P 500: 2,071.22, -6.77 (0.33%)
Dow: 17,675.16, -57.94 (0.33%)
NASDAQ: 4,800.34, -44.58 (0.92%)

Crude Oil 48.07 +4.03% Gold 1,296.80 -0.12% EUR/USD 1.1279 +0.46% 10-Yr Bond 1.6180 +3.45% Corn 436.25 +2.59% Copper 2.05 +0.29% Silver 17.47 -0.78% Natural Gas 2.89 +1.16% Russell 2000 1,145.11 -0.27% VIX 19.28 -0.46% BATS 1000 20,677.17 0.00% GBP/USD 1.4355 +1.03% USD/JPY 104.2060 -0.10%

For the week:
Dow: -190.31, (-1.07%)
S&P 500: -24.85 (-1.19%)
NASDAQ: -94.21 (-1.92%)

Intervention By Any Other Name; Fed Agents Clearly Trading Equities, Slamming Gold And Silver

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%

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%

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%