It helps to be an insider on Wall Street if you expect to make big money.
Just as a for instance, take the trade in gold today prior to the Fed releasing the FOMC minutes from July at 2:00 pm ET.
At 8:00 am ET, gold was sitting right around $1270 per troy ounce. Six hours later, prior to the release of the FOMC minutes, it was at $1280 or above.
If one was so inclined, one could have placed a futures bid at 8:00 am and sold it at 2:00 pm, for a profit of $10 per troy ounce. Since futures are dealt with in lots of 100s, one would have had to made the order for 100 futures contracts. It would have cost a fraction of the actual value of the gold involved, but, upon selling, the profits would have netted somewhere in the neighborhood of $10,000, less commissions, which, as an insider, would be minimal.
Also, as an insider, one could probably have bought the futures via a margin account, thus putting up even less actual money.
Nice way to make a living, you say?
Well, if the Fed is nothing more than a stealth conduit for the wealthy and well-connected, it would surprise nobody if the contents of the FOMC minutes were leaked or casually mentioned in private conversation.
That's how corrupted markets work, and there's nothing more corrupted than the gold and silver futures markets, except maybe, the US equity markets.
What was discovered - among many views and opinions - in the FOMC minutes was that various members expressed a need to tighten policy, in other words, raise rates and/or roll off some of the excessive assets held by the Federal Reserve.
Roughly the same trade could have been made in various commodities, especially by being on the short side in WTI crude oil futures, or stocks, or by going long bonds. The Dow was up 87 points early in the day before reversing - well before the FOMC minutes release - finally closing just short of 26 points to the upside.
It is a nice way to make a living, especially when one has friends in high places.
At the Close, Wednesday, August 16, 2017:
Dow: 22,024.87, +25.88 (+0.12%)
NASDAQ 6,345.11, +12.10 (+0.19%)
S&P 500 2,468.11, +3.50 (+0.14%)
NYSE Composite: 11,865.33, +21.85 (+0.18%)
Wednesday, August 16, 2017
Tuesday, August 15, 2017
Back to the Grind for Wall Street
All the blustering over nuclear war over, now replaced with frantic screaming about neo-Nazi and White Supremacy groups (what kind of media is this?) after demonstrations and bloodshed in Charlottesville over the weekend, Wall Street didn't seem to interested in anything in a typical mid-summer session.
Stocks kind of straddled the unchanged line, and the usual unusual of indices pointing in opposite directions was the result of a lackluster day of trading paper.
The only significant news was from retail, if it can be believed, as July retail sales showed a 0.6% improvement, mostly due to incentives on new car sales and leases.
It wasn't enough to send buyers into a panic of shopping for downtrodden mall rentiers, since everybody already knows that the half-life of most retailers is very short, due to the general slack demand in the economy and the Amazon effect of hovering up all latent shoppers to the internet.
So, since Americans killing other Americans is not apparently as sexy as Americans killing North Koreans, or vice-versa, not much on the rally front today.
At the Close, Tuesday, August 15, 2017:
Dow: 21,998.99, +5.28 (0.02%)
NASDAQ: 6,333.01, -7.22 (-0.11%)
S&P 500: 2,464.61, -1.23 (-0.05%)
NYSE Composite: 11,843.48, -12.58 (-0.11%)
Stocks kind of straddled the unchanged line, and the usual unusual of indices pointing in opposite directions was the result of a lackluster day of trading paper.
The only significant news was from retail, if it can be believed, as July retail sales showed a 0.6% improvement, mostly due to incentives on new car sales and leases.
It wasn't enough to send buyers into a panic of shopping for downtrodden mall rentiers, since everybody already knows that the half-life of most retailers is very short, due to the general slack demand in the economy and the Amazon effect of hovering up all latent shoppers to the internet.
So, since Americans killing other Americans is not apparently as sexy as Americans killing North Koreans, or vice-versa, not much on the rally front today.
At the Close, Tuesday, August 15, 2017:
Dow: 21,998.99, +5.28 (0.02%)
NASDAQ: 6,333.01, -7.22 (-0.11%)
S&P 500: 2,464.61, -1.23 (-0.05%)
NYSE Composite: 11,843.48, -12.58 (-0.11%)
War Talk Fading, Markets Rallying
As the sun breaks above the horizon in the Eastern US, it's becoming readily apparent that the recent war of words and threats between North Korea's Kim Jong-un and US President Trump were nothing more than well-orchestrated (either intended by the principals or promoted by the deep state) banter designed to allow release of a pressure point in the markets.
In other words, stocks were completely overpriced and the rally exhausted, so a selling excuse was necessary.
Nothing like the threat of a thermo-nuclear holocaust to clear the books.
With the main protagonists backing off their bellicose behavior, stocks rallied sharply on Monday and are prepared for another moon shot Tuesday.
Just in case one is unconvinced of the machinations of the deep state and international financiers, be reminded that markets worldwide - and not just equities - have been under the various thumbs of central bankers since the GFC of 2008-09.
As has been pointed out here more than a few times, nothing is as it seems. While the appearance of a roaring stock market is a great image to project, in all likelihood, that's all it is, an image. Thus, just about everything related to the mirage of a booming economy must be held in contempt as false.
Piling falsehood upon falsehood is not a great practice in the long run. It produces a massive complex of overlapping lies, or, as Sir Walter Scott wrote in the 19th century poem, Marmion :
Nowhere in finance nor politics is more than a shred of honesty to be observed or heard.
The choices are simple: play along, play outside, or be played, but beware that there are no moral underpinnings in money or politics. That's been true for longer than anyone can remember.
Sadly, it remains the same today.
At the Close, 8/14/17:
Dow: 21,993.71, +135.39 (0.62%)
NASDAQ: 6,340.23, +83.68 (1.34%)
S&P 500: 2,465.84 +24.52 (1.00%)
NYSE Composite: 11,856.06, +92.85 (0.79%)
In other words, stocks were completely overpriced and the rally exhausted, so a selling excuse was necessary.
Nothing like the threat of a thermo-nuclear holocaust to clear the books.
With the main protagonists backing off their bellicose behavior, stocks rallied sharply on Monday and are prepared for another moon shot Tuesday.
Just in case one is unconvinced of the machinations of the deep state and international financiers, be reminded that markets worldwide - and not just equities - have been under the various thumbs of central bankers since the GFC of 2008-09.
As has been pointed out here more than a few times, nothing is as it seems. While the appearance of a roaring stock market is a great image to project, in all likelihood, that's all it is, an image. Thus, just about everything related to the mirage of a booming economy must be held in contempt as false.
Piling falsehood upon falsehood is not a great practice in the long run. It produces a massive complex of overlapping lies, or, as Sir Walter Scott wrote in the 19th century poem, Marmion :
Oh, what a tangled web we weave...when first we practice to deceive.There is truth in life and in nature.
Nowhere in finance nor politics is more than a shred of honesty to be observed or heard.
The choices are simple: play along, play outside, or be played, but beware that there are no moral underpinnings in money or politics. That's been true for longer than anyone can remember.
Sadly, it remains the same today.
At the Close, 8/14/17:
Dow: 21,993.71, +135.39 (0.62%)
NASDAQ: 6,340.23, +83.68 (1.34%)
S&P 500: 2,465.84 +24.52 (1.00%)
NYSE Composite: 11,856.06, +92.85 (0.79%)
Saturday, August 12, 2017
Much Ado About Nothing As War Rhetoric Fades
Could anything less have been expected?
Since we have fake news, fake boobs, fake money, fake legislators making fake laws, and fake outrage, why not have a fake war?
North Korea's Kim Jong-un recent bombast directed at the United States was remarkable only in the way world markets reacted to it. The tin-horn, third world dictator has been test-firing missiles and boasting about bringing Western civilization to its knees for months, but only this week did his war-mongering behavior result in stock market losses, which, in the grand scheme of things, were minor.
While vacationing President Donald Trump made headlines with his responses, the markets did an abrupt about-face midweek, ending a streak of ten straight positive closes on the Dow Tuesday with a small skid to the red, followed Wednesday by a more broad decline and Thursday with a cascading sell-off, which sent the major indices down the most in three months or longer.
The Dow didn't suffer much damage, though it was the worst week in the past 12, but the narrow, 30-stock Dow Industrials are still up almost 10% on the year. Where the impact was greatest was on the broader measures, specifically, the NYSE Composite, which fell nearly two percent. By comparison, the Dow was off just more than one percent for the week.
With the finger-pointing and threatening behavior by various world leaders dropping off to background noise as the weekend approached, stocks in the US rebounded slightly, as expected, since few astute geo-political minds actually believe we're anywhere closer to war with North Korea than we have been for the past sixty years.
Thus, it is likely to be back to business as usual for the markets on Monday, though one side effect during the recent tantrum has been the rise of gold and silver as safety bets and the fall of the price of oil, as the global glut continues. Gold reached its highest point since June, closing out the week about ten dollars below $1300. Silver managed to stay above $17 for the first time in two months, but crude oil ended below $49 per barrel, a price seen by many as still too high considering the global oversupply.
At the Close, 8/11/17:
Dow: 21,858.32, +14.31 (0.07%)
NASDAQ: 6,256.56, +39.68 (0.64%)
S&P 500: 2,441.32, +3.11 (0.13%)
NYSE Composite: 11,763.21, -8.39 (-0.07%)
For the Week:
Dow: -234.49 (-1.06%)
NASDAQ: -95.01 (-1.50%)
S&P 500: -35.51 (-1.43%)
NYSE Composite: -221.68 (-1.85%)
Since we have fake news, fake boobs, fake money, fake legislators making fake laws, and fake outrage, why not have a fake war?
North Korea's Kim Jong-un recent bombast directed at the United States was remarkable only in the way world markets reacted to it. The tin-horn, third world dictator has been test-firing missiles and boasting about bringing Western civilization to its knees for months, but only this week did his war-mongering behavior result in stock market losses, which, in the grand scheme of things, were minor.
While vacationing President Donald Trump made headlines with his responses, the markets did an abrupt about-face midweek, ending a streak of ten straight positive closes on the Dow Tuesday with a small skid to the red, followed Wednesday by a more broad decline and Thursday with a cascading sell-off, which sent the major indices down the most in three months or longer.
The Dow didn't suffer much damage, though it was the worst week in the past 12, but the narrow, 30-stock Dow Industrials are still up almost 10% on the year. Where the impact was greatest was on the broader measures, specifically, the NYSE Composite, which fell nearly two percent. By comparison, the Dow was off just more than one percent for the week.
With the finger-pointing and threatening behavior by various world leaders dropping off to background noise as the weekend approached, stocks in the US rebounded slightly, as expected, since few astute geo-political minds actually believe we're anywhere closer to war with North Korea than we have been for the past sixty years.
Thus, it is likely to be back to business as usual for the markets on Monday, though one side effect during the recent tantrum has been the rise of gold and silver as safety bets and the fall of the price of oil, as the global glut continues. Gold reached its highest point since June, closing out the week about ten dollars below $1300. Silver managed to stay above $17 for the first time in two months, but crude oil ended below $49 per barrel, a price seen by many as still too high considering the global oversupply.
At the Close, 8/11/17:
Dow: 21,858.32, +14.31 (0.07%)
NASDAQ: 6,256.56, +39.68 (0.64%)
S&P 500: 2,441.32, +3.11 (0.13%)
NYSE Composite: 11,763.21, -8.39 (-0.07%)
For the Week:
Dow: -234.49 (-1.06%)
NASDAQ: -95.01 (-1.50%)
S&P 500: -35.51 (-1.43%)
NYSE Composite: -221.68 (-1.85%)
Friday, August 11, 2017
Stocks Extend Slide Amid Noth Korea, US Bombast, But It's Not Serious
Just in case there needs to be an excuse to sell overpriced stocks, there's always North Korea and the nit-wit leader Kim Jong-un.
A bone fide nutjob, the second child of Kim Jong-il, 33-year-old Jong-un has, in his brief stint as self-appointed supreme leader of North Korea, managed to elevate himself and his gulag of a nation onto the global stage and capture the spotlight with various treats, missile launches, nuclear ambitions and plenty of help from international media seeking sensationalism with which to scare an unsuspecting public.
With bombastic President Trump entering the fray earlier this year, Jong-un has found the perfect Dean Martin straight man for his Jerry Lewis-like antics. A master of the tweet-storm, Trump takes Jong-un seriously, which helps amp up the rhetoric with bold statements and unveiled threats in response to Jong-un's madness. The two could make a fortune on the stages of Las Vegas, if only the State Department would allow Jong-un entry to the US mainland.
What the international war of words has to do with stocks is roughly nothing. Until actual bombs start raining down, the prattling between the leaders of the United States and North Korea is more about television and radio ratings than the prices of Apple, Alphabet, or Alcoa.
However, as stated at the top of this missive, Wall Street specialists are taking the opportunity to dump out of high-flying stocks with near-reckless abandon, sending the major indices to their biggest losses in six months on Thursday, extending the minor losses from Wednesday into something worth noticing.
The selling has also not been limited to just US stocks. As the talk has become more bellicose, the drops on major foreign markets in Europe, Asia, and the Americas have been extended. As of Friday morning in the US, most of Asia and Europe are suffering losses of between one and two percent, though the Nikkei 225 is bucking the trend, down only slightly, nearly flat on the day.
That brings up an interesting topic: if Japan's major market isn't taking this "international nuclear stand-off" with the requisite seriousness, should anybody else?
Probably not, but, this is as good a time as any to take profits. The congress and the president are pretty much on vacation until after Labor Day, but, when they get back to pretending they're doing something constructive, they'll be tackling the ticklish issues of the debt ceiling (along with the attendant threats of shutting down the government - yeah!) and coming up with something resembling a federal budget.
On the latter, hashing out a budget between the Trump administration and the overwhelmingly free-spending congress ought to be some serious comedy. Trump would love to balance the federal budget, but congress intends to drown the nation in even more debt. In case anybody is still keeping score, the federal debt burden stands at close to $20 billion, but, according to the US Debt Clock, it's been stuck there for a few months due to extraordinary measures taken by Treasury and some unforeseen savings on the administration's end.
The congress is not happy about this and will make sure to pile up more debt in the months ahead, making the budget process the go-to, must see entertainment venue for the fall TV season.
So, unless the bottom falls out of the market on Friday, August 11, this is nothing more than profit-taking by people who actually know what they're doing and don't respond in knee-jerk fashion to the pronouncements of madmen and the tweets of presidents.
Meantime, the recent news frame has been good for bonds, gold and silver, all of which have had three straight sessions of unimpeded gains. Gold is approaching $1300 an ounce, the 10-year note is yielding 2.21% and silver broke through $17 per ounce on Thursday. What is not working, still, is oil, which appears unable to pierce the $50/barrel level, which shouldn't be an issue. There remains a massive glut, oversupply, slack demand due to slow economic growth globally and no pricing power anywhere from Riyadh to Russia. Oil should be less than $40 per barrel, though resistance is great, led by the global energy cartel with the help from central bankers who simply cannot stomach any more deflation in anything.
With that, stocks in the US are setting up for another scary open to the downside, but it's probably nothing more than a bump in the road. The real action is still a month away, and even then, the Fed has Wall Street's back. Unless something really serious occurs, there's likely not to be any major turn in the stock markets, though the same cannot be assumed about commodities, bonds, precious metals, or even crypto-currencies like Bitcoin.
At the Close, 8/10/17:
Dow: 21,844.01, -204.69 (-0.93%)
NASDAQ: 6,216.87, -135.46 (-2.13%)
S&P 500: 2,438.21, -35.81 (-1.45%)
NYSE Composite: 11,771.60, -157.87 (-1.32%)
A bone fide nutjob, the second child of Kim Jong-il, 33-year-old Jong-un has, in his brief stint as self-appointed supreme leader of North Korea, managed to elevate himself and his gulag of a nation onto the global stage and capture the spotlight with various treats, missile launches, nuclear ambitions and plenty of help from international media seeking sensationalism with which to scare an unsuspecting public.
With bombastic President Trump entering the fray earlier this year, Jong-un has found the perfect Dean Martin straight man for his Jerry Lewis-like antics. A master of the tweet-storm, Trump takes Jong-un seriously, which helps amp up the rhetoric with bold statements and unveiled threats in response to Jong-un's madness. The two could make a fortune on the stages of Las Vegas, if only the State Department would allow Jong-un entry to the US mainland.
What the international war of words has to do with stocks is roughly nothing. Until actual bombs start raining down, the prattling between the leaders of the United States and North Korea is more about television and radio ratings than the prices of Apple, Alphabet, or Alcoa.
However, as stated at the top of this missive, Wall Street specialists are taking the opportunity to dump out of high-flying stocks with near-reckless abandon, sending the major indices to their biggest losses in six months on Thursday, extending the minor losses from Wednesday into something worth noticing.
The selling has also not been limited to just US stocks. As the talk has become more bellicose, the drops on major foreign markets in Europe, Asia, and the Americas have been extended. As of Friday morning in the US, most of Asia and Europe are suffering losses of between one and two percent, though the Nikkei 225 is bucking the trend, down only slightly, nearly flat on the day.
That brings up an interesting topic: if Japan's major market isn't taking this "international nuclear stand-off" with the requisite seriousness, should anybody else?
Probably not, but, this is as good a time as any to take profits. The congress and the president are pretty much on vacation until after Labor Day, but, when they get back to pretending they're doing something constructive, they'll be tackling the ticklish issues of the debt ceiling (along with the attendant threats of shutting down the government - yeah!) and coming up with something resembling a federal budget.
On the latter, hashing out a budget between the Trump administration and the overwhelmingly free-spending congress ought to be some serious comedy. Trump would love to balance the federal budget, but congress intends to drown the nation in even more debt. In case anybody is still keeping score, the federal debt burden stands at close to $20 billion, but, according to the US Debt Clock, it's been stuck there for a few months due to extraordinary measures taken by Treasury and some unforeseen savings on the administration's end.
The congress is not happy about this and will make sure to pile up more debt in the months ahead, making the budget process the go-to, must see entertainment venue for the fall TV season.
So, unless the bottom falls out of the market on Friday, August 11, this is nothing more than profit-taking by people who actually know what they're doing and don't respond in knee-jerk fashion to the pronouncements of madmen and the tweets of presidents.
Meantime, the recent news frame has been good for bonds, gold and silver, all of which have had three straight sessions of unimpeded gains. Gold is approaching $1300 an ounce, the 10-year note is yielding 2.21% and silver broke through $17 per ounce on Thursday. What is not working, still, is oil, which appears unable to pierce the $50/barrel level, which shouldn't be an issue. There remains a massive glut, oversupply, slack demand due to slow economic growth globally and no pricing power anywhere from Riyadh to Russia. Oil should be less than $40 per barrel, though resistance is great, led by the global energy cartel with the help from central bankers who simply cannot stomach any more deflation in anything.
With that, stocks in the US are setting up for another scary open to the downside, but it's probably nothing more than a bump in the road. The real action is still a month away, and even then, the Fed has Wall Street's back. Unless something really serious occurs, there's likely not to be any major turn in the stock markets, though the same cannot be assumed about commodities, bonds, precious metals, or even crypto-currencies like Bitcoin.
At the Close, 8/10/17:
Dow: 21,844.01, -204.69 (-0.93%)
NASDAQ: 6,216.87, -135.46 (-2.13%)
S&P 500: 2,438.21, -35.81 (-1.45%)
NYSE Composite: 11,771.60, -157.87 (-1.32%)
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