No Rest for the Wicked (or Corrupt, or Criminal); Beige Book Sinks Stocks

No news out of Europe to goose or grouse the markets? No problem, the Fed's October Beige Book provided yet another dim view of current financial, business and economic conditions across the United States.

As one might expect, the reporting in the 12 Federal Reserve districts was mixed, with business conditions showing slight improvement in most, but housing and employment remaining weak across most. Here is a good summary of each of the districts, from Dow Jones Newswires.

That was about all that mattered. CPI showed a jump of 0.3% in consumer prices, while the housing market showed a mixed picture. The Mortgage Bankers Association saw a 14.9% decline in mortgage applications in the most recent week (ended October 14) for new purchases and refinancing combined. Housing starts shot up to 658K in September after reporting only 572K in August, the figures based on an annualized model.

However, building permits dropped from 625K in August to 594K in September, suggesting a slight contraction in new home construction.

A huge drawdown in crude inventories last week of 4.729M barrels caused oil prices to dive, citing weaker than normal demand as the cause.

In a best-case scenario, most economists believe that the US will not suffer another recession, though growth remains flat to slightly improved. That is why the banking and debt crisis in Europe moves the markets. If Europe cannot solve its problems, there would be enough of a contagion to effect the US economy negatively.

The NASDAQ took the biggest hit on the day, following Apple's (AAPL) earnings miss, reported after the closing bell on Tuesday.

Dow 11,504.62, -72.43 (0.63%)
NASDAQ 2,604.04, -53.39 (2.01%)
S&P 500 1,209.88, -15.50 (1.26%)
NYSE Composite 7,240.26, -101.47 (1.38%)
NASDAQ Volume 2,013,483,875.00
NYSE Volume 4,869,994,500
Combined NYSE & NASDAQ Advance - Decline: 1752-4763
Combined NYSE & NASDAQ New highs - New lows: 82-43
WTI crude oil: 86.11, -2.23
Gold: 1,647.00, -5.80
Silver: 31.28, -0.55

Market Pops on Bogus ESFS Euro Report; Apple Misses, Tanks

You've got to love this market.

Any little statement or rumor that European Union leaders might throw significant money at their pan-continental debt crisis sends stocks soaring into the stratosphere, and today was one for the record books.

An unusually quiet day, stocks had regained a foothold after Monday's sudden reversal. But, shortly after 3:00 pm EDT, the UK's Guardian reported that France and Germany had agreed to boost the Euro bailout fund - the ESFS - to EURO 2 Trillion, a significant rise, and one that might just help kick the debt can down the road a few months, or even years.

Shortly after the story broke, however, Dow Jones reported that the 2 Trillion Euro figure was actually "still under debate," so, who really knows? At least the market machines and mechanics got what they wanted, a nice 100-point spike in the Dow in about ten minutes time and an S&P close over 1224. Mission accomplished. Now, move along, folks, nothing to see here.

In a day (week, month, year) full of bogus reports, before the open, Bank of America (BAC) reported 3Q earnings of 57 cents per share, but, because of the new math, which includes such exotic flavors as fair value adjustments on structured liabilities and trading Debit Valuation Adjustments (DVA), according to our friends at Zero Hedge, who usually have the best and most-believable dirt, BofA actually had earnings of 0.00, otherwise known as ZERO, Zilch, Nada, Nothing.

Of course, when CNBC and the rest of the supine financial media report, bare-faced, that the nation's largest bank by deposits more than doubled the analyst estimates (0.21) for the quarter, it was off to the races, with somebody shocking BAC shares up 10% by day's end, a stunning 0.61 gain, to the imposing figure of 6.62. While it's technically a 10% gain, it's still rather silly, considering the accounting nonsense being roundly applauded by the criminal bankster elite, and hardly any comfort to those who bought BAC when it was 7, or 8 or even 12. Make no mistake, we've entered the Twilight Zone of financial accounting and there's no turning back.

Along those lines, the Giant Squid otherwise known as Goldman Sachs (GS), also reported before the bell, but it's results were almost believable, showing a loss of 84 cents per share, with losses spread across the company's proprietary trading division, to the tune of $2.5 billion. Ouch. The market's response to the trending data of a company heading decidedly south: a gain of 5.25 (5%) to 102.25 and the financials led all other sectors in the faux rally du jour.

Also before the bell, PPI was reported to be up 0.8% in September on expectations of a rise of only 0.2%, which just happened to be how much the core PPI was up for the month. Somebody obviously missed the memo from the Fed that inflation was transitory, or something along those lines. Inflation in the US is running at an annual rate well over 6%, something the mainstream media hopes you don't notice.

One company which may be adversely affected by the loss of its CEO - the truly brilliant Steve Jobs - is Apple, which announced today after the bell that the company had an outstanding quarter as usual, but, uh, oh, they missed the estimates of 7.39 per share by a bit, reporting earnings for the quarter of 7.05 per share and also came up about a billion dollars short on the revenue end.

As of this writing, Apple shares were trading at 394.13, -28.11 (-6.66%). Not a very pretty picture there.

So, to recap, Goldman Sachs reports a massive loss, Bank of America releases what amounts to a fraudulent earnings report, inflation is about ready for lift-off into hyper-inflation and the market gets a jolly from a questionable report on the size of the European bailout fund. All good fun, no?

With Apple's miss in the after-hours and another couple of big banks - Morgan Stanley (MS) and PNC Financial Services (PNC) - due to report tomorrow, somebody might want to take a closer look at the number of companies that have missed or merely met estimates this earnings season, and maybe add in those who just plain fudged the numbers. But, not to worry, Cheesecake Factory (CAKE) and Buffalo Wild Wings (BWLD) are also reporting tomorrow and should provide sufficient caloric excess to fuel another rally in the markets.

Wow! You cannot make this stuff up.

Dow 11,577.05, +180.05 (1.58%)
NASDAQ 2,657.43, +42.51 (1.63%)
S&P 500 1,225.38, +24.52 (2.04%)
NYSE Composite 7,341.73, +153.07 (2.13%)
NASDAQ Volume 1,988,896,750
NYSE Volume 5,669,232,500
Combined NYSE & NASDAQ Advance - Decline: 5211
Combined NYSE & NASDAQ New highs - New lows: 52-65 (Really? No kidding. extremely bearish)
WTI crude oil: 88.34, +1.96
Gold: 1,652.80, -23.80
Silver: 31.83, +0.01

G20, Merkel, Wells Fargo, Citigroup, NY ManuafacturingSink Stocks

Well, those last two weeks were certainly fun if you were long equities, so get ready for two weeks of pain, as that seems to be the general pattern of our over-hyped, over-controlled and manipulated crony capitalism markets.

Stocks have run up and down in a range on the S&P 500 from a low of 1099 to a high of 1224 since August 4th, after stocks took a tumble from their late-July highs. Volatility has been unusually high during the period, as uncertainty over US debt, European solvency and the continued threat of global recession weight on investors and speculators.

Starting on Saturday with the ludicrous demands of the G20 central bankers and finance ministers that Europe fix its debt problems by October 23, news flow has once again turned decidedly negative. Upon hearing the dictates from the G20 that leaders attending the European Union summit, "decisively address the current challenges through a comprehensive plan," Germany's chancellor, Angela Merkel, quickly tamped down expectations through spokesman Steffan Seibert, stating that "the dreams that are emerging again, that on Monday everything will be resolved and everything will be over will again not be fulfilled."

Those were the news items facing stocks in New York as the opening bell approached, but, prior to the regular casino-esque ring-a-ling at 9:30 am EDT, a couple of banks released third quarter earnings that sent futures lower. First up was Citigroup (C), which announced earnings of $1.23 per share on analyst expectations of 88 cents. At first glance, the quarter seemed positive, but accounting gimmicks provided most of the (mostly) phantom revenue.

The results included a pretax gain of $1.9 billion, or 39 cents per share after taxes, due to the bank's widening credit spreads during the quarter. When a bank's debt weakens relative to U.S. Treasuries, it can record an accounting gain because it could theoretically profit from buying back its own debt. Along with the idea that the bank was making money on its own worsening credit risk, Citi also lowered loan-loss reserves, further fluffing the quarterly profit picture.

Initially, investors bought into the grand scheme, sending the stock higher in early trading, but by the end of the day, the ruse had been found out and Citigroup stock sold off by 0.47, ending the session close to its lows, at 27.93.

Wells Fargo (WFC) came out with its earnings right after Citigroup, and though the numbers were more straightforward, the overall picture was dim. The bank said it earned 72 cents per share in the quarter, a penny below consensus estimates. Even though it was an improvement of 21%, revenue was down and the company lowered loan-loss reserved by $800 million, boosting the numbers. Traders sold off the company stock to the tune of a nearly 8.5% loss, ending the day down 2.25, at 24.42.

As if the bad reports from two of the nation's largest banks wasn't enough, New York state's empire manufacturing index continued to scrape along the bottom, posting -8.48 for October after a reading of -8.82 in September. Readings on national capacity utilization and industrial production returned basically flat.

Stocks sold off right at the open and continued a slow, painful decline throughout the remainder of the session. If the whole idea of the rally from the past two weeks was to sell off into options expiration on Friday, the downbeat news arrived right on time.

Even IBM, which reported after the close, could not garner any support. Big Blue was off almost 4% in after-hours trading, following their reported narrow beats on earnings and revenue.

Two more big banks report tomorrow and their 3rd quarters ought to be real doozies. Goldman sachs is expected to post a loss for the quarter, while Bank of America can float out whatever numbers it chooses. Nobody will believe any of them.

Dow 11,397.00 247.49 (2.13%)
NASDAQ 2,614.92 52.93 (1.98%)
S&P 500 1,200.86 23.72 (1.94%)
NYSE Compos 7,188.66 161.80 (2.20%)
NASDAQ Volume 1,711,161,000.00
NYSE Volume 4,203,815,500
Combined NYSE & NASDAQ Advance - Decline: 1322-5177
Combined NYSE & NASDAQ New highs - New lows: 38-47
WTI crude oil: 86.32, -0.48
Gold: 1,676.60, -6.40
Silver: 31.82, -0.35

Payment Processing for Small Business

In order to keep one's business functioning smoothly, with so many different ways consumers spend and receive money, a variety of payment processing services and products are key to prospering in a rapidly-changing environment.

The primary ways people pay are cash and credit/debit cards, so a if a business has retail space it must also have robust POS systems capable of handing all manner of transactions smoothly and seamlessly, and, hopefully, all though one provider. Choice and flexibility are what consumers seek in their payment options.

That means merchants should rely on not many, but one single company to handle all credit/debit card transactions - online, by phone or in-house - with credit card processing services that won't confuse your customers or employees and can provide detailed, instantaneous processing and also offer the merchant an interface for reviewing and downloading transaction report data.

Along with credit-debit card POS systems and processing services, any business handling cash might want to investigate the availability of having ATM machines at retail locations, again providing the customer with choice, while at the same time helping to increase add-on sales. The ability to access additional cash while still inside the merchant location spurs impulse buying and helps bring in extra foot traffic with potential cash in hand.

Today's business challenges are various and complex, but there's no need for business owners or managers to make their lives more difficult by choosing more than one provider for payment services and products. While it's anathema to business to have only one main customer, when it comes to payment processes, having one source for everything from credit to cash to analytics is not only desirable, but ultimately, profitable.

Another Low Volume Upswing

Well, somebody's making money, but there aren't very many people trading. Volume today was among the lowest of the year, and it's supposed to be busy.

Call it what you like, but a 166-point move on the Dow on near-record-low volume, to most experts, is absolutely meaningless and not likely to retain value for long. This market is so full of hope, desperation and inside dealings one could easily assume the only traders left will soon be gnashing at each other's flesh over the few bones left to be picked over.

Of course, this continuing ramp-up on the major averages come just days before the major banks release third quarter earnings next week, among them Citi, Bank of America, Goldman Sachs, Wells Fargo, PNC and Morgan Stanley. JP Morgan Chase already released their third quarter results and they were nothing if not laughable, so full of accounting gimmickry and false statements it's amazing anybody would hold even one share of this global disaster.

Sure, let's buy Apple at over $400 per share, or Google at $600. Most of us would rather stuff it in a mattress, which is the thought around the current war being waged on SAVERS, by SPECULATORS. There is no opportunity to actually earn interest in a savings plan, whether it be in treasuries, money markets, CDs or any other, so-called "safe" strategic asset. And the pundits, like the Reverend Jim Cramer, who say to buy high-yielding industrials, are whistling past the grave, because a stock like Coca-Cola (KO) sporting a 2.8% dividend and trading currently in the mid-to-high 60s, only has to lose two to three points in order to wipe out all of that dividend income. When the eventual market crash comes, the dividend checks cashed over the years will look truly pathetic to the lost value in the stock itself, and thus, your capital has been wasted, your savings destroyed.

Since the global banking cartel, in association with the spendthrift governments of the world, now control just about all major markets, including commodities such as oil, gold and silver, there is literally nowhere to invest safely except in unknown penny stocks or completely local. That's right, you're probably better off loaning the kid down the street $5000 to get his computer repair business off the ground than sinking your hard-earned-and-eventually-taxed-out-of-existence money into any Wall Street-related stock or scheme, and today's absurdly low volume on top of many previous ridiculously low volume days over the past year proves that people have not only lost money with Wall Street, but are rapidly losing their patience - see the Occupy Wall Street movement - and their interest in the future of big business in America.

As has been said before on this blog, the current economic climate is ripe for collapse, and the only investments should be in tools of trades and basic survival equipment. There's probably a good opportunity in firewood upcoming this winter, as the control fraud in heating oil and natural gas will bury even more families this winter under unbearable expense.

It is distressing, to say the least, to watch the European leaders lie about having a plan, making a plan, preparing a plan to save the continent when in reality all they can do is what the Federal Reserve is so expert at: printing more money and devaluing the currency.

And one final word, on this Herman Cain and his idiotic 9-9-9 plan which includes a 9% income tax, a 9% corporate tax and a 9% national sales tax. To put it into the words of somebody I know and love well, "this plan is another way for the rich to get richer and the poor poorer. Most of the people in the higher tax brackets love it because they're paying something North of 35% presently in income tax, and many of them have businesses paying a 35% corporate income tax. On the other end, the people who will be most damaged by this stupid gimmick of a plan will be the poor and middle class, who already pay no tax because they don't make enough money and would have to pay an additional 9% sales tax on top of the state sales tax they're already having ripped from their hands by incompetent state governments.

What is truly amazing about Herman Cain is that he is a front-runner for the Republicans on the basis of this plan. A Herman Cain presidency would plunge 2/3rds of the nation into abject poverty, and maybe that's part of the plan, to turn America into another stinking third world backwater. They're doing a pretty good job on it so far. Mr. Cain is about as fit to be president as Charlie Sheen. Actually, Charlie might not do such a bad job. At least his press conferences would be #winning events.

What a country, full of liars and thieves at the very pinnacle of business and politics.

Dow 11,644.49, +166.36 (1.45%)
NASDAQ 2,667.85, +47.61 (1.82%)
S&P 500 1,224.58, +20.92 (1.74%)
NYSE Composite 7,350.46, +121.38 (1.68%)
NASDAQ Volume 1,687,163,000
NYSE Volume 4,057,578,000
Combined NYSE & NASDAQ Advance - Decline: 5103-1362
Combined NYSE & NASDAQ New highs - New lows: 52-32
WTI crude oil: 86.80, +2.57 (Why?)
Gold: 1,683.00, +14.50
Silver: 32.17, +0.51