Proof that I'm not a pessimist, but rather a realist, comes from The Conference Board's latest Consumer Confidence reading. As it turns out, pessimism may turn out to be a new national pastime if the 5000 households surveyed are any indication.
Check out these figures:
The overall index stands at 49.3 in June, down from 54.8. That number is much worse than it would appear on the surface. Consider that the index is calibrated to conform to a 1985 reading of 100. Well, life certainly wasn't perfect in 1985, so the index being more than halved in the subsequent 24 years means what? People are only half as satisfied or confident as they were then? In any case, it's not good.
Here's the really terrifying stuff. though. The percentage of people claiming that business conditions were "good" fell to 8.0%, from 8.8%. 8 percent! Now that's what I call pessimistic. There's more: People who thought jobs were plentiful: 4.7%; people who thought their incomes would increase in the next six months: 9.8%. Less than one in ten people expect a raise by December. That's pretty gloomy, no? Or maybe, just maybe, the people in this survey, which we assume is a nice cross-section of America, are not pessimists, but realists, who have seen the government's attempts at stimulus fall flat, who maybe don't believe all the lies from the controlled media, and who may have been around long enough and been through enough to lose faith in the federal government and its promises to fix everything.
America has always been an optimistic nation, but considering the current crop of politicians (largely failures) in the power structure of Washington, it is conceivable that many people have lost their patience and are losing faith in the "system," which is clearly broken and not about to be fixed by the people who broke it.
This is not to say that Americans are becoming pessimists, it's just saying that they're fed up with the status quo, and actually have been for quite some time. Americans may also be sending a message to Washington which goes something like this:
"We don't want more debt. We don't want a $1.75 trillion deficit. We want you (the government) to tighten your belts, cut spending and trim some of the fat. We are not on board with tax-and-spend, cap-and-trade, more expensive health care and the rest of your proposed plans for us. We are not standing with you, because you don't stand for us. If you continue, we shall stand against you."
That's pretty much it, isn't it? Americans are pretty tired of the US government, their state government and their local government sticking their noses into every last aspect of their lives and taxing them into oblivion. Nobody in Washington is currently listening to the American people and there's pretty good evidence that nobody's been listening for the past 10 years. Since they're not going to listen, then why pay them tribute? We owe them nothing. In fact, they owe us plenty.
Change will come, and mostly by the actions of government. Voting obviously hasn't made an impact, so the natural progression is for people to vote with their wallets and purses, and that's already occurring. Less and less revenue is flowing into government coffers and the flow will continue to slacken until it is just a trickle. This device, known as "starving the government" will produce change because the government will be unable to fund anything but the most rudimentary programs, and maybe not even those.
Americans, realists all, will not pay taxes and government will fall. That is our history, that is our right. The second American revolution has begun.
Noting that confidence is waning, Wall Streeters quickly abandoned their "window dressing" strategy in favor of a "jump ship" approach. After the Conference Board's report, stocks turned from narrowly positive to grossly negative in a hurry and stayed down for the remainder of the session. Coupled with yesterday's gains, the Dow is up a mind-boggling 8 points this week.
Dow 8,447.00, -82.38 (0.97%)
NASDAQ 1,835.04, -9.02 (0.49%)
S&P 500 919.33, -7.90 (0.85%)
NYSE Composite 5,905.14, -57.36 (0.96%)
Internals confirmed that the turnaround was no fluke. Declining issues outpaced advancers, 3653-2712. New lows surpassed new highs, breaking a three-day trend, 64-59. Volume was very light, as has been the case for most of the past month.
NYSE Volume 1,296,750,000
NASDAQ Volume 2,064,647,000
Like stocks, oil turned around on Tuesday, shedding $1.60, to close at $69.89. Gold also beat a steady retreat, losing $13.30, to $927.40. There was some dumping of silver as well, down 38 cents, to $13.60.
Americans are neither happy nor optimistic, a fairly obvious condition after being promised change but receiving more of the same. The time for real change has been at hand for some time. Whether Americans actually have the nerve and fortitude of their forefathers, only time will tell. Unheeded citizen complaints can only take one of two paths: reformation or tyranny.
Tuesday, June 30, 2009
Monday, June 29, 2009
Stocks Gain to Open Week; Madoff Gets 150 Years
The most significant news story of the day was the sentencing of serial Ponzi-schemer Bernard Madoff by US District Court judge Denny Chin, who figuratively "threw the book" at the convicted swindler, issuing the maximum sentence of 150 years in prison to the 71-year-old. Madoff will spend the rest of his life behind bars for masterminding the largest securities fraud in history.
Perhaps one of just a few bright lights from the unwinding of the US economy, Madoff may never had been discovered if not for the horrific losses taken by the market in the fall of 2008. It was amid crashing stocks that Madoff first admitted his guilt as he could no longer maintain that his investments were making profits.
Ads Madoff heads out of the spotlight and behind bars, it's worth noting that various frauds, scams and scandals come to light during serious market declines. If Madoff proves to be the worst of them, all well and good, but there was surely more than the solitary machinations of a singular evil genius at work within the latest market crash. The bodies are all now safely buried in the books of Citigroup, Goldman Sachs, JP Morgan, Bank of America, Wells Fargo and Morgan Stanley. The real crimes have been neatly swept under the rug by Treasury Secretary Geithner and Fed Chairman Barnanke.
The words "toxic assets" have been swiftly dispatched from the standard economics news lexicon; those have all been absorbed by the Federal Reserve for future disposal. Accounting rules have been changed to accommodate the bankers, as usual. The same kinds of things happened before and during the Great Depression. Incompetence and lack of foresight in allowing a speculative bubble to get out of hand were the causes then, as now, and there will likely be more scandal, finger-pointing, accusations, firings and eventually, prosecutions of those who undermined the core of our economy.
The economy has suffered severe damage, stocks are overpriced in an unsustainable trading range, but the word on the street is that the bad times are already behind us. We can almost hear Roosevelt's campaigners singing "Happy Days Are Here Again."
We so wish it were so, but evidence points in the opposite direction. While our maladies may not ever approach those of the Great Depression, by some standards they already are. True unemployment figures point to 18-20% currently, but what never gets reported and is at the root of our problem, is the black market or "underground" economy, which the government stopped trying to measure back in the 1970s. From pot dealing to off-the-books labor, this illicit economy grows daily, eroding the tax base along with our confidence in government institutions.
So broad, vast and rapacious are federal and state taxes that companies and individuals are nearly coerced into cheating if only to ensure their own survival. The costs of taxation on business are so odious today that there's actually a disincentive to entrepreneurism. Nobody wants a partner that takes but never contributes. Still, people make money without paying taxes, and that's what - besides the incredible amount in aid to states - is really keeping the economy from going bust. There's a lot of money around, and nobody's starving or freezing yet. Let's hope it stays that way.
Dow 8,529.38, +90.99 (1.08%)
NASDAQ 1,844.06, +5.84 (0.32%)
S&P 500 927.23, +8.33 (0.91%)
NYSE Composite 5,962.50, +55.54 (0.94%)
As market participants apparently had cash on hand and nothing better to do with it, they bid up stocks early in the day and traded sideways after 10:00 in the AM. As well as the final numbers look, the internals were conforming but far from encouraging. Advancing issues beat back decliners by a modest margin, 3540-2858. New highs surpassed new lows, 88-52, but volume was the most tepid in some time, somewhat expected in this shortened holiday week.
NYSE Volume 1,065,345,000
NASDAQ Volume 2,021,623,000
Oil shot up $2.33, to $71.49, as Nigerian rebels attacked an offshore oil rig and China announced it would add to its strategic reserves. Gold finished the day down 30 cents, at $940.70. Silver dropped 18 cents, to end the day at $13.98.
Again, there was little in the way of corporate or economic news. It looks like another slow trading week ahead.
Perhaps one of just a few bright lights from the unwinding of the US economy, Madoff may never had been discovered if not for the horrific losses taken by the market in the fall of 2008. It was amid crashing stocks that Madoff first admitted his guilt as he could no longer maintain that his investments were making profits.
Ads Madoff heads out of the spotlight and behind bars, it's worth noting that various frauds, scams and scandals come to light during serious market declines. If Madoff proves to be the worst of them, all well and good, but there was surely more than the solitary machinations of a singular evil genius at work within the latest market crash. The bodies are all now safely buried in the books of Citigroup, Goldman Sachs, JP Morgan, Bank of America, Wells Fargo and Morgan Stanley. The real crimes have been neatly swept under the rug by Treasury Secretary Geithner and Fed Chairman Barnanke.
The words "toxic assets" have been swiftly dispatched from the standard economics news lexicon; those have all been absorbed by the Federal Reserve for future disposal. Accounting rules have been changed to accommodate the bankers, as usual. The same kinds of things happened before and during the Great Depression. Incompetence and lack of foresight in allowing a speculative bubble to get out of hand were the causes then, as now, and there will likely be more scandal, finger-pointing, accusations, firings and eventually, prosecutions of those who undermined the core of our economy.
The economy has suffered severe damage, stocks are overpriced in an unsustainable trading range, but the word on the street is that the bad times are already behind us. We can almost hear Roosevelt's campaigners singing "Happy Days Are Here Again."
We so wish it were so, but evidence points in the opposite direction. While our maladies may not ever approach those of the Great Depression, by some standards they already are. True unemployment figures point to 18-20% currently, but what never gets reported and is at the root of our problem, is the black market or "underground" economy, which the government stopped trying to measure back in the 1970s. From pot dealing to off-the-books labor, this illicit economy grows daily, eroding the tax base along with our confidence in government institutions.
So broad, vast and rapacious are federal and state taxes that companies and individuals are nearly coerced into cheating if only to ensure their own survival. The costs of taxation on business are so odious today that there's actually a disincentive to entrepreneurism. Nobody wants a partner that takes but never contributes. Still, people make money without paying taxes, and that's what - besides the incredible amount in aid to states - is really keeping the economy from going bust. There's a lot of money around, and nobody's starving or freezing yet. Let's hope it stays that way.
Dow 8,529.38, +90.99 (1.08%)
NASDAQ 1,844.06, +5.84 (0.32%)
S&P 500 927.23, +8.33 (0.91%)
NYSE Composite 5,962.50, +55.54 (0.94%)
As market participants apparently had cash on hand and nothing better to do with it, they bid up stocks early in the day and traded sideways after 10:00 in the AM. As well as the final numbers look, the internals were conforming but far from encouraging. Advancing issues beat back decliners by a modest margin, 3540-2858. New highs surpassed new lows, 88-52, but volume was the most tepid in some time, somewhat expected in this shortened holiday week.
NYSE Volume 1,065,345,000
NASDAQ Volume 2,021,623,000
Oil shot up $2.33, to $71.49, as Nigerian rebels attacked an offshore oil rig and China announced it would add to its strategic reserves. Gold finished the day down 30 cents, at $940.70. Silver dropped 18 cents, to end the day at $13.98.
Again, there was little in the way of corporate or economic news. It looks like another slow trading week ahead.
Friday, June 26, 2009
Stocks End Week Quietly Mixed
Stocks suffered through another listless session, though on much higher volume, finishing the day and the week in the red on all major indices excepting the NASDAQ which finished above the break even line both on the daily and weekly measure.
It was the second straight week that the market had closed lower, though the extent of the losses were marginalized by Thursday's strong showing.
The weekly figures are: Dow, -101 points; NASDAQ, +11; S&P 500, -2; NYSE Comp., -27.
Dow 8,438.39, -34.01 (0.40%)
NASDAQ 1,838.22, +8.68 (0.47%)
S&P 500 918.90, -1.36 (0.15%)
NYSE Composite 5,906.96, -4.07 (0.07%)
Advancers continued their trend of dominating the losing issues, 3961-2356. New highs beat out new lows for the second straight session, 129-58. That is the largest number of new highs on any single day since the middle of 2007, just about two years ago. Those new high-new low numbers are a little difficult to believe, especially since the Dow stood above 11,300 at this time a year ago.
As mentioned above, the volume numbers were rather outsized as compared to recent days. That level of volume could mean that funds are doing some early window dressing (or house cleaning) as the quarter - and the month - comes near a close. Tuesday will be the final trading day for June and the 2nd quarter. Nearly half of Friday's volume came in the final minutes of trading, making the numbers all the more suspicious.
NYSE Volume 2,310,427,000
NASDAQ Volume 3,659,184,000
Oil took a breather, losing $1.07, to $69.16. Gold continued to trend slowly higher, gaining $1.50, to $941.00. Silver tacked on 12 cents to close at $14.16.
Following Thursday's powerful move, Friday's action has to be considered a complete flop. There simply was no continuation of the rally, not surprising in this environment. That late day volume spike is strange, though and may have been a rebalancing by index funds or something to do with Cisco and the Travelers being added to the Dow, but it is probably something more nefarious than that.
Investors are still a little bit rattled and unsure, as there have been an equal number of encouraging and discouraging sings in economic data of late. Next week may well be more of the same slow pace, especially leading up to the Independence Day Holiday, with all exchanges closed on Friday, July 3.
It was the second straight week that the market had closed lower, though the extent of the losses were marginalized by Thursday's strong showing.
The weekly figures are: Dow, -101 points; NASDAQ, +11; S&P 500, -2; NYSE Comp., -27.
Dow 8,438.39, -34.01 (0.40%)
NASDAQ 1,838.22, +8.68 (0.47%)
S&P 500 918.90, -1.36 (0.15%)
NYSE Composite 5,906.96, -4.07 (0.07%)
Advancers continued their trend of dominating the losing issues, 3961-2356. New highs beat out new lows for the second straight session, 129-58. That is the largest number of new highs on any single day since the middle of 2007, just about two years ago. Those new high-new low numbers are a little difficult to believe, especially since the Dow stood above 11,300 at this time a year ago.
As mentioned above, the volume numbers were rather outsized as compared to recent days. That level of volume could mean that funds are doing some early window dressing (or house cleaning) as the quarter - and the month - comes near a close. Tuesday will be the final trading day for June and the 2nd quarter. Nearly half of Friday's volume came in the final minutes of trading, making the numbers all the more suspicious.
NYSE Volume 2,310,427,000
NASDAQ Volume 3,659,184,000
Oil took a breather, losing $1.07, to $69.16. Gold continued to trend slowly higher, gaining $1.50, to $941.00. Silver tacked on 12 cents to close at $14.16.
Following Thursday's powerful move, Friday's action has to be considered a complete flop. There simply was no continuation of the rally, not surprising in this environment. That late day volume spike is strange, though and may have been a rebalancing by index funds or something to do with Cisco and the Travelers being added to the Dow, but it is probably something more nefarious than that.
Investors are still a little bit rattled and unsure, as there have been an equal number of encouraging and discouraging sings in economic data of late. Next week may well be more of the same slow pace, especially leading up to the Independence Day Holiday, with all exchanges closed on Friday, July 3.
Thursday, June 25, 2009
Stocks Unexpectedly Higher on Short Covering
Somebody pulled the "buy" switch on Wall Street, or, perhaps more to the point, shorts got caught with their pants down, as stocks staged the strongest rally since June 1, with the Dow up 172 points and the other major indices tagging along with similarly-sized gains.
There was no real news to serve as a catalyst, though after taking losses over the past two weeks, investors may have been looking for bargains and their buying may have initiated a temporary short squeeze, as just about everybody on the planet is aware of the topping out which occurred the second week of June.
Dow 8,472.40, +172.54 (2.08%)
NASDAQ 1,829.54, +37.20 (2.08%)
S&P 500 920.26, +19.32 (2.14%)
NYSE Composite 5,911.03, +115.31 (1.99%)
Advancing issues finished well ahead of decliners, 5191-1273, and new highs took a slim edge over new lows, 61-60, ending a nine-day run in which lows led. Volume was only marginally higher than in recent sessions, another hint that the move could have been based on a short squeeze.
NYSE Volume 1,177,536,000
NASDAQ Volume 2,247,375,000
Crude oil was up $1.56, to $70.23. Gold was also up $5.10, to $939.50. Silver added 9 cents, closing at $14.03.
Thursday's action certainly looks like the garden variety snap-back rally made on the backs of short-sellers, who must be in abundance at this juncture. It will be interesting to see whether the rally has any legs as the week comes to an end.
There was no real news to serve as a catalyst, though after taking losses over the past two weeks, investors may have been looking for bargains and their buying may have initiated a temporary short squeeze, as just about everybody on the planet is aware of the topping out which occurred the second week of June.
Dow 8,472.40, +172.54 (2.08%)
NASDAQ 1,829.54, +37.20 (2.08%)
S&P 500 920.26, +19.32 (2.14%)
NYSE Composite 5,911.03, +115.31 (1.99%)
Advancing issues finished well ahead of decliners, 5191-1273, and new highs took a slim edge over new lows, 61-60, ending a nine-day run in which lows led. Volume was only marginally higher than in recent sessions, another hint that the move could have been based on a short squeeze.
NYSE Volume 1,177,536,000
NASDAQ Volume 2,247,375,000
Crude oil was up $1.56, to $70.23. Gold was also up $5.10, to $939.50. Silver added 9 cents, closing at $14.03.
Thursday's action certainly looks like the garden variety snap-back rally made on the backs of short-sellers, who must be in abundance at this juncture. It will be interesting to see whether the rally has any legs as the week comes to an end.
Wednesday, June 24, 2009
Fed Comments Don't Help
As expected, the FOMC of the Federal Reserve left interest rates alone, but, in the press release accompanying the non-event said that economic conditions had improved slightly since April, though the Fed's policy statement was peppered with pejoratives and qualifiers, lending to an overall uneasy feeling on Wall Street.
Possibly the most annoying part of the release was the comment on commodities and inflation: "The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time."
At least the Fed is being honest about future prospects, but, on Wall Street as well as on Main Street, no inflation means no or a slow recovery. Collapsing pricing power means that business will have to deal with margins as they are, or lower, and sales volume also at or close to current levels. Overall, it's a picture of stagnation, though not as bad as conditions might have been six months ago.
After the 2:15 announcement, stocks gyrated in both directions briefly before taking a slight nose-dive. Especially hard hit was the Dow, which had been sporting solid gains, but ended up as the only major index in the red. All of the other indices finished the session off their highs, though only marginally.
What did boost the market was the positive reading on durable goods orders, which spiked to a gain of 1.8% in May, the second straight gain of that size, lending some credence to the bottom of the recession having already passed. Naturally, there are skeptics still, and even more who wonder whether the gains of recent months hadn't already priced in such positive developments. After watching the economy write while the market soared, investors may be facing a complete reversal of fortune: watching stocks slip as the economy actually improves.
Dow 8,299.86, -23.05 (0.28%)
NASDAQ 1,792.34. +27.42 (1.55%)
S&P 500 900.94, +5.84 (0.65%)
NYSE Composite 5,795.72, +36.23 (0.63%)
Advancing issues far outpaced decliners, 4251-2184, but new lows finished ahead of new highs for the ninth straight session, 67-50. Volume was roughly the same as yesterday, due primarily to the Fed announcement. Without that catalyst, it would have been one of the slowest sessions of the year.
NYSE Volume 1,101,553,000
NASDAQ Volume 2,171,782,000
Crude oil slipped on gasoline supply data, down 57 cents, to $68.67, a positive sign for motorists, as gas prices are almost certain to decline after the July 4 weekend. Gold posted a gain of $10.10, to $934.40. Silver added 7 cents, closing at $13.94 the ounce. The metals remain in no-man's land, stuck between interim lows and all-time highs reached last year. There's some doubt about gold and silver entering the picture of late. Failing to retest the highs may signal a breakdown and turn from the 7-year bull market. If that's the case, it presents an incredible buying opportunity, as the price of both gold and silver should rise significantly once the world economies are back on track.
When that is going to happen, however, is anybody's guess. Even the Fed is now couching its comments, and if they don't know, who does? Best guess at this point is that recovery occurs some time next year, but is relatively weak. GDP growth may not exceed 3% until late 2011 or later.
Possibly the most annoying part of the release was the comment on commodities and inflation: "The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time."
At least the Fed is being honest about future prospects, but, on Wall Street as well as on Main Street, no inflation means no or a slow recovery. Collapsing pricing power means that business will have to deal with margins as they are, or lower, and sales volume also at or close to current levels. Overall, it's a picture of stagnation, though not as bad as conditions might have been six months ago.
After the 2:15 announcement, stocks gyrated in both directions briefly before taking a slight nose-dive. Especially hard hit was the Dow, which had been sporting solid gains, but ended up as the only major index in the red. All of the other indices finished the session off their highs, though only marginally.
What did boost the market was the positive reading on durable goods orders, which spiked to a gain of 1.8% in May, the second straight gain of that size, lending some credence to the bottom of the recession having already passed. Naturally, there are skeptics still, and even more who wonder whether the gains of recent months hadn't already priced in such positive developments. After watching the economy write while the market soared, investors may be facing a complete reversal of fortune: watching stocks slip as the economy actually improves.
Dow 8,299.86, -23.05 (0.28%)
NASDAQ 1,792.34. +27.42 (1.55%)
S&P 500 900.94, +5.84 (0.65%)
NYSE Composite 5,795.72, +36.23 (0.63%)
Advancing issues far outpaced decliners, 4251-2184, but new lows finished ahead of new highs for the ninth straight session, 67-50. Volume was roughly the same as yesterday, due primarily to the Fed announcement. Without that catalyst, it would have been one of the slowest sessions of the year.
NYSE Volume 1,101,553,000
NASDAQ Volume 2,171,782,000
Crude oil slipped on gasoline supply data, down 57 cents, to $68.67, a positive sign for motorists, as gas prices are almost certain to decline after the July 4 weekend. Gold posted a gain of $10.10, to $934.40. Silver added 7 cents, closing at $13.94 the ounce. The metals remain in no-man's land, stuck between interim lows and all-time highs reached last year. There's some doubt about gold and silver entering the picture of late. Failing to retest the highs may signal a breakdown and turn from the 7-year bull market. If that's the case, it presents an incredible buying opportunity, as the price of both gold and silver should rise significantly once the world economies are back on track.
When that is going to happen, however, is anybody's guess. Even the Fed is now couching its comments, and if they don't know, who does? Best guess at this point is that recovery occurs some time next year, but is relatively weak. GDP growth may not exceed 3% until late 2011 or later.
Subscribe to:
Posts (Atom)
Posts
