With the Release of the Apple Watch, Have We Reached a Peak in Stocks and Stupidity?

Well, now, really, we all know the answer to the question posed in the headline, don't we?

Stocks are reaching extreme valuations, and, since the old adage, buy low, sell high always and everywhere prevails, right now might seem like as good a time as any to get the heck out of Dodge and cash in some of those high-fliers, if, that is, you still play the iStocks game on your iMac or iPhone.

Gold Apple watch $10,000 retail

Even id stocks have not reached their peaks, it's simple math and history to know that they will, at some point, and the downtrend will likely be abrupt. Or, the major indices could just meander along in a narrow downward channel over an extended period, like we had in 2000-2001, until the World Trade Center was blown up and collapsed. That's what most around at the time consider a market bottoming event, so, one does not want to be heavily invested when some kind of calamity shuts down the exchanges for a few days, or a week, or longer.

Besides trading at somewhat lofty valuations, stocks have also been trading on extremely thin volume for quite some time (this being the sixth anniversary of the 2009 bottom, that would be six years), which is also, generally speaking, a negative signal, though the pumpers at the Fed and central banks around the world have done a bang-up, jolly good job of keeping prices elevated while entire national economies are collapsing.

Some say that the markets reached a climax with the IPO of Alibaba (BABA), a dubious claim and an even more dubious event, now that allegations and proof has emerged that BABA's books were cooked by phony sales and the entirety of their public offering turned out to be nothing but a cash-out for Jack Ma and some of the top executives. We will never learn.

But, maybe it's not too late. Apple (AAPL) just had their big, big product roll-out of the new Apple Watch, an unwelcome and unnecessary accessory to the entire universe of iJunk gadgets floating around, and, beyond the watch's 18-hour battery life (huh? it's a watch, and as far as anyone can tell, there are still 24 hours in a day), price ($349 and up, all the way to the gold-plated $10,000 unit), and general uselessness, the Apple Watch may be just the ticket to grab on your way out of the Wall Street casino.

The Apple Watch does everything your iPhone does, except smaller, and you have to wear it, as a sign that you are a useless moron with excessive amounts of cash on hand with which you know not what to do, much like the major corporations in America, buying back their own stock at nose-bleed prices.

On the day, Apple's stock traded up to 129.57 (buy the rumor) prior to the release event, then fell as low as 125.06 (sell the news) as CEO Tim Cook showed off his company's latest gadget. To be fair, people are not impressed. The stock closed at 127.08, up "officially" 0.48 on the day, but, assuredly, this was not Apple's finest moment (that was 1984 when they brought out the Macintosh (Mac) computer).

Steve Jobs, bless his soul, turned over in his grave, but it's been rumored he did have a good laugh with Al Einstein and Tom Edison when they saw the new Apple Watch.

Peak Apple? Possibly.

Peak stocks? Maybe.

Peak Stupidity? We're already well past that.

Dow Jones 17,995.72, +138.94 (0.78%)
S&P 500 2,079.43, +8.17 (0.39%)
Nasdaq 4,942.44, +15.07 (0.31%)

GOOD=BAD; NFP +295,000, DOW -278.87, NASDAQ -55.44, S&P 500 -29.78

As bizarre as global economics has become, almost nothing compares to the algo-crazed stock markets in the United States, where computers are programmed to interpret diverse news report headlines and respond accordingly.

One of the more perverse actions was visible today, when, after the BLS announced, in their monthly non-farm payroll release, that the US had created (mysteriously, magically) 295,000 net new jobs in the month of February stocks traded sharply to the downside and continued that trend for the remainder of the session.

At issue is the proposed June 0.25% increase (that's right, 25 bips) to the federal funds rate that the Federal reserve has been hinting at for the better part of the past two years. Maybe they've been hinting about this seminal event for longer, but, honestly, one has only so much patience for the garbled issuance of verbiage from the masters of misinformation.

Supposedly, the argument on Wall Street is thus: if the economy is truly improving and gathering steam, then the Fed will raise interest rates, meaning that inside players like the big banks, insurance companies and some hedge funds are going to find it much more difficult to make money, because, when you're borrowing billions of dollars at almost nothing, and investing it in dubious stocks and other investments that might not pan out as you had expected - unless the Fed has your back - and, leveraging up those investments 10, 20, maybe 30 times, any increase in your cost of borrowing might bring on disastrous events.

So, as soon as the bells and whistles went off signaling the opening of trade on the final day of the first week of March, the selling ensued, and did so with resolute alacrity and vigor not seen when the markets were going up (all of the past six years, on low volume).

The whole set-up is patently absurd and it's purely the cause of the Fed, which has kept rates too low for too long, and now must reap what they have sewn, so welcome to the great deflation, part two, which began in 2008, and was interrupted by the Fed and Wall Street in March of 2009. If stocks sell off like this merely on the rumor that the Fed will hike rates a measly 1/4 percent, imagine what kind of carnage will ensue when they actually do it.

Where the absurdity begins is difficult to ascertain, though the Fed, through their continued press releases after FOMC meetings, has linguistically backed themselves into a corner. They've repeatedly maintained that they will raise interest rates on a data-driven, unspecific schedule, and the data released today by the BLS was undeniably good, showing strong job growth and an unemployment rate at the lowest point in nearly a decade, at 5.5%, which, to almost anybody's eyes, is pretty much full employment.

There's one little problem with the figures the BLS releases the first Friday of every month: they're BULLS--T, garbage, manipulated, massaged, goal-sought, and thoroughly distort the true nature of the labor market. In other words, there's almost no way there were 295,000 new jobs created in the US last month, and the figures for the past year, and the year before that and before that, etc., are even more misleading. The US economy has been hollowed out, and, while it may be better here than it has been in years, it is not much better.

Now, the Fed knows these figures are made from pure cloth, but they are tied to them. Call today a test of the algorithms, a dry run for the main event, which should occur around the middle of June or by early July. The Fed and the government have to continue to spread the lie that the US economy is strong, vibrant and growing, and, because of that, while most other countries in the world are lowering interest rates (because they honestly know their economies stink), the US is prepared to embark upon one of the more ludicrous propaganda and financial experiments in the history of mankind.

The Federal Reserve, should they go through with their supposed plan to begin raising interest rates in June 2015, will be attempting the impossible, and doing a most dangerous thing: they will be trying to slow down an economy they proclaim - and would like everyone to believe - is growing, which in reality is contracting and deflating.

Our money is heavily on the side of reality winning that argument.

Related trades today concerned all US treasuries, which sold off, sending yields higher. Oil, gold and silver were all lower.

Dow Jones 17,856.85, -278.87 (-1.54%)
S&P 500 2,071.26, -29.78 (-1.42%)
Nasdaq 4,927.37, -55.44 (-1.11%)

Ironic notes: Today was Alan Greenspan's 89th birthday; Apple will replace AT&T in the Dow Jones Industrials on March 18 (just in the nick of time?)

Mario Draghi's Bold QE, Bank Stress Tests and February Payrolls

Thursday was a fascinating day for the world of finance ad markets (what's left of them), kicked off by the ECB rate announcement and finished up by US bank stress tests, released, cynically, after the close of equity markets.

And, the markets were largely unresponsive to what was happening in Europe because of their anticipatory stance toward the February Non-farm Payroll data due out on Friday.

Consequently, there were no major catalysts to propel markets in either direction generally, though, if one were to believe in the gospel according to Draghi (Mario Draghi, head of the ECB), al of Europe should be celebrating the prospect of EQE (European Quantitative Easing), because Draghi ad his cohorts see inflation rising by 1.5% in 2016 and GDP in the eurozone galloping ahead once the bond flow gets eaten entirely by the ECB.

This view is highly ignorant of facts, despite Draghi and the ECB having access to the best data in the world outside the Federal Reserve. First, the ECB should be well aware that QE has not driven either growth or inflation either in the United States or Japan (where they've been QE-ing it up for 20 years). Second, the amount of issuance of sovereign debt that the ECB proposes to purchase from the various government comprising the Eurozone might cause some significant crowding out of legitimate buyers of such debt.

QE is nothing more than a classic Ponzi scheme, with some big, fat-cat organization - be it the Fed, the BOJ or the ECB - striding atop government cash calls (bonds=debt). The central banks distribute the proceeds back into the system in whatever haphazard ways they can, the usual transmission mechanism being repos and open market "operations" directly to primary dealers (TBTF banks) that ends up in equity markets.

Presto! Government expands, stocks soar, while the general economy flummoxes, falters and fails. As is the usual case with all Ponzi schemes, everywhere and always, the last "investors" are left holding the bags of worthless paper. With the massive bond-buying monetization of government debt, the eventual losers will be regular people, whose pensions will be raided, whose cost of living will be untenable, whose lifestyles will be unstable, whose bank accounts will be bailed-in, whose futures will be null and void.

So, pay close attention to what's happening in Europe and Japan, because it eventually will find its way across both big ponds to the shores of North America. There is no doubt that QE and its after-effects will be crushing to ordinary people. The worst part of the story is that there will be nowhere on the planet to hide.

Well beyond the close of the moribund US equity markets, the Federal Reserve unleashed the current round of stress tests for the significant financial institutions.

All 31 banks passed. Halelujah!

These "tests" are nothing more than job security for CFOs and other executive who hang out in cushy corner offices. They are completely meaningless, especially since bank balance sheets are so opaque nothing of substance can be seen.

As far as the February, 2015 Non-farm Payrolls (due out at 8:30 am on Friday) are concerned, they'll contian the usual lies nd obfuscations that the BLS has become so famous for over the years. Ideally, the US will be shown to have created a couple zillion new jobs, but everybody will know that the numbers are wholly fiction and the economy is on its last legs. Wall Streeters will rejoice and send the major indices into the stratosphere, so that Fed Chair Janet Yellen can echo Greenspan and Bernanke by proclaiming the goodness of the "wealth effect."

Of course, most Americans will hardly notice said effect, as they struggle to make car and tuition payments.

Dow Jones 18,135.72, +38.82 (0.21%)
S&P 500 2,101.04, +2.51 (0.12%)
Nasdaq, 4,982.81, +15.67 (0.32%)

Deflation, Followed by More Deflation

In its simplest terms, deflation is defined as a decline in the money supply, but, because of central bank meddling such as QE and ZIRP (Zero Interest Rate Policy), money supply isn't really an issue, but, where the money is going turns out to be the bogey.

For all the pumping the Fed and other central banks have done since the Lehman crash in 2008, inflation and growth have failed to materialize because the money is stuck in transmission lines between the central banks and the TBTF banks, who don't want to take the risk of loaning money to real people, preferring instead to speculate in stocks and reward their cronies with fat bounties, otherwise known as bonuses.

The three trillion dollars by which the Fed has expanded its balance sheet since 2008 hasn't found its way into the real economy. Meanwhile, governments, from municipalities on up to the federal level, have done their best to over-regulate and over-tax working people, causing further strain on the bulk of consumers. So, if money, on one hand, is stuck in transmission, and taxes and fees are going up on the other hand, with incomes stagnant or falling, people have less to spend, and make their spending choices with just a little bit more prudence.

Depending on your age and circumstances, you may or may not be experiencing a bout of deflation this winter.

It really depends on what you spend your money on, where you live, where you shop, and what you do for a living.

Obviously, despite the best efforts of oil price manipulators to keep prices above $50 per barrel, the price of a gallon of gas has fallen precipitously over the past six months. That's a plus, as is the low price of natural gas. Consumers in the Northeast, experiencing one of the coldest winters in history, haven't had it too bad, because the cost of heating a home has dropped like a rock. It would be even better if Al Gore had actually been right about Global Warming. (Well, he did invent the internet, so you can't expect him to be perfect.)

Food prices have moderated, and, because fewer and fewer consumers are dining out, restaurants have been offering more specials. Food is one of those things that you really can't manipulate much, as it does have limited fresh shelf life. A decent summer growing season has kept a lid on food prices.

However, if you've got kids at all, and especially kids in college, you're likely feeling the pinch of higher tuitions and cost for college text books. Health care costs haven't moderated as much as the government would like you to think, either, so, if you have health insurance (Doesn't everybody? It's the LAW!), you're paying more.

Housing prices have moderated a bit, and bargains ca be found, especially in the Northeast and in rural areas. Farmland prices are coming down dramatically.

Behind all of this is the strong dollar, helped by the rest of the world, which is cutting interest rates and debasing currencies at a furious pace.

Thanks to Zero Hegde for the complete list of 21 central bank rate cuts so far in 2015:

1. Jan. 1 UZBEKISTAN
Uzbekistan's central bank cuts refi rate to 9% from 10%.

2. Jan. 7/Feb. 4 ROMANIA
Romania's central bank cuts its key interest rate by a total of 50 basis points, taking it to a new record low of 2.25%.

3. Jan. 15 SWITZERLAND
The Swiss National Bank stuns markets by discarding the franc's exchange rate cap to the euro. The tightening, however, is in part offset by a cut in the interest rate on certain deposit account balances by 0.5 percentage points to -0.75 percent.

4. Jan. 15 EGYPT
Egypt's central bank makes a surprise 50 basis point cut in its main interest rates, reducing the overnight deposit and lending rates to 8.75 and 9.75 percent, respectively.

5. Jan. 16 PERU
Peru's central bank surprises the market with a cut in its benchmark interest rate to 3.25 percent from 3.5 percent after the country posts its worst monthly economic expansion since 2009.

6. Jan. 20 TURKEY
Turkey's central bank lowers its main interest rate, but draws heavy criticism from government ministers who say the 50 basis point cut, five months before a parliamentary election, is not enough to support growth.

7. Jan. 21 CANADA
The Bank of Canada shocks markets by cutting interest rates to 0.75 percent from 1 percent, where it had been since September 2010, ending the longest period of unchanged rates in Canada since 1950.

8. Jan. 22 EUROPEAN CENTRAL BANK
The ECB launches a government bond-buying programme which will pump over a trillion euros into a sagging economy starting in March and running through to September, 2016, and perhaps beyond.

9. Jan. 24 PAKISTAN
Pakistan's central bank cuts its key discount rate to 8.5 percent from 9.5 percent, citing lower inflationary pressure due to falling global oil prices.

10. Jan. 28 SINGAPORE
The Monetary Authority of Singapore unexpectedly eases policy because the inflation outlook has "shifted significantly" since its last review in October 2014.

11. Jan. 28 ALBANIA
Albania's central bank cuts its benchmark interest rate to a record low 2%. This follows three rate cuts last year, the most recent in November.

12. Jan. 30 RUSSIA
Russia's central bank cuts its one-week minimum auction repo rate by two percentage points to 15 percent, a little over a month after raising it by 6.5 points to 17 percent, as fears of recession mount.

13. Feb. 3 AUSTRALIA
The Reserve Bank of Australia cuts its cash rate to an all-time low of 2.25%, seeking to spur a sluggish economy while keeping downward pressure on the local dollar.

14. Feb. 4/28 CHINA
China's central bank makes a system-wide cut to bank reserve requirements -- its first in more than two years -- to unleash a flood of liquidity to fight off economic slowdown and looming deflation. On Feb. 28, the People's Bank of China cut its interest rate by 25 bps, when it lowered its one-year lending rate to 5.35% from 5.6% and its one-year deposit rate to 2.5% from 2.75%. It also said it would raise the maximum interest rate on bank deposits to 130% of the benchmark rate from 120%.

15. Jan. 19/22/29/Feb. 5 DENMARK
Incredibly, the Danish central bank cuts interest rates four times in less than three weeks, and intervenes regularly in the currency market to keep the crown within the narrow range of its peg to the euro. (The won't last. See Switzerland.)

16. Feb. 13 SWEDEN
Sweden's central bank cut its key repo rate to -0.1 percent from zero where it had been since October, and said it would buy 10 billion Swedish crowns worth of bonds.

17. February 17, INDONESIA
Indonesia’s central bank unexpectedly cut its main interest rate for the first time in three years.

18. February 18, BOTSWANA
The Bank of Botswana reduced its benchmark interest rate for the first time in more than a year to help support the economy as inflation pressures ease. The rate was cut by 1 percentage point to 6.5%, the first change since Oct. 2013.

19. February 23, ISRAEL
The Bank of Israel reduced its interest rate by 0.15%, to 0.10% in order to stimulate a return of the inflation rate to within the price stability target of 1–3% a year over the next twelve months, and to support growth while maintaining financial stability.

20. Jan. 15, March 3, INDIA
The Reserve Bank of India surprises markets with a 25 basis point cut in rates to 7.75% and signals it could lower them further (they did, yesterday, to 7.50%), amid signs of cooling inflation and growth struggling to recover from its weakest levels since the 1980s.

21. Mar. 4, POLAND
The Monetary Policy Council lowered its benchmark seven-day reference rate by 50 basis points to 1.5%.

There will be more rate cuts and currency debasement, especially once the ECB gets its own QE program going. Note that all of these countries want to reflate, inflate or otherwise spur demand. The problem, as discussed above, is that people just aren't buying it, and they aren't buying. People have been paying down debt and saving, because, in an era of unprecedented central bank intervention and government regulation, the average Joe and Jane is uncertain about the future. It's a social phenomenon the economists can't compute.

Perhaps, in a free market without central bank meddling and government intervention into every aspect of one's life, capitalist economies might just have a chance.

Who knew?

Bottom line, central banks hate deflation, because it causes debt-driven economies to seize up and die, which is exactly why consumers should appreciate it.

Dow 18,096.90, -106.47 (-0.58%)
S&P 500 2,098.53, -9.25 (-0.44%)
Nasdaq 4,967.14, -12.76 (-0.26%)

Are We Recovering Enough?

Editor's Note: Money Daily stopped being a daily post blog in March, 2014. Well, it's now March, 2015, and, after a year off, little has changed, but Fearless Rick is once again re-charged to begin making daily (Monday - Friday) posts. This is, with hope, the first of many...

The following list is courtesy of the good squids over at Goldman Sachs.

From the start of February through March 2, these are the misses and beats of various US macro data.

MISSES

1. Personal Spending
2. Construction Spending
3. ISM New York
4. Factory Orders
5. Ward's Domestic Vehicle Sales
6. ADP Employment
7. Challenger Job Cuts
8. Initial Jobless Claims
9. Nonfarm Productivity
10. Trade Balance
11. Unemployment Rate
12. Labor Market Conditions Index
13. NFIB Small Business Optimism
14. Wholesale Inventories
15. Wholesale Sales
16. IBD Economic Optimism
17. Mortgage Apps
18. Retail Sales
19. Bloomberg Consumer Comfort
20. Business Inventories
21. UMich Consumer Sentiment
22. Empire Manufacturing
23. NAHB Homebuilder Confidence
24. Housing Starts
25. Building Permits
26. PPI
27. Industrial Production
28. Capacity Utilization
29. Manufacturing Production
30. Dallas Fed
31. Chicago Fed NAI
32. Existing Home Sales
33. Consumer Confidence
34. Richmond Fed
35. Personal Consumption
36. ISM Milwaukee
37. Chicago PMI
38. Pending Home Sales
39. Personal Income
40. Personal Spending
41. Construction Spending
42. ISM Manufacturing

BEATS

1. Markit Services PMI
2. Nonfarm Payrolls
3. JOLTS
4. Case-Shiller Home Price
5. Q4 GDP Revision (but notably lower)
6. Markit Manufacturing PMI

OK, so the US economy is going backwards at a 7:1 ratio of Misses to Beats, but stocks, since the beginning of February, have been roaring (today excluded).

The point is that stocks are ignoring the somber truth that the US economy is running on fumes and Wall Street is running on pretty much less than nothing (kinda like the motto for the NY Lottery - a dollar and a dream).

There are collapsing scenarios unfolding everywhere, from the disgusting behavior of executives at Lumber Liquidators (LL), who were exposed on 60 Minutes this past Sunday. There, the CEO says he didn't now that the below-cost flooring coming out of China didn't meet California (and much of the rest of the US states) standards for toxic emissions, especially formaldehyde. Sad fact is that after being punched down on Monday, the stock rallied more than 5% on Tuesday, but, worry not, it was at nearly 70 about a week ago, and was punished well before the TV coverage, down to around 40 now. Somebody knew something and obviously was front-running. Nothing new there, move along...

The award for most disgusting public display over the past few days is split between three distinct candidates:

• 1. The US congress, for cheering on the speech of Israeli Prime Minister, Benjamin Netanyahu, in a joint meeting.
• 2. The utter stupidity of millions on Twitter over whether some dress was white and gold or blue and black. Hasn't anyone ever heard of distortion?
• 3. The cops who shot the homeless guy in Los Angeles.

Like I said at the outset, not much has changed over the past year (or five years, for that matter). We're still kicking the can down the road, entrapped in a senseless bout of normalcy bias which is allowing the elite segment of society (Wall Street and DC, mostly) to trample on our freedoms and steal every last cent from the middle and lower classes, along with every shred of dignity.

Yep, like I said when I stopped writing daily diatribes a year ago, nothing is going to change until the Fed stops pumping money into the system. Well, they actually did stop, in the third quarter of last year, but the QE baton was quickly raised by Japan, and will shortly be taken up by the ECB, so, don't expect much to change any time soon. We've got at least a year and a half before the federal funds rate (you know, that one that seems to be permanently stuck between 0 and 0.25%, the rate at which the TBTF banks borrow) gets anywhere close to one percent, and even that could cause a panic in stocks.

In the meantime, the Baby Boomers are trying to figure out how to retire without any interest income, and that's an increasingly difficult trick, since the only reasonable yield one can get is at the far end of the curve, in 30-year bonds, currently hovering around 2.75%. $100,000 invested at that rate returns a whopping $2750 a year, so, you have to put up (and tie up) a million bucks just to live barely above the poverty level. Not much fun when you're 70 years old.

Deflation... it's what's for dinner (after the cat food).

Dow: 18,203.37, -85.26 (-0.47%)
S&P 500: 2,107.78, -9.61 (-0.45%)
Nasdaq 4,979.90, -28.20 (-0.56%)

More tomorrow...

Blowing Bubbles: NASDAQ Cracks 5000... Again!

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

It took nearly 15 years, but the NASDAQ Index finally has clawed its way back above the magical 5000 mark, closing today at 5008. The last time the NASDAQ closed over 5000 was on March 27, 2000, but, back then, it was going in the opposite direction, as the tech bubble was popped and investors were scrambling to hold onto gains in companies with no earnings, like Pets.com, Alta Vista and NetZero.

Today marked a 295% increase from the lows seen in March, 2009, so, conceivably, if one had the patience to hold the QQQs from then until now - just six short years - a near-quadrupling of one's money could be in hand at the close today. Of course, not even the most savvy investor, speculator or degenerate gambler could have been so lucky; stocks in the NASDAQ have been churned and turned, so the index looks quite a bit different than it did in 2009, even more so from 2000.

The NASDAQ of today is not quite as zippy as it was in the late 1990s. Volume is down dramatically and ten stocks - such as Apple, Google and Netflix - have provided more than 75% of the gains overall, so, it's likely that many investors were still stuck with moribund returns while the HFT algos ground higher for the one-percenters who control the market.

This nominal event evokes thoughts of the tech bubble and housing bubble, and shows some comparable characteristics. Special to the most recent rally of the past six years has been the incredible amount of liquidity provided by the Federal Reserve, an effect to which many ascribe the totality of the gains since 2009.

Whether we are once again in bubble territory remains not to be seen, but only to be verified. Talk, being the cheap commodity that it is, says loosely that stocks today are much better values, though recent macro data on the general economy, plus geo-economic conditions, seem to be pointed in a completely different direction.

Money Daily, convinced that we are once more headed for a collapse of astounding proportions, will resume regular daily postings with this writing.

Stay tuned. More information on the deformation of the markets is forthcoming.

Sunday Morning News Shows Have Become Un-Watchable, Unbearable

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Maybe it's just me.

Maybe I've gotten too old (61), too cranky, or too intolerant to listen to government and media morons every Sunday morning, or, to put it into closer perspective, ANY SUNDAY MORNING.

Today, since I can no longer stomach NBC's Meet the Press, I tuned into FoxNews Sunday, which airs at the same time in my market (thank goodness). After just four minutes of hearing why President Obama needs to call ISIS (ISIL) "Islamic Extremists," I was done. Is that kind of devolved worthless introspective what the news media (propagandists) deems important?

Or, maybe I should just sit through it, listen to the usually empty talking heads and the next potential Republican candidate for the 2016 presidential election and make my life choices based upon the trite script the networks wish to foist upon the American public.

That just doesn't seem to be a wise choice. Besides, we have the Brian Williams incident leading the indictment against mainstream news. Televised media, which took over when people stopped reading newspapers, is a hollow hell-hole of disingenuous political nonsense. Just watch any of these Sunday shows, or, a week's worth of evening news on ABCBSNBC, and count how many stories are devoted to government matters. It's nearly all of it.

Is that all that matters in America, anymore? What the government is doing?

Sorry, I'm tuning out.

There's better news coverage from alternative sources on the internet, and, I don't mean 140 characters on Twitter.

Rant over, and I still have 40 minutes of my life left that I used to spend "keeping up."

Glory!

And Now Comes the Crash

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Writing this morning as Dow futures are down around 275-300 points, market participants are reacting negatively to any number of factors, not the least of which was the truly ugly print of December durable goods orders, which came in at -3.4% against expectations of +0.3%.

Also revised lower were November's durable figures, from an already disappointing -0.7% to a dismal -2.1%.

The stock market crash, yes, the one that's been delayed since 2009 thanks to QE from the Fed, then Japan, and now, supposedly, from the European Union (EU), is upon us. The bull market that began when mark-t-market became mark-to-fantasy in March of 2009 has overstayed its welcome, and those who have not already jumped ship on tech stocks, income stocks, growth stocks (there's a real laugher for you; most companies' earnings for 2014 were lower than 2013 and 2015 will be lower still), or blue chip stocks, are about to get creamed, rapidly, starting today, but, when the Dow Industrials close below 17,068.87 (the close on December 16, 2014), for certain.

One only has to look at a recent chart of the Dow Jones Industrial Average and have a cursory understanding of Dow Theory to realize that the primary trend is about to change. Now, if it doesn't - if the Dow doesn't close below 17,068.87 and subsequently makes new highs, or, if it does close below that level and then makes new highs - then the market is being purposefully and blatantly manipulated. Besides the fact that most, if not all, markets have been manipulated since the crash of 2008, and probably well before that, a massive nosedive in stocks should come as little surprise to anybody, save those who hold out hope against hope that the Federal Reserve and the federal government, in all their wisdom, will save markets no matter what, which, in fact, is the core of manipulation itself.

Bull markets do not last forever. Lying and misguiding the public does not work forever. The public, that nebulous, unintelligible mass of humanity that follows blindly like sheep led to shearing or slaughter, will understand little of this, if any of it, but, we've collectively been led down a garden path to economic slavery and destruction by lying lawyers, bankers, CEOs, media and politicians, whose only concerns are their own, and against sound public policy.

Globally, economies are in a shambles. A raging currency war is merely pretext for a coming deep depression. While the United States may be the "cleanest shirt in a dirty laundry basket" it is no doubt still dirty, and a cleansing is overdue.

For too long, the American public has listened to the media, bankers and politicians who promised what they could not deliver: economic prosperity for everybody. It's a pipe dream, a facade, a fallacy, a Fugazy. The reckoning is upon us, just in time for the Super Bowl.

Just wait for the number: 17,068.87. When the Dow closes below that, it's game over, and no jawboning by Federal Reserve governors, or politicians, or media mouthpieces, can change that. A long, painful bear market will take the Dow and other averages to places nobody can imagine. At first, it will be called a correction (unless it absolutely crashes - like down 1000 points - today), but, make no doubt, it will be a bear market, followed by a recession, and then a depression (which, many will claim we are already in, since 2008).

Trust your own judgement, but, if you have not prepared for the worst of times, you are certain to live through them. Your portfolio allocations should look something like this: 20% Precious Metals; 60% cash; 20% survival/tradable/salable goods.

Best wishes to all.

SOTU 2015 Recap: Drink, Drink, Chug, Vomit; Oscar Wilde For The Win

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

Just to be fair, we didn't exactly keep pace with the president in our SOTU drinking game.

Having chosen the top four words from our Top Ten list - taxes, jobs, Middle Class, and, economy - President Obama brought down the house on the jobs number, using that specific word (either in the singular or plural form) 24 times before we stopped counting. Smartly, he only said "tax" or "taxes" five times, used the term, "Middle Class" four times, "economy" 13 times and never once used the word "rich."

Where the president excelled, however, actually overwhelming even our rosiest expectations, was in the bonus chugs segment, in which he mentioned ten countries specifically, not including the United States (or America), which technically didn't count, and was, obviously, one of the more frequently used words in his hour-long speech to the nation.

Obama got off early with mentions of Afghanistan and Iraq, and, though it took a while for him to come up with the third county, Japan, he took charge with a quick rattling off of Syria, Russia, Ukraine, Cuba, Iran, Israel and China in short order.

What took the whole drinking effort to new levels was the president's expert rendering of the terrorist naming bonus, in which we instructed that the mention of three terrorist groups would constitute a chug command. Though Obama specifically named only one group by name, he nailed the ISIS-ISIL bonus at 9:45 pm, 35 minutes into the speech, calling his favorite Mideast thugs by their pet name, ISIL, invoking the rule of our game to promptly end in a spellbinding, chug-til-you-puke crescendo.

So intent was the president on getting the nation massively inebriated that he intoned "ISIL" again just one minute later. Strangely enough, his wording was actually foreshadowed by Mrs. Alan Greenspan (aka, Andrea Mitchell), who mentioned ISIL just minutes before the president made his way to the podium. We applaud the otherwise droll Mrs. Greenspan for her literary bravado.

Aside from yet another successful SOTU drinking panacea - Obama's sixth - the president's rhetoric was little more than a rehash of his last two SOTU addresses, replete with promises that will be broken and high-minded principles to which congress and the administration will find difficult, if not impossible, to personalize.

Generally, while we agree in principle with a good deal of Obama's vision of America (though free community college and health care coverage for everyone are a bit too far out on the socialist agenda for our tastes), we have grown tired of waiting for either the president or the congress to come through with specific actions. Empty rhetoric becomes tiresome in short time. Repetition of such tends to be unbearable.

On the humorous, if not tragic, side, the president made the bold claim that inflation was at its lowest level in 50 years, at the precise time that the Federal Reserve is in a death match to avert outright deflation. While the president wishes to point out that low inflation is a grand intention - and it is - the pedals of public policy are being pimped and pumped by the pervicacious pedants at the Fed in exactly the opposite direction, with, thankfully, limited success.

Perhaps, in a perverse and fateful way, the wisdom and wit of Oscar Wilde is prescient:

"There are only two tragedies in life: one is not getting what one wants, and the other is getting it."

By all appearances, neither the Fed, the president, nor the American public's aspirations will be satiated.

State of the Union Drinking Game 2015: Multiple Choice, Top Ten Version, with Bonus Chug Words

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

By now, most of you know the rules about State of the Union Drinking Games, but, to briefly recap, it goes something like this:

We stole this image, but,

we liked it, so we kept it.

1. Prepare your favorite adult beverage, be it beer, wine, or a mixed concoction. Keep refills close at hand.

2. Settle into a comfortable chair or on your couch and get ready for the annual ritual monologue from whomever it is that has been selected (recall that elections are so 20th century, done away with the Supreme Court's decision in Gore v. Bush, circa 2000; now it's all managed by your black box friends at Diebold et. al.) to give the State of the Union speech, always this is the president, so we get Mr. Obama for the sixth or seventh time this year. Honestly, we've lost count because we've been so drunk most of the time.

3. Choose a word (or words) you think the speaker will utter a number of times, and prepare to take a swig or (dangerous, unless you're swilling peach brandy or some other fru-fru-umbrella-type drink) do a shot when the word (or words) is uttered. Those of you pounding 151 Rum or Rumplemintz, you are our heroes.

4. Turn on TV. Prepare to be bored, then angry, then drunk, and probably angrier.

For this year, we decided to list the top ten words we think will be the most popular ones to come off the teleprompter and then the lips of the President, and, no, we did not get an advance copy of the speech, though there have been leaks about the direction the president will be taking the speech.

Now, we are disappointed that the speech will be televised live on the major networks beginning at 9:00 pm ET, which is a little late for those of us in the working class or past middle age (seniors). As for the latter group, seniors, you should plan on eating a little later this evening, say, waiting until maybe 6:30 instead of the usual early-bird 4:25 pm.

If you're a working guy or gal who has to be up at 5:00 am or earlier, well, welcome to 21st century slavery. There are alternatives, you know, but, most of you are suffering from a severe case of normalcy bias, so we'll just let you alone, for now. In any case, many of you may want to warm up with a few cold ones or mixed ones or straight ones or neat ones beforehand. Whatever blows your hair back is fine by us. Warm-up drinks are advised, but just don't overdo it. President Obama is a verified crowd-pleaser when it comes to drinking games.

OK, here's the recommended Top Ten list, from what we* here at Money Daily think the president will toss out of his mouth, in descending order, from the most frequent to the least. We've also included some bonus chugs for those of you who wish to get completely inebriated or fall into a deep trance or become comatized before bedtime.

• 1. Taxes
• 2. Jobs
• 3. Middle Class (since it's two words and doesn't really exist anymore, we suggest taking two drinks whenever this term is used)
• 4. Economy
• 5. Russia
• 6. Terror or terrorism
• 7. Child or children
• 8. Congress
• 9. Education (always popular, but, in reality, a massive charade)
• 10. Stocks or Stock Market

It's suggested that if you really want to get your swerve on, you use all these words, but, for the majority of us, picking three or four should be sufficient.

For bonus chugging we're throwing in a couple of caveat words. If the president mentions the "rich," in a negative connotation, as in, "the rich need to be taxed heavily because they've glommed up more than half of everything in the world..." then it's a bonus chug. Also, if the president names three  or more specific countries during his speech, that's a bonus chug on the third country mentioned and another bonus chug for each subsequent country mentioned (no cheating rule: if he says the same country over and over, as in, "Iran must not get nukes, Iran must not sell oil, Iran must not mess up our planned obsolescence in Syria, Iran must be bombed into submission, like Ukraine..." that (Iran) only counts as one country, not three or four, but, since he mentioned two other countries there, chug.).

So, if the president says, in one part of his speech, "I love Canada," then follows up later with "Syria's president, Assad, must be droned," and then goes on to say, "Russia, is, has been and always will be, our mortal enemy," that's three and you chug. If he goes onto say something like, "members of the European Union, France, Germany, Spain, etc.," well, we can only suspect that Mr. Obama has read this blog and is just trying to get everybody in America hammered before he gets to the really good lying about how "exceptional" America is and how he's going to work with congress and all that.

And, if he mentions any terrorist groups by name, like Hezbolla, or Boko Haram, and especially ISIS, which will no doubt get mentioned, one chug per group, per mention.

And, for the killer bonus, if the president calls ISIS by their favorite name, ISIL, it's game over, drink until you puke.

OK, make your choices carefully, and remember, drink, but don't drive, or, for that matter, use power tools, for God's sake.

And don't even think of posting your results in our comment section. We literally don't care.

*Actually, it's just me, Fearless Rick, but "we" sounds so much more officious and monumental and, well, bigger.

Phantom GDP, Deflationary QE and Releasing the Consumer Kraken

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

OK, this is a little mind exercise for the new year.

Capital consists of money, labor, and resources (land, materials, machinery, buildings, infrastructure).

The Fed has control of just one of these three essential tenets of economy: money.

They make it out of nothing (to be more succinct, they create money from government debt - the Mandrake Mechanism, well-explained by G. Edward Griffin, in his expose of the Federal Reserve, The Creature from Jekyll Island - there are PDFs of this book available, or, buy it from Amazon or eBay, just go look.)

GDP growth is a canard, which the Fed and government can - and do - conspire to adjust according to their whims, wants, needs.

Unless somebody's building something that wasn't there beforehand, or there are more people building things (population growth, which is, after all, potential capital) or being more productive (technology), the only way to increase GDP is through money creation, i.e., inflation, which, in its most strict definition is an increase in the money supply, and, that is the essence of QE.

So, why hasn't there been inflation? In addition to the various reasons offered in this article, allow these meager observations:

• Money is moved off-shore
• Money is wasted
• Money goes into non-productive assets (stocks, especially stock buybacks, the most unproductive of all, actually deflationary)
• but, fewer people are working (unemployment)
• the amount of land in the US (and the world) is fixed
• a building burns, becomes dilapidated (impaired asset) or is vacant (lots of homes like that in the US thanks to the banks), becomes less-valued, non-productive, heading towards zero value, and that is deflation on a grand scale.

So, the people who want programs to improve the infrastructure in the US (roads, bridges, power grid, etc.) are correct in assuming that such programs would improve the economy. More jobs, more income, more velocity of money, and, most importantly, better, more efficient, more productive infrastructure, which leads to better manufacturing, agriculture, i.e., a virtuous cycle.

What we have today is a nearly closed-loop of money creation and destruction. Government issues bonds, Fed (or one of their many conduits, or other central banks) buys them with newly-created-out-of-thin-air money. That money goes to banks, which buy stocks or hoard as reserves, adding nothing to the general economy. GDP stagnates. Any little that may trickle out as loans to businesses or mortgages, is actually productive, but the banks, being the arbiters of money and controllers of credit, don't trust the public, and, additionally, have a hard time making a profit at 2, 3, or 4%. The problem for the Fed is the massive oversupply in everything from existing homes to corn to cheap junk from China, to now, oil and gas.

You want inflation, raise interest rates, because the pent-up demand will be filled by banks which can make money at 5, 6, or 7%.

My conclusion is that either the Fed doesn't understand this process (unlikely), or they actually want stagnation and/or disinflation or deflation (very likely). Remember, the dollar was getting weak up until 2009 and beyond, but look what's happened, the dollar is strengthening, and people want more of those dollars (the 10-year yield at 2.15% is magnitudes better than the German bund or the Bank of Japan's 10-year yield.). The Fed, as usual, has been lying through their teeth about everything from the virtues of quantitative easing (QE, i.e., free money) to the strength of the global economy (fact: it's weak.). There's a long history of the Fed saying one thing and knowing that the complete opposite - or nearly so - is actually true. That's how they get everyone to go along with their schemes of booms, busts, inflations, depressions, recessions... they and their crony, member banks, front-running everything.

The past few years have been good years for investing (ask anyone with a 401k or stocks), but it's not going to last. Maybe a few more years, because, once the banks start lending again in earnest, the inflation spigot will be wide open and the Fed knows this.

The Fed knows exactly what it is doing, and they're doing it slowly, as to avoid shocks. Anybody who hasn't been able to prosper (as in paying down debt, cutting expenditures, improving existing infrastructure - remodel your house, add solar panels, buy a better vehicle, increase acreage of productive land, learn new skills or improve existing ones) has missed the boat.

Point in fact: In 2005,6,7,8, I could not get a credit card with less than 22% interest. In 2009, I got a 4% home equity line of credit for roughly 50% of the value of my property (owned free and clear) from a local credit union (thank God for them). That one valued asset (my home) has, along with the meager line of credit, in five years time, allowed me to pay off all my existing credit card debt, buy inventory for my business, buy other assets (mostly silver) then get deals from various banks (yes, the very ones which caused the near-catastrophe of 2008), which now has me in this most unusual predicament: I have 0% credit - some of it guaranteed through June, 2016 - in an amount which far exceeds my original 4% home equity line, much of which I have already paid back.

My trick, if I can pull it off, will be to use the 0% credit as ready cash as part of a down payment on a better property for my home and business. With interest rates so low, it's almost foolish NOT to make this move.

The only risk, as far as I can tell, is if my income nosedives (not likely) and I'm unable to service my debt. In that case, I pay the mortgage (and taxes, the government always get theirs, don't they?) first, and let the banks figure out what to do with the defaulted CC debt. Long story short, I could then file for bankruptcy protection, and, even though the CC debt would not be fully discharged, I could get restructured and/or some forebearance/forgiveness and, keep my home, which, in the long run, is all that matters, the REAL, productive, improvable capital.

Seriously, I've been stacking silver, hoarding cash and business inventory for four years, and it's about time to unleash the Kraken!

Banksters beware! You've enabled your own worst nightmare. More adventures in high finance are sure to follow.

Today's advice: Pay attention and stay liquid. Interest rates keep going lower, meaning there's still another two years of embraceable low interest rates to be had.

Lower Oil Prices + Deflation = Prosperity

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

The economy will boom with lower oil and gas prices. This has probably been planned a long time ago. The bulls--t about marginal production from fraking keeps ringer ever more hollow. First, it was shale drillers will default at $80, then $70, now, it's $50.

The other day on CNBC, Kramer (the biggest a$$hat of all time) announced that the shale drillers won't default until oil hits $40. If that's the case - and, the number is probably lower for drills already in the ground - let's go for $30, which should get gas back to about $1.50/gallon or less.

There are already 17 states under $2.75 a gallon, so we're on our way. Average is about $2.84, so if oil is at $75 now, cut that in half, $37.50, and presto, average gallon of gas in the US is $1.42, and, no, it does not have to go back up. There's no law, physical or otherwise, that posits that prices must always rise.

Thanks to endless central bank meddling, the world's economies are deflating, and, with any luck, the governments will deflate as well, or die.

This is just the start of what should have happened in 2008-09. The past 6 years have been a complete farce, designed only to keep stocks up and the rich richer. The essential problem is that if the economy collapses, what happens to incomes and pensions?

Well, kids, they get cut, too. In the end, it should be a wash. If your average cost of living falls by 40%, you need 40% less money to live. The heck with the public pension plans with $100,000+++ retired cops and teachers. They'll be happy campers at $60+ with lower prices for everything.

Morons are everywhere, but most of them live and work in state and national capitols (DC and NYC have the highest percentages, for sure). Fuck them. Stop the consumer shit. Save, don't spend. Let everything drop in price. Deflation is wonderful so long as the government and economists GET THE FracK OUT OF THE WAY.

FREE MARKETS 4-EV-A

There's just one kicker: The cost of nearly everything will decline, except housing. Anybody who bought before 2008, or after, thinking they were getting a bargain, will once again be upside-down.

Get ready for housing crash, part two!

(Best part about it is that the Fed now owns most of the worthless MBS paper.)

Familial Relations and the River of Dreams

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

It's been a long day.

Worse, it's not over yet.

There are three things, though, which I know will get me through the day and into the night.

Three things, which I possess:

• A clear conscience
• Peace of mind
• The will to seek the truth

That's all I need to say. I'll get by. Always do.

Oh, yeah, and then there's my theme song, courtesy of Billy Joel:



I don't know whether to laugh or cry, so I might as well just dance.

And, just in case, here's the lyrics:

In the middle of the night
I go walking in my sleep
From the mountains of faith
To the river so deep

I must be looking for something
Something sacred I lost
But the river is wide
And it's too hard to cross

And even though I know the river is wide
I walk down every evening and I stand on the shore
And try to cross to the opposite side
So I can finally find out what I've been looking for

In the middle of the night

I go walking in my sleep
Through the valley of fear
To a river so deep

And I've been searching for something
Taken out of my soul
Something I would never lose
Something somebody stole

I don't know why I go walking at night
But now I'm tired and I don't want to walk anymore
I hope it doesn't take the rest of my life
Until I find what it is that I've been looking for

In the middle of the night
I go walking in my sleep
Through the jungle of doubt
To a river so deep

I know I'm searching for something
Something so undefined
That it can only be seen
By the eyes of the blind

In the middle of the night

I'm not sure about a life after this
God knows I've never been a spiritual man
Baptized by the fire, I wade into the river
That runs to the promised land

In the middle of the night
I go walking in my sleep
Through the desert of truth
To the river so deep

We all end in the ocean
We all start in the streams
We're all carried along
By the river of dreams

In the middle of the night

US Interest Rate Yields on Ten-Year Treasuries Will Go Lower

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

I wrote this post today in response to an article that said interest rates can't get any lower...(FR)

The 10-year treasury still has a long way down to go. Hell, we're still at 2.55% or thereabouts, while the Bund is hovering around 1.7%, and the Jap 10-year is fagedaboutit! like 0.6%. So, the US gov and the Fed and Wall St. still have more time to shake, rattle and roll that paper. QE has been winding down and the stock market keeps going up, so, the Fed must be happy with that, and, remember, now they can always unwrap a new round of QE, since the last few have worked out so well.

Just in case nobody's noticing, there are still a lot of (take your pick) well-off middle class retirees, pretty well-off working class stiffs (albeit fewer than before, and most of them are in the Public sector), welfare queens, idiots spending $XXXX to send their spoiled kids to school, mammoth tax receipts (wanna get sick, try a school district budget of $67 million to educate 3600 kids from K-12), car loans and leases, people buying houses at ridiculously-inflated prices.

OK, you get my drift. There's still lots of money floating around and the bankers, .gov and the Fed still have more to skim. Why would they willingly end this massive ponzi upon which they sit at the top? This is going to go on and on and on. It's been six years since the crash of '08, and nobody expected us to be where we are now, back then, so, I think nobody expects this to go on much longer, but normalcy bias and cognitive dissonance will outlast rational economic policies (already have).

Consider: Five years ago today, my father died. Left me his house and other assets. I stopped paying the mortgage immediately. Bank started foreclosure in March 2010, since then, crickets. I am still here. Bank knows the house is worth maybe 2/3rds or less of what they appraised it for in 2007. If they prevail in foreclosure, they lose. If they make a deal with me, they lose. If they keep the non-performing loan on their books at par: WIN, WIN, WIN, because they never have to realize the loss.

Some people ask me if it is stressful to live in a house I do not own (depends on how you look at it). I've rationalized that the bank (BofA) does not have any good solution. I also don't want to move, or pay, so, essentially, we're (the bank and me) both faking it, which makes certain sense, since the money is fake, the mortgage was based on fraud and all wealth is just more massive fakery.

Who's rich? I know a guy with $5-7 million in the bank and he doesn't know what the hell to do with it. He's still working at retirement age, for god's sake. I have almost nothing, and love my life, my little garden, fish ponds, a life of leisure and literature, could care less about money because it's all fake, and I've always been able to make as much as I need since I was 16 (now 60).

So, who's rich? The "wealthy" boob without a clue, or me, as I sit by the fish pond, reading Thoreau or Dante or Milton, in the sunshine as my garden grows by nature. The garden will sustain me. All the money in the world cannot buy that kind of security nor peace of mind.

You judge for yourself. Sure, I'd take that guy's $6 million, buy a big-assed piece of land and you'd never see me again. But this fool can't figure that far. I stopped working full time in 1999, because I always felt the rat race was just that: working just to pay bills. A fool's game. So, I don't have much in terms of money, but I have lots of physical assets which are either useful or valuable, tangible and intangible, no stress and much happiness.

Everybody talks about retirement, but what is the point? I know some idiots who retired and then got a job. WTF? My idea of retirement is what I do now. Work a little (I average about two hours a day), chill, drink, laugh. It's pretty easy.

OK, I'm rambling, but I keep thinking about that cryptic message by the IMF chief, Christine LaGarde,  about the number seven and 7/20/2014. Having studied numerology (did you know it was invented by Pythagoras? Yep, that guy!) I see it this way: If she was sending a message, well, too many people caught on, and, yeah, something may have been planned for that date, but plans change, and, things seem to be going pretty good for the status quo right now, so why mess with it? Something may happen this Sunday, but it probably won't be as dramatic as anyone expects. I'm thinking it's all hot air. Personally, I'm going to a party. Here's the video clip in question:

I believe the author of this youtube clip is overstating the case, taking too much for granted to make his point. There's no G7 or G20 meeting scheduled for that weekend, except for G20 meeting of trade ministers in Sydney, Australia on the 19th. So, if anything earth-shaking is to occur, it would likely come out of that meeting, so it's worth keeping an eye on. Just in case, I'll be pulling some cash out of my bank on Friday, especially if there are other clues, though, so far, none.

Try to change your lifestyle. Be more self-reliant. Try not driving for a day, a few days. Don't watch TV. Cook for yourself. It's refreshing.

In Celebration of Dow 17,000 and a Boffo NFP Report, the Yellen Shriek

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

A stroke of brilliance this morning:

The Lord's Prayer, revised as "The Yellen Shriek" for Wall Street:

Our fiat,
Which art in dollars,
hollow be thy worth.
Thy stocks go up,
thy vix be down
on CBOE as it is on Wall Street.
Give plebes this day their daily crumb of bread
and deliver us thy dividends,
as we distribute to the one percent.
And lead us not into recession,
but deliver us more POMO,
for the kingdom and the power,
and the glory resides at the Fed,
QE forever and ever,
Amen.

Go viral, and, have a Happy 4th of July, AKA, INDEPENDENCE DAY!

The Biggest Bubble of All Time is About to Be Popped

Money Daily stopped being a daily post blog in March, 2014. While the name remains the same, the posts are now on an intermittent basis, as conditions warrant, though it is advised to read the archives (from 2006-2014) regularly, even daily, for insights and historical perspective.

The handwriting, so to speak, is all over Wall Street. What has been the biggest financial bubble in the history of the world is on the verge of busting, or, what could be better still, slowly deflating.

After the crash of 2008-09, the Federal Reserve, in conjunction with central banks around the globe, injected massive amounts of liquidity into the fiat world currency markets, bolstering everything from junk bonds to consumer credit, but especially equities, otherwise known as stocks.

Since March 9, 2009, the major equity indices in the US - and, to a large degree, around the world - have rebounded on the strength of the Fed's largesse, nothing else. Now that the Fed has begun unwinding QE, the "juice" is being withdrawn. There will be no backstop for equities in the guise of unlimited liquidity from the Fed. The plan - already underway - is to reduce the amount of asset (bond) purchases by the Fed from their high of $85 billion per month, to zero. While it is unlikely the Fed will ever get to zero without reversing course or, at least, slowing the pace of their withdrawal, the March FOMC meeting will mark the third consecutive lowering of the monthly purchase level, timed in accordance with the 10-per-year FOMC schedule.

The Fed first announced in December, 2013 that it would be reducing purchases in January, 2014, and did the same in their first meeting of 2014, in January, lowering their purchase level to $65 billion in February. Since there was no meeting in February, they are expected to announce another $10 billion reduction at the March meeting next week (March 18-19). If they carry through with this expected drop to $55 billion, the market cracks which first occurred in January of this year, may turn into wholesale breaks, sending index levels below their recent lows, highlighted by the January 31 selloff.

With the S&P recovering all of its January and February losses and making new all-time highs earlier this month (the NASDAQ also made new 14-year highs), the Dow Jones Industrials did not, setting up the scenario for a bear market, according to strict Dow Theory.

If the Dow, having fallen short of its most recent high (16,588.25), continues on its path lower, exceeding the interim low of 15,340.69 (Feb. 4), this will confirm that a change in the primary tend has occurred, and a secular bear market is underway. This bear market could last anywhere from five to 20 years, possibly longer, because the recent, primary bull market - the second longest in market history - was built upon a foundation of incredibly easy money, low interest rates and global fiat currencies, unprecedented in financial history.

The fallout could be severe, popping the biggest financial asset bubble of all time, in stocks, affecting everything from individual stocks to your pension, IRA or 401k to muni bonds. In other words, be prepared for the biggest financial collapse of all time, because the last five years have been nothing but pure financial fantasy, and it's all about to come crashing to an end.

There are sure signs that the global economy is shrieking and straining to remain relevant and above water, but after blowing bubbles recently in dotcom stocks (1997-2001) and real estate (2003-2007), the Fed has reflated the economy with trillions of paper dollars, augmented by similarly spurious activities in Europe, China and Japan. The financial bubble created by central banks is of a magnitude much larger - possibly four to six times larger - than the sub-prime-induced housing meltdown, putting the figure of financial assets seriously at risk somewhere between $20 and $40 trillion dollars, an amount so unfathomable that nothing short of pure currency collapses can sufficiently make account.

(As this post is being composed (March 13, 2014, 1:10 pm EDT), the Dow Jones Industrial average has broken through its 50-day-moving average, down 194 points on the day.)

Beyond just charts and the scary finances of the central banks, China is the linchpin by which the financial dam may be breached. For the past two to three months, data out of the world's second-largest economy has been trending lower, especially in the areas of industrial production and exporting. In fact, China actually released data that showed it suffered a current account deficit, with imports exceeding exports, a very frightening development for one of the world's few export economies and a major trading partner with the US and Europe.

What the China data underscores is the overall weakness in US and European (developed) markets. The fraud of financialization has finally produced a result incompatible with the ponzi-scheme-like mantra of the central bankers. Consumers have been and are strapped for cash, a result of over-exuberant government spending, massive income disparity between the rich and poor and stagnant or declining wages in the middle of a labor shortfall crisis.

There are signs everywhere that the global economy is about to be brought back to reality, including, but by no means limited to, recent poor US unemployment data, a false housing recovery (inundated with cash buyers, flippers and speculation), inability of the government to prosecute bankers and financial operatives for mortgage and other frauds, declining adherence to the constitution and the trampling of civil rights, bogus car sales data with channel stuffing rampant, blaming the weather for poor economic results (seriously, the holiday shopping season was a complete bust), and overvaluation of speculative IPOs, tech stocks and other momentum stocks, enterprise valuations of stocks in the billions of dollars, based on nothing but pure speculation.

Nothing will stop the wreckage that the Fed and global central banks working in collusion have set in motion. The numbers are ghastly and overwhelming and the warnings have been written about for years. The time to prepare was yesterday, though there is still time, but thought processes must change. Status and wealth should not be measured by the size of one's McMansion, the price of one's car or the depth of one's stock portfolio. True wealth consists of something along these lines: a fully-paid-for home on five or more acres of land, two-thirds of it arable, food and water storage to last at least a year, a horde of cash, gold and/or silver, absolutely ZERO DEBT, and the ability and weaponry to defend it all.

Ask yourself, who among you can make claim to that, because that is real wealth, not the paper promises from Wall Street or Washington.

It's coming. And it may be approaching even faster than anyone wants to consider (think Ukraine).

Good luck.

So, This is Good-bye; Good Luck with Janet Yellen

After 1828 posts, spanning nine years (started in 2006), this may be the last post for Money Daily - at least in its current form. Perhaps at some point I will change the name to Finance Weekly or Rick's Occasional Posts on the Economy or something like that, but the effort involved in producing a relevant post every day (as opposed to the ridiculous ranting often seen here) seems to be not worth the effort anymore.

Since the economic collapse of 2008-09, the global financial system has been wildly distorted by the actions of central banks, primarily by the US Federal Reserve, via their Zero Interest Rate Policy (ZIRP) and Quantitative Easing (QE) mechanisms.

While Wall Street regulars laud praise upon former Chairman Ben Bernanke, and surely they will do the same with Janet Yellen, the Fed policies of the past six years have benefitted only banks and speculators, often those two disparate entities being one and the same. Surely, anybody who receives money at close to zero percent interest can make a buck, and it's even easier when you're in collusion with other bankers or speculators, as is the case with our current system.

Nothing other than the Fed matters when it comes to stocks, bonds, or even money in general. The Fed creates it out of thin air in copious amounts, and, even though they've recently cut back on their rampant printing - from $85 billion to a mere $65 billion per month - it's still a hugely distorting factor in all markets.

There is no stopping it, and any kind of qualitative analysis of financial markets must factor this element in as a major bulwark.

Thus, there is little to discuss on a day-to-day ongoing basis, because, in the end, nothing else matters or makes perfect sense, and, in economics, as in any "science," perfection is demanded, though all too often it is lacking, covered up by innuendo and a false sense of security supplied by the Fed and their lackeys in the financial media and Wall Street hack talkers, disguised as "analysts" for public consumption.

Since a more balanced, sustainable approach is preferred by your humble author, it's time to move on to other creative pursuits. I may, from time to time, pen a financial piece and post it here, but the numbing daily schedule will be no more.

It's been fun, for the most part, and I wish anyone and everyone who has gained from this the best in their investment and financial decisions. For my money, I prefer to keep stacking silver (which made an enormous move today), learn more about and engage in sustainable farming and leave the financial gimmickry to those better suited (pun intended) to that kind of soulless lying.

In closing, since we are engaged in a world that often makes little sense, a few lines from George Orwell's 1984:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

Via con Dios, mis amigos!

--FR

DOW 16,154.39, +126.80 (+0.79%)
NASDAQ 4,244.03, +3.35 (+0.08%)
S&P 1,838.63, +8.80 (+0.48%)
10-Yr Note 100.06, +0.02 (+0.02%) Yield: 2.74%
NASDAQ Volume 1.73 Bil
NYSE Volume 3.10 Bil
Combined NYSE & NASDAQ Advance - Decline: 3417-2261
Combined NYSE & NASDAQ New highs - New lows: 278-24
WTI crude oil: 100.30, -0.05
Gold: 1,318.60, +18.50
Silver: 21.42, +1.026
Corn: 445.25, +4.75

Yellen Testimony Delayed; Markets Rise Despite Lack of Noise

Was anybody not connected to the Wall Street/Washington Ponzi scheme really impressed with Janet Yellen?

The woman sounds like she's been speech-and-brain-impaired since childhood. Sure, she may be among the "best and brightest" but her answers to the softball questions proffered by the House Financial Services Committee didn't raise the bar of professional standards one centimeter, nor did they offer anything other than the usual, plodding "we-will-continue-to-print-until-we-don't" message the Fed's been spouting for the past three to four years.

Sorry, but it's boring, and Janet Yellen may be the "Chair" of the Fed, but she surely doesn't have the backs of regular American citizens. She works for banks, period.

So, paraphrasing our illustrious president, "if you like your Fed Chair, you can keep your Fed Chair."

A snowstorm pushed Yellen's scheduled Thursday testimony before the Senate Banking Committee back to next week. The markets, not wanting to wait until then, rallied anyway, on poor retail sales and unemployment data.

What a scheme. The markets are so distorted, it makes writing about them a difficult, annoying chore, almost not worth doing. This may be the final week of Money Daily.

DOW 16,027.59, +63.65 (+0.40%)
NASDAQ 4,240.67, +39.38 (+0.94%)
S&P 1,829.83, +10.57 (+0.58%)
10-Yr Note 100.05, +0.85 (+0.85%) Yield: 2.73%
NASDAQ Volume 2.08 Bil
NYSE Volume 3.25 Bil
Combined NYSE & NASDAQ Advance - Decline: 4143-1528
Combined NYSE & NASDAQ New highs - New lows: 275-41
WTI crude oil: 100.35, -0.02
Gold: 1,300.10, +5.10
Silver: 20.40, +0.054
Corn: 440.50 , +0.50

Quiet Yellen, Dow's a'Sellin'

Since Fed Chair Janet Yellen wasn't stuttering... er, um, speaking today, stocks pretty much ran in place.

That's all there is to this market, for now, but, stick around, the game will change at some point.

We do note that gold has been tearing it up lately, silver a little less so (though it made up some ground today), and don't we all love crude oil over $100 per barrel?

One can also buy more corn toady with the same amount or less silver than yesterday, so that's the deflationary argument.

DOW 15,963.94, -30.83 (-0.19%)
NASDAQ 4,201.29, +10.24 (+0.24%)
S&P 1,819.26, -0.49 (-0.03%)
10-Yr Note 99.94, -0.13 (-0.13%) Yield: 2.76%
NASDAQ Volume 1.88 Bil
NYSE Volume 3.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 2995-2698
Combined NYSE & NASDAQ New highs - New lows: 232-36
WTI crude oil: 100.37, +0.43
Gold: 1,295.00, +5.20
Silver: 20.34, +0.188
Corn: 440.00, -1.50

Wall Street Goes Ga-Ga Over Fed Chair, Janet Yellen

Janet Yellen's testimony to congress and the subsequent question-answer period was a rather revolting display of crony capitalism in its most blatant form. Legislators swooned over the new Fed Chair (as she is now to be known), and Wall Street sent stocks to the moon, again.

Yellen's prepared testimony to the House Financial Services Committee:

Yellen Speech Feb 11

Bear in mind, these are the people/drones/robots elected/appointed to rule/run/govern the country/world/universe.

Hedge accordingly... or, just kill yourself now.

DOW 15,994.77, +192.98 (+1.22%)
NASDAQ 4,191.05, +42.87 (+1.03%)
S&P 1,819.75, +19.91 (+1.11%)
10-Yr Note 100.23, +0.01 (+0.01%) Yield: 2.72%
NASDAQ Volume 1.86 Bil
NYSE Volume 3.68 Bil
Combined NYSE & NASDAQ Advance - Decline: 3228-1494
Combined NYSE & NASDAQ New highs - New lows: 190-32
WTI crude oil: 99.94, -0.12
Gold: 1,289.80, +15.10
Silver: 20.15, +0.041
Corn: 441.50, -1.50

No Follow Through After Phony Friday Rally

Following Friday's dismal non-farm payroll data for January, the subsequent scream higher in equity markets (stocks) and the Money Daily contention that the market was rigged and traditional valuation metrics useless, Monday brought some confirmation of our position, in that markets barely budged.

The generally-accepted theory - for today - is that markets and investors are awaiting Janet Yellen's testimony before congress Tuesday and Thursday. On Tuesday, the newest -and first - Fed chairwoman will appear before the House Financial Services Committee. On Thursday, she addresses and takes questions from the Senate Banking Committee.

We'll take a different approach: BULL-PUCKEY! The reason markets didn't do much today is because they have nowhere to go after the massive ramping Thursday and Friday, on nothing but bad news, and the insiders are awaiting the influx of suckers to keep the rally going, so said insiders can SELL, SELL, SELL the stocks bought (at the behest of the NY Fed and the PPT) they bought last week that kept the market from entering a 10% correction.

Now, those suckers will surely appear at some point, soon after which the insiders will be selling, though not all at once, so as not to produce a self-reinforcing selling loop. No the selling will be niggling, nibbling, small amounts, though large enough to keep stock prices moderately higher or lower, for a while.

The key question at this juncture is not whether the market is manipulated - as it has been clearly demonstrated that all financial markets are manipulated - because, if the Fed isn't manipulating markets by its dual policy of ZIRP and QE, then what should we call it? No, the key question is how long it will take for the major indices to return to and exceed their recent all-time highs?

A month? Two? Six? It matters little, unless stocks tumble below their recent lows, because then, the fraud will be crystal clear and a correction will be in force, followed by a primary bear market.

The numbers to watch are these:
Dow: High: 16,576.66; Low: 15,372.80
S&P 500: High: 1,848.36' Low: 1,741.89
NASDAQ: High: 4,176.59; Low: 3,996.96

All of these figures are closing highs and lows and they all occurred on the same dates, the highs on December 31, 2013, the lows on February 3, 2014. Everything else in between is nothing but noise, but, it should be pointed out that the Dow, in particular, is a long way from those all-time highs, about 775 points away, and that matters.

So, what will the sociopaths of Wall Street and the crony capitalists in Washington DC dream up to achieve the facade of "recovery" this time? Or will they fight to the death over the debt ceiling all month long, only to resolve it in a late-night session, and then have the markets zoom forward? Any way they slice it, it's still one big stick of baloney, and not a choice cut, to boot.

A couple of other indications that support the theory that Thursday and, especially, Friday's rally was fake, are the slump in yield on the 10-year note, back down to 2.67% and stellar movement in gold and silver. If everything is supposed to be so fine and dandy, why then were investors rushing to safe haven assets on Monday?

There are more questions than answers, but, when dealing with fraud and fixing at such a high and clandestine level, there is much that is unknown and unseen, but, we've seen enough to know not to buy the sizzle nor the steak at this juncture.

DOW 15,801.79, +7.71 (+0.05%)
NASDAQ 4,148.17, +22.31 (+0.54%)
S&P 1,799.84, +2.82 (+0.16%)
10-Yr Note 100.65, +0.47 (+0.47%) Yield: 2.67%
NASDAQ Volume 1.68 Bil
NYSE Volume 3.30 Bil
Combined NYSE & NASDAQ Advance - Decline: 3338-2348
Combined NYSE & NASDAQ New highs - New lows: 129-29
WTI crude oil: 100.06, +0.18
Gold: 1,274.70, +11.80
Silver: 20.11, +0.176
Corn: 443.00, -1.25

Fake, Fake, Fake Rally After Non-Farm Payroll Jobs Disappointment

With baited breath, the world awaits the January non-farm payroll report, and, when it is released, and it is far worse, far weaker than expected, stocks go straight up.

Yes, that's exactly what happened. Yes, it defies logic. NO, we're not buying it.

Just in case anybody hasn't noticed, banks, brokers and high government officials have variously been accused - and some even admitted (though untried and none convicted) - of manipulating Libor rates, FX markets, precious metals, mortgages, commodities, municipal bonds and probably every other financial asset where a market is made.

So, should it surprise anyone if stocks are manipulated, rigged, fixed, flogged, whipped and played to the whims of the rentier class?

No, it certainly should not.

While the handwriting is plain as day on the Wall Street walls, scrolled in the signature style of the PPT.

When the announcement was made at 8:30 am ET Friday morning, that the US created a mere 113,000 jobs in January - after posting a horrifying 74,000 (upgraded to 75,000 this morning) for December - stock futures headed due south, sending the implied opens for the major indices to morning lows.

However, within minutes, those losses in the futures markets were wiped away, as the futures galloped up, up and away, pointing to a counterintuitive higher open for US markets.

The Dow, together with Thursday's vapor ramp, put in the best two-day performance since October, and US markets still haven't had a 10% correction since August of 2011.

Apparently, one should believe that the lower jobs numbers are somehow good for the economy, in that the Fed may begin to "un-taper" their recent tapering of bond purchases and bring the legendary punch bowl back to the Wall Street jubilee, where the connected truly do get "money for nothing" and the chicks (and coke) for free.

Apparently, one should believe that $100-per-barrel crude oil and $3.50-4.00-a-gallon gas are good for the economy.

We wisened investors should also believe that gold is permanently priced at $1250 per ounce, silver at $20, all mortgage-backed securities are worth 100% of their par value, real estate never goes down, Janet Yellen and the rest of her Fed brethren have the best interests of the US citizenry at heart, pigs fly and flying unicorns that poop rainbows are real and are stabled in the basement of the Mariner-Eccles building.

We should embrace a president who openly lies, a congress which will not impeach, a spy agency who reads this, knows you are reading it, listens in on everything, everywhere, all the time, a steadily-declining median household income even in the face of the top 10% making more than ever, part-time jobs replacing full-time ones, taxes that only go up, regulations on everything and penalties for anything not covered by regulations.

It's all good, all the time, even if you're losing your home, having your kids taken from you and starving to death. At this pace, as the US economy plunges even deeper into depression than it already has, stocks should set all-time highs endlessly, without pause, forever.

For the record, Money Daily will stick to its call made days ago, that the market has turned from bull to bear, be proven wrong, but understand that nothing is really as it seems. As conditions in the real world worsen, they'll only get better on Wall Street, in Washington and on the paper facade that is CNBC and Bloomberg. Buy it, own it, be it.

Good is evil. War is peace. Love is hate. Stay short and get slaughtered. After all, if Wall Street doesn't take your phony paper money, Washington will.

Emerging market economies will always be emerging, and never become "developed" even if their GDP is larger than that of all the developed nations combined. And, besides, they don't matter.

George Orwell would be proud.

We have always been at war with Eastasia... or Eurasia.

DOW 15,794.08, +165.55 (+1.06%)
NASDAQ 4,125.86, +68.74 (+1.69%)
S&P 1,797.02, +23.59 (+1.33%)
10-Yr Note 100.57, +0.44 (+0.44%) Yield: 2.68%
NASDAQ Volume 1.92 Bil
NYSE Volume 3.75 Bil
Combined NYSE & NASDAQ Advance - Decline: 4216-1466
Combined NYSE & NASDAQ New highs - New lows: 141-44
WTI crude oil: 99.88, +2.04
Gold: 1,262.90, +5.70
Silver: 19.94, +0.008
Corn: 444.25, +1.25

Stocks March Higher Despite NFP Uncertainty

Stocks staged an enormous rally Thursday, just a day before crucial non-farm payroll data from January is to be released.

Friday's employment numbers - expected to be in the range of 185,000 - stand in stark contradiction to December's paltry 74,000 jobs created. While weather has been roundly blamed for everything from auto sales to bond rallies, it may turn out that the weather will not affect payroll data, as the survey week was one that did not contain a severe weather event.

Investors may be gaming the number, figuring that December's figures will almost certainly be upgraded and the potential for two straight disappointments are slim.

On the other hand, since there was little in the way of news or earnings releases to juice today's rally, the huge run-up in stocks may have been due primarily to short-covering, as the bears - fairly fat and sassy of late - may want to be out of the way of such a volatile data set on Friday morning.

In the meantime, nothing much has changed on a global outlook. In fact, a failed bond auction in Ukraine set off some alarm bells and currency issues remain from India to Brazil to Turkey to Argentina to Indonesia. In essence, the Fed's decision to trim $20 billion in total from their monthly bond-purchasing program over the past two months is affecting everyone, everywhere.

That message did not seem to reach the ears of the bulls, at least for one day. Stocks had fallen pretty far in a short period of time, so the old "oversold" rationale has been trotted out as an explanation. For the record, the S&P had fallen about 100 points in just over a month, so, some giveback was to be expected. Same with the Dow, which had surrendered over 1000 points before gaining back about 250 this week.

On the day, volume was light, the advance-decline line was nearly 3:1 positive, but new highs just barely edged new lows, despite the huge, broad-based ramp in stocks. It appeared to be more of a "risk-off" kind of day rather than a serious, fundamental-based rally.

The 10-year note was sold off, registering a yield of 2.70, the highest in over a week. The troubling trend in short-dated maturities remained unresolved, with 3-month and 6-month bills matching up with identical 0.07% yields.

DOW 15,628.53, +188.30 (+1.22%)
NASDAQ 4,057.12, +45.57 (+1.14%)
S&P 1,773.43, +21.79 (+1.24%)
10-Yr Note 100.41, +0.20 (+0.20%) Yield: 2.70%
NASDAQ Volume 1.78 Bil
NYSE Volume 3.77 Bil
Combined NYSE & NASDAQ Advance - Decline: 4003-1691
Combined NYSE & NASDAQ New highs - New lows: 86-70
WTI crude oil: 97.84, +0.46
Gold: 1,257.20, +0.30
Silver: 19.93, +0.123
Corn: 443.00, -0.25