Let's Just Pretend.
That's what Wall Street, the EU and the central bankers of the world want you to do. Pretend.
Pretend there is a way out for Greece. Pretend that the US economy is growing, that the debtsof all nations will eventually be paid off through the magic of "growth," that your future, and that of your kids' will be secure.
None of it is true. The headlines from the likes of Reuters, Bloomberg and Dow Jones only parrot what the elite bankers and corrupt governments feed them. Journalism died during the Bush administration of the 2000s. The rule of law is being killed every day by the likes of the AG settlement, the non-prosecution of anybody involved in the mortgage/robo-signing/foreclosure scams and the constitution has been marginalized by congress and presidential orders.
What makes it even more frightful is that it seems to worsen every day. No statistics can be trusted and the words coming from the mouths of politicians ring hollow and void.
Take just a few of today's news items for instance. President Obama - to great fanfare - proposed new tax rates for businesses in the US. Never mind that they have less chance than Lindsay Lohan giving up drinking of ever being signed into law. Sure, they sound good (if by good you mean that the government is somehow entitled to the ridiculous amount of 28% of you company's net profits), but they will be twisted and broken and flailed about by a congress that knows nothing better than obfuscation, ridicule and deceit.
Then take a look at the January's existing home sales figures released by the NAR. Again, the trumpets blared that real estate is recovering, with the month's sales up 4.2% from December to an unadjusted 4.57 million, annualized (why do they annualize these figures in an age in which numbers can be recorded and crunched in an instant? It's easier to FAKE them that way.). Never mind that distressed properties boosted the number materially or that the rate of deals falling through continues to rise or that mortgage applications fell again this week.
But wait a minute. Last month's number was 4.61 million... Well, that was revised down to 4.38 million. So, that gain in December actually turned out to be a decline. Next month, the NAR can revise the January number down too, so that February shows a gain. It's a con. A shell game. And the American public is the mark.
And then there's the Greek deal, the third bailout for the nation in the past two years. It's not enough that the EU is "loaning" them another $172 billion ($130 billion Euros), but this one comes with various strings attached, such as a special account that requires Greece to pay its creditors before paying its own expenses; a permanent monitoring task force from the European Commission; private investors forced to eat 53.5% of the money they've already loaned (and are not getting back); drastic cuts to pensions, the minimum wage, defense spending, healthcare and public sector jobs; and more.
With these new conditions, Greece, for all intents and purposes, is no longer a sovereign state. Rather, it is a debt-slave, a ward of the European Union. Obviously, centuries of in-breeding among Europe's elite ruling class has taught them well how to subjugate the will of the masses.
But maybe there's hope. Since the signing of the Greek deal on Monday, stocks in Europe have done nothing but decline. There is little faith among professional investors that this arrangement will result in anything more than a temporary reprieve and an ultimate default.
In the US, stocks wandered around for the second straight day, though this time they finally bit the bullet and had to fall. Not by much, but any decline in stocks is a blow to the monied interests and they seem worried about Greece, about the price of gas and about the economy in general. And the volume was again absurdly low, because nobody but the banks, hedge funds and HFTs are playing.
They might even begin to worry that people are sick and tired of being lied to and are beginning to wake up.
Wake up, America. How much longer can these charades continue?
Dow 12,938.67, -27.02 (0.21%)
NASDAQ 2,933.17, -15.40 (0.52%)
S&P 500 1,357.66, -4.55 (0.33%)
NYSE Composite 8,094.39, -21.03 (0.26%)
NASDAQ Volume 1,676,971,875
NYSE Volume 3,608,714,750
Combined NYSE & NASDAQ Advance - Decline: 2032-3589
Combined NYSE & NASDAQ New highs - New lows: 162-24
WTI crude oil: 106.28, +0.03
Gold: 1,771.30, +12.80
Silver: 34.25, -0.18
Wednesday, February 22, 2012
Tuesday, February 21, 2012
Dow Runs at 13,000, Relents, as Oil Tops $106/Barrel; Gold, Silver Rocket Higher
On the heels of a three-day weekend and a late-night session of EU finance ministers which apparently (maybe, sort of, kinda) came to a conclusion on funding for the failed state of Greece, the Dow Jones Industrials were poised to exceed 13,000, a number not seen since May of 2008.
While the Eurocrats dithered, wrangled and finally agreed to a very messy agreement to stave off the imminent default of the Republic of Greece, most Americans were sleeping, though the conditions of the Greek people continued to worsen, seemingly by the hour.
Nonetheless, stocks opened with the usual ebullience afforded the opening of a new week of stock profit pursuits and quickly came within a whisker of the magic 13,000 level, before falling quickly backward at 10:00 am, as the Euro plunged.
Undiscouraged, the monkey algos, which amount for more than 70% of all trades, turned around as the Euro resumed gaining value against the US dollar and the Dow eventually broke through the haloed mark, though just briefly, on three different occasions during the session.
Meanwhile, the price of a barrel of WTI crude oil surpassed $105/barrel and just after 2:30, rang up $106. At that, the market had had enough and the day's rally was quickly over, the Dow - and all of the major averages - falling into the red before recovering slightly into the close for a split finish.
While there is still some guarded optimism over the Greek "deal" struck by the EU ministers, there are more than just a few doubters that the country will ever recover from the depression caused by decades of overspending, cheating on taxes (it's a Greek - and exceedingly a global - way of life) and an overhang of debt that would make even mighty Atlas himself shy from the task of holding aloft the birthplace of democracy.
Stock profiteers aside, there's ample reason to believe that Greece's ongoing tragedy will help pull down the rest of the Eurozone, and with it the global economy, fiat money and eventually, governments. The major economies of the world are playing with fire, printing without remorse nor sufficient moral appreciation of what the aftermath of global inflation will bring.
Today's skittish market turnaround may have been the first chapter in what could be "the great unraveling." Too little has been done - here in the US, in Europe, China and Japan - to address the underlying issues of the great recession, with the economists of the world having come up with no answer other than to simply pile more debt on top of the already enormous mountain of unpayable debts built up during the go-go 90s and moribund 2000s.
If there's any wonder why gold and silver took off today like they were launched out of cannons, the chart below may explain why the now-12-year bull run of the precious metals may just be getting started.
Dow 13,000 may be a pretty number and cause for celebration in some board rooms and on certain stock desks, but it has little to do with the overall health of the economy of any nation. Relentless printing of money, backed by "full faith and credit" has become the norm and we will all be the poorer for it in time and the price of oil is merely the tip of the spear that will pierce all the misconceptions and hopeful tones emanating from Wall Street, the City of London, Shanghai and Tokyo.
Dow 12,965.69, +15.82 (0.12%)
NASDAQ 2,948.57, -3.21 (0.11%)
S&P 500 1,362.21, +0.98 (0.07%)
NYSE Composite 8,115.42, +0.91 (0.01%)
NASDAQ Volume 1,815,109,000
NYSE Volume 3,766,193,750
Combined NYSE & NASDAQ Advance - Decline: 2490-3168
Combined NYSE & NASDAQ New highs - New lows: 260-16 (ridiculous)
WTI crude oil: 105.84, +2.60
Gold: 1,758.50, +32.60
Silver: 34.43, +1.21
While the Eurocrats dithered, wrangled and finally agreed to a very messy agreement to stave off the imminent default of the Republic of Greece, most Americans were sleeping, though the conditions of the Greek people continued to worsen, seemingly by the hour.
Nonetheless, stocks opened with the usual ebullience afforded the opening of a new week of stock profit pursuits and quickly came within a whisker of the magic 13,000 level, before falling quickly backward at 10:00 am, as the Euro plunged.
Undiscouraged, the monkey algos, which amount for more than 70% of all trades, turned around as the Euro resumed gaining value against the US dollar and the Dow eventually broke through the haloed mark, though just briefly, on three different occasions during the session.
Meanwhile, the price of a barrel of WTI crude oil surpassed $105/barrel and just after 2:30, rang up $106. At that, the market had had enough and the day's rally was quickly over, the Dow - and all of the major averages - falling into the red before recovering slightly into the close for a split finish.
While there is still some guarded optimism over the Greek "deal" struck by the EU ministers, there are more than just a few doubters that the country will ever recover from the depression caused by decades of overspending, cheating on taxes (it's a Greek - and exceedingly a global - way of life) and an overhang of debt that would make even mighty Atlas himself shy from the task of holding aloft the birthplace of democracy.
Stock profiteers aside, there's ample reason to believe that Greece's ongoing tragedy will help pull down the rest of the Eurozone, and with it the global economy, fiat money and eventually, governments. The major economies of the world are playing with fire, printing without remorse nor sufficient moral appreciation of what the aftermath of global inflation will bring.
Today's skittish market turnaround may have been the first chapter in what could be "the great unraveling." Too little has been done - here in the US, in Europe, China and Japan - to address the underlying issues of the great recession, with the economists of the world having come up with no answer other than to simply pile more debt on top of the already enormous mountain of unpayable debts built up during the go-go 90s and moribund 2000s.
If there's any wonder why gold and silver took off today like they were launched out of cannons, the chart below may explain why the now-12-year bull run of the precious metals may just be getting started.
Dow 13,000 may be a pretty number and cause for celebration in some board rooms and on certain stock desks, but it has little to do with the overall health of the economy of any nation. Relentless printing of money, backed by "full faith and credit" has become the norm and we will all be the poorer for it in time and the price of oil is merely the tip of the spear that will pierce all the misconceptions and hopeful tones emanating from Wall Street, the City of London, Shanghai and Tokyo.
Dow 12,965.69, +15.82 (0.12%)
NASDAQ 2,948.57, -3.21 (0.11%)
S&P 500 1,362.21, +0.98 (0.07%)
NYSE Composite 8,115.42, +0.91 (0.01%)
NASDAQ Volume 1,815,109,000
NYSE Volume 3,766,193,750
Combined NYSE & NASDAQ Advance - Decline: 2490-3168
Combined NYSE & NASDAQ New highs - New lows: 260-16 (ridiculous)
WTI crude oil: 105.84, +2.60
Gold: 1,758.50, +32.60
Silver: 34.43, +1.21
Friday, February 17, 2012
Freaky Friday: $6 Trillion In Fake Bonds, Euro-Greek Bond Swap; March 23rd Looking Grim
For a Friday, the news flow certainly was heavy.
The morning began with a report out of Italy, that $6 trillion worth of allegedly "fake" US Treasury bonds were seized by Italian police and the US Secret Service along with eight men involved in the counterfeiting and money laundering scam. Authorities said that the individuals arrested were planning to purchase plutonium from Nigeria, a story that has a familiar ring, last used as part of the pretense for going to war with Iraq after 9/11.
This story has all the markings of either a false flag event or wild conspiracy. Details are sketchy, though the assembled mainstream news media has already accepted the idea that the bonds are fakes. Don't expect to hear or see much more about this after today, except from bloggers and investigators outside the mainstream.
The European Central Bank (ECB) swapped its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring. This story also greeted the morning in New York, without much fanfare, except for the press mimicking the officials at the ECB that Greece is moving closer to a resolution of its debt issues before the fateful date of March 20 arrives.
ZeroHedge has a pretty good take on the implications and possible illegalities of the move, which will apparently trigger the collective action clauses (CAC) and also Credit Default Swaps, as it would be a default event. Ooopsie. Could be a cascade coming.
Related, but unconfirmed, is a report that some banks already have documents detailing a March 23 default by Greece in which Greek banks will be closed, accounts frozen and Euro-denominated currency will become worthless in the land of Plato and Aristotle.
March 23 happens to be a Friday, which makes sense, since the report says the major credit agencies will declare Greece in default, and late Friday afternoons, after US markets have closed, seems to be the preferred time for any nasty news from the credit raters.
Late in the day, our normally-inept congress managed to PURPOSELY UNDERFUND THE SOCIAL SECURITY TRUST FUND by passing a bill to extend the roughly-30% cut to employees for the rest of the year and keep unemployment benefits flowing to the millions of Americans who just can't seem to find a good job.
Amid all of this, the stock market looked like a side show, with stocks limping along to yet another positive close - except for the NASDAQ, mostly because Apple finished down 0.09 - on horrifyingly-low volume.
It's tough to make this stuff up, but somebody must be, because financial markets are acting as if they're from another dimension or distant galaxy. The only reasonable correlation that can be assumed these days is that if the Euro is up, so will be US stocks. Oh, and any mention of Iran or the Strait of Hormuz is good for at least another 40-cent move higher in the price of crude, which has retail gasoline now priced at US record levels for February.
Hey, it's a three-day weekend. We can worry about Greece on Tuesday. But, don't drive too much. Could just wreck your budget.
Dow 12,950.10, +46.02 (0.36%)
NASDAQ 2,951.78, -8.07 (0.27%)
S&P 500 1,361.23, +3.19 (0.23%)
NYSE Composite 8,114.51, +22.32 (0.28%)
NASDAQ Volume 1,972,077,750
NYSE Volume 3,675,412,000
Combined NYSE & NASDAQ Advance - Decline: 3082-2535
Combined NYSE & NASDAQ New highs - New lows: 303-12 (0 new lows on NYSE. WOW!)
WTI crude oil: 103.24, +0.93
Gold: 1,725.90, -2.50
Silver: 33.22, -0.15
The morning began with a report out of Italy, that $6 trillion worth of allegedly "fake" US Treasury bonds were seized by Italian police and the US Secret Service along with eight men involved in the counterfeiting and money laundering scam. Authorities said that the individuals arrested were planning to purchase plutonium from Nigeria, a story that has a familiar ring, last used as part of the pretense for going to war with Iraq after 9/11.
This story has all the markings of either a false flag event or wild conspiracy. Details are sketchy, though the assembled mainstream news media has already accepted the idea that the bonds are fakes. Don't expect to hear or see much more about this after today, except from bloggers and investigators outside the mainstream.
The European Central Bank (ECB) swapped its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring. This story also greeted the morning in New York, without much fanfare, except for the press mimicking the officials at the ECB that Greece is moving closer to a resolution of its debt issues before the fateful date of March 20 arrives.
ZeroHedge has a pretty good take on the implications and possible illegalities of the move, which will apparently trigger the collective action clauses (CAC) and also Credit Default Swaps, as it would be a default event. Ooopsie. Could be a cascade coming.
Related, but unconfirmed, is a report that some banks already have documents detailing a March 23 default by Greece in which Greek banks will be closed, accounts frozen and Euro-denominated currency will become worthless in the land of Plato and Aristotle.
March 23 happens to be a Friday, which makes sense, since the report says the major credit agencies will declare Greece in default, and late Friday afternoons, after US markets have closed, seems to be the preferred time for any nasty news from the credit raters.
Late in the day, our normally-inept congress managed to PURPOSELY UNDERFUND THE SOCIAL SECURITY TRUST FUND by passing a bill to extend the roughly-30% cut to employees for the rest of the year and keep unemployment benefits flowing to the millions of Americans who just can't seem to find a good job.
Amid all of this, the stock market looked like a side show, with stocks limping along to yet another positive close - except for the NASDAQ, mostly because Apple finished down 0.09 - on horrifyingly-low volume.
It's tough to make this stuff up, but somebody must be, because financial markets are acting as if they're from another dimension or distant galaxy. The only reasonable correlation that can be assumed these days is that if the Euro is up, so will be US stocks. Oh, and any mention of Iran or the Strait of Hormuz is good for at least another 40-cent move higher in the price of crude, which has retail gasoline now priced at US record levels for February.
Hey, it's a three-day weekend. We can worry about Greece on Tuesday. But, don't drive too much. Could just wreck your budget.
Dow 12,950.10, +46.02 (0.36%)
NASDAQ 2,951.78, -8.07 (0.27%)
S&P 500 1,361.23, +3.19 (0.23%)
NYSE Composite 8,114.51, +22.32 (0.28%)
NASDAQ Volume 1,972,077,750
NYSE Volume 3,675,412,000
Combined NYSE & NASDAQ Advance - Decline: 3082-2535
Combined NYSE & NASDAQ New highs - New lows: 303-12 (0 new lows on NYSE. WOW!)
WTI crude oil: 103.24, +0.93
Gold: 1,725.90, -2.50
Silver: 33.22, -0.15
Thursday, February 16, 2012
Stocks Scream Higher on Positive Economic Data
This one will practically write itself.
Stocks were buoyed today by falling initial unemployment claims (down to 348,000 after 361,000 last week), rising housing starts (699K) and building permits (676K), and a very tame PPI number of 0.01. The Phialdelphia Fed's survey of regional economic activity was also up, to 10.2 in February from 7.3 in January.
All of this good news - and the absence of anything untoward from Europe - sent stocks on a day long rally that just kept rising steadily throughout the session. Naturally, the Euro was higher, as that correlation remains wholly intact.
Whether or not one agrees with the numbers, Wall Street made sure to boost stocks one day before options expiry, which may have been the plan all along, since there aren't enough individual investors or opinions other than those espoused by the powers that be, to matter.
Never mind what I said yesterday about the possibility of a nasty correction and repeat after me: "the market must go higher."
The original JP Morgan would be flummoxed. Once, when hounded by rabid reporters asking what the market would do, Morgan casually tossed out an all-time classic. "The market will fluctuate," he said.
We sure could use a dose of Mr. Morgan's common sense, or, at least a few of the silver dollars named after him.
Keep in mind that this is an election year, so that whatever outcome has already been determined, the markets will provide the proper narrative. It appears that Barack Obama is their guy, so it should surprise nobody if unemployment is at 7.3% come November 2nd and the GDP is growing at 3 1/2 - 4%, no matter how convoluted the exercise to get to those numbers.
Which leads to another great quote: "There are three kinds of lies: lies, damned lies, and statistics." The phrase was popularized by Mark Twain, who attributed it to Benjamin Disraeli, though the quote never appears in any of Disraeli's published works.
Could Twain have made it up himself? After all, his real name was Samuel Clemens.
And, by the way, since the US seems intent on making Iran a whipping boy, $4/gallon gas is coming, sooner, not later, just in time to eat up the payroll tax cut extension which the congress agreed to this morning and will likely pass on Friday. No free lunch, kiddies.
Dow 12,904.08, +123.13 (0.96%)
NASDAQ 2,959.85, +44.02 (1.51%)
S&P 500 1,358.04, +14.81 (1.10%)
NYSE Composite 8,092.61, +93.96 (1.17%)
NASDAQ Volume 1,890,777,750
NYSE Volume 4,022,471,250
Combined NYSE & NASDAQ Advance - Decline: 4275-1405
Combined NYSE & NASDAQ New highs - New lows: 230-16
WTI crude oil: 102.31, +0.51
Gold: 1,728.40, +0.30
Silver: 33.37, -0.04
Stocks were buoyed today by falling initial unemployment claims (down to 348,000 after 361,000 last week), rising housing starts (699K) and building permits (676K), and a very tame PPI number of 0.01. The Phialdelphia Fed's survey of regional economic activity was also up, to 10.2 in February from 7.3 in January.
All of this good news - and the absence of anything untoward from Europe - sent stocks on a day long rally that just kept rising steadily throughout the session. Naturally, the Euro was higher, as that correlation remains wholly intact.
Whether or not one agrees with the numbers, Wall Street made sure to boost stocks one day before options expiry, which may have been the plan all along, since there aren't enough individual investors or opinions other than those espoused by the powers that be, to matter.
Never mind what I said yesterday about the possibility of a nasty correction and repeat after me: "the market must go higher."
The original JP Morgan would be flummoxed. Once, when hounded by rabid reporters asking what the market would do, Morgan casually tossed out an all-time classic. "The market will fluctuate," he said.
We sure could use a dose of Mr. Morgan's common sense, or, at least a few of the silver dollars named after him.
Keep in mind that this is an election year, so that whatever outcome has already been determined, the markets will provide the proper narrative. It appears that Barack Obama is their guy, so it should surprise nobody if unemployment is at 7.3% come November 2nd and the GDP is growing at 3 1/2 - 4%, no matter how convoluted the exercise to get to those numbers.
Which leads to another great quote: "There are three kinds of lies: lies, damned lies, and statistics." The phrase was popularized by Mark Twain, who attributed it to Benjamin Disraeli, though the quote never appears in any of Disraeli's published works.
Could Twain have made it up himself? After all, his real name was Samuel Clemens.
And, by the way, since the US seems intent on making Iran a whipping boy, $4/gallon gas is coming, sooner, not later, just in time to eat up the payroll tax cut extension which the congress agreed to this morning and will likely pass on Friday. No free lunch, kiddies.
Dow 12,904.08, +123.13 (0.96%)
NASDAQ 2,959.85, +44.02 (1.51%)
S&P 500 1,358.04, +14.81 (1.10%)
NYSE Composite 8,092.61, +93.96 (1.17%)
NASDAQ Volume 1,890,777,750
NYSE Volume 4,022,471,250
Combined NYSE & NASDAQ Advance - Decline: 4275-1405
Combined NYSE & NASDAQ New highs - New lows: 230-16
WTI crude oil: 102.31, +0.51
Gold: 1,728.40, +0.30
Silver: 33.37, -0.04
Wednesday, February 15, 2012
Numbers Racket: Greece, Euro, Apple, Transports and 100 Dow Points
Let's get real here.
Raise your hand if you think Greece is NOT going to default.
Very well. Maybe the rest of you with hands on hips or in pockets will appreciate the news out of Europe this morning, which somehow managed to pump futures toward a strong positive opening.
What's that? Even though Dow futures were up more than 80 points before former Treasury Secretary Hank (martial law) Paulson appeared on CNBC for the usual softball interview and were up 47 points just seconds before the open, the Dow only managed an initial gain of... hmmmm, less than 20 points.
Eurozone's 17 nations' (non) growth rate for the 4th quarter of 2011 was -0.3, the only countries showing gains in GDP growth being France and Slovakia.
Five countries in europe are already in recession. No surprise here, as Greece, Belgium, the Netherlands, Portugal and Italy have experienced two consecutive quarters of GDP decline. The one country everyone has an eye on is Germany, where output for the quarter fell by 0.2%, because the Germans have been the only country in the region showing any sign of elasticity and ability to weather the financial storms.
However, the rest of the Eurozone is dragging Germany's usually strong industrial sector down with the rest of the continent, a development that could prove disastrous as the EU plods through a troubling 2012.
Stocks took a spanking today in the US after the aforementioned recession news and then the communique out of Brussels from the esteemed EU finance ministers (a Baptist minister, a Catholic priest and an EU finance minister walk into a bar... oh, never mind) reminded the assembled money watchers worldwide that they are experts at procrastination and posturing.
While yesterday's commitment letter from Greek conservative leader Antonis Samaras stated that he would go along with the proposed - and passed by the Greek parliament - austerity measures, the potential future leader of Greece (give him about 6 months before he is bought off and retires, if he even wins the April race for Premier) contained a small caveat, saying he might reconsider, once, of course, the authorities deliver the 130 billion (or maybe it's more like 202 billion) Euros promised by the supra-government of the EU.
What happened today could best be described as controlled demolition. While the Dow was subsumed, hovering from 15 to 35 points in the red, the NASDAQ was wildly positive, though 90% of the gain was due to just one stock, Apple (APPL), which exploded in a number of ways on the day.
First, Apple rocketed to an all-time high of 526.29, but closed the day at the somewhat pedestrian level of 497.67. That's a pretty big round-turn, even for a stock with such a heady valuation. The decline was magnificent, falling 20 points in just the noon hour, and stumbling to a nearly 12-point loss in the remainder of the day. Volume was more than four times the average daily volume (12 million shares) at 53,457,212.
But Apple was just the NASDAQ story. The Dow charted its own path, guided by the Euro-dollar trade. The Euro slumped and finished below the psychotic 131 level, a number which is absolutely meaningless unless you're swapping currencies or considering travel to the doomed continent. But, stocks have followed the Euro-Dollar relationship like clockwork this year. Euro up, US stocks up, with the converse also true. The real value of the ephemeral Euro is all in the mind and to which equally worthless paper currency to which you compare it. If one would be so bold to compare it to some commodity - say, gold - well, a Euro won't buy you a single grain and it's gotten worse throughout its 11+ year life with each turning of the calendar.
So, the Dow set down at the close with its worse loss of 2012, which is not so much a surprise, being that the index (and all the other majors) has overheated in what has been an unusually-warm winter. But the Dow could just not surrender 100 points on the day, despite it being down 125 points at its worst level and down 108 points only one minute prior to the close. Perhaps that number (-100) has meaning to some people, but for the rest of us, -97.33 will just have to do.
What is alarming and scary (like Europe isn't enough of a fear factor) is the action in the Dow Transports, which suffered a two percent decline on the day, easily outstripping the widely-followed indices.(please have a gander at the 1 year chart with the 80% down-spike in November)
Another unpleasant thought concerns the timing of this week's reversal of fortune, just two days prior to options expiry, normally the strongest and upward-tilted week of any month in this Ponzi-like market scheme. Today's volume was also quite strong across all indices.
If stocks aren't making gains just prior to options expiry, then something very wrong is happening behind the scenes. It could be as simple as the market being overbought, or waking up to the awful European reality or the threat of war with Iran which looms larger each passing day.
Then again, it could just be that the low level of market participation has the major traders now drooling over each other's lunches. US stocks have been on a tear since October and the time and sentiment are ripe for a nasty correction.
A clue could come the day the Dow closes with a loss of more than 100 points, though that might prove to be a day too late and many billions of dollars short. Today's near-100-point loss should provide more than enough caution to everyone.
Keep a close eye on gold, and especially, silver, which has underperformed for the past two weeks. Any sustained gains in the precious metals should serve notice that there's something big brewing.
Dow 12,780.95, -97.33 (0.76%)
NASDAQ 2,915.83, -16.00 (0.55%)
S&P 500 1,343.23, -7.27 (0.54%)
NYSE Composite 7,998.65, -30.97 (0.39%)
NASDAQ Volume 2,036,710,750
NYSE Volume 4,045,495,750
Combined NYSE & NASDAQ Advance - Decline: 2267-
Combined NYSE & NASDAQ New highs - New lows: 264-23
WTI crude oil: 101.80, +1.06
Gold: 1,728.10, +10.40
Silver: 33.41, +0.06
Raise your hand if you think Greece is NOT going to default.
Very well. Maybe the rest of you with hands on hips or in pockets will appreciate the news out of Europe this morning, which somehow managed to pump futures toward a strong positive opening.
What's that? Even though Dow futures were up more than 80 points before former Treasury Secretary Hank (martial law) Paulson appeared on CNBC for the usual softball interview and were up 47 points just seconds before the open, the Dow only managed an initial gain of... hmmmm, less than 20 points.
Eurozone's 17 nations' (non) growth rate for the 4th quarter of 2011 was -0.3, the only countries showing gains in GDP growth being France and Slovakia.
Five countries in europe are already in recession. No surprise here, as Greece, Belgium, the Netherlands, Portugal and Italy have experienced two consecutive quarters of GDP decline. The one country everyone has an eye on is Germany, where output for the quarter fell by 0.2%, because the Germans have been the only country in the region showing any sign of elasticity and ability to weather the financial storms.
However, the rest of the Eurozone is dragging Germany's usually strong industrial sector down with the rest of the continent, a development that could prove disastrous as the EU plods through a troubling 2012.
Stocks took a spanking today in the US after the aforementioned recession news and then the communique out of Brussels from the esteemed EU finance ministers (a Baptist minister, a Catholic priest and an EU finance minister walk into a bar... oh, never mind) reminded the assembled money watchers worldwide that they are experts at procrastination and posturing.
While yesterday's commitment letter from Greek conservative leader Antonis Samaras stated that he would go along with the proposed - and passed by the Greek parliament - austerity measures, the potential future leader of Greece (give him about 6 months before he is bought off and retires, if he even wins the April race for Premier) contained a small caveat, saying he might reconsider, once, of course, the authorities deliver the 130 billion (or maybe it's more like 202 billion) Euros promised by the supra-government of the EU.
What happened today could best be described as controlled demolition. While the Dow was subsumed, hovering from 15 to 35 points in the red, the NASDAQ was wildly positive, though 90% of the gain was due to just one stock, Apple (APPL), which exploded in a number of ways on the day.
First, Apple rocketed to an all-time high of 526.29, but closed the day at the somewhat pedestrian level of 497.67. That's a pretty big round-turn, even for a stock with such a heady valuation. The decline was magnificent, falling 20 points in just the noon hour, and stumbling to a nearly 12-point loss in the remainder of the day. Volume was more than four times the average daily volume (12 million shares) at 53,457,212.
But Apple was just the NASDAQ story. The Dow charted its own path, guided by the Euro-dollar trade. The Euro slumped and finished below the psychotic 131 level, a number which is absolutely meaningless unless you're swapping currencies or considering travel to the doomed continent. But, stocks have followed the Euro-Dollar relationship like clockwork this year. Euro up, US stocks up, with the converse also true. The real value of the ephemeral Euro is all in the mind and to which equally worthless paper currency to which you compare it. If one would be so bold to compare it to some commodity - say, gold - well, a Euro won't buy you a single grain and it's gotten worse throughout its 11+ year life with each turning of the calendar.
So, the Dow set down at the close with its worse loss of 2012, which is not so much a surprise, being that the index (and all the other majors) has overheated in what has been an unusually-warm winter. But the Dow could just not surrender 100 points on the day, despite it being down 125 points at its worst level and down 108 points only one minute prior to the close. Perhaps that number (-100) has meaning to some people, but for the rest of us, -97.33 will just have to do.
What is alarming and scary (like Europe isn't enough of a fear factor) is the action in the Dow Transports, which suffered a two percent decline on the day, easily outstripping the widely-followed indices.(please have a gander at the 1 year chart with the 80% down-spike in November)
Another unpleasant thought concerns the timing of this week's reversal of fortune, just two days prior to options expiry, normally the strongest and upward-tilted week of any month in this Ponzi-like market scheme. Today's volume was also quite strong across all indices.
If stocks aren't making gains just prior to options expiry, then something very wrong is happening behind the scenes. It could be as simple as the market being overbought, or waking up to the awful European reality or the threat of war with Iran which looms larger each passing day.
Then again, it could just be that the low level of market participation has the major traders now drooling over each other's lunches. US stocks have been on a tear since October and the time and sentiment are ripe for a nasty correction.
A clue could come the day the Dow closes with a loss of more than 100 points, though that might prove to be a day too late and many billions of dollars short. Today's near-100-point loss should provide more than enough caution to everyone.
Keep a close eye on gold, and especially, silver, which has underperformed for the past two weeks. Any sustained gains in the precious metals should serve notice that there's something big brewing.
Dow 12,780.95, -97.33 (0.76%)
NASDAQ 2,915.83, -16.00 (0.55%)
S&P 500 1,343.23, -7.27 (0.54%)
NYSE Composite 7,998.65, -30.97 (0.39%)
NASDAQ Volume 2,036,710,750
NYSE Volume 4,045,495,750
Combined NYSE & NASDAQ Advance - Decline: 2267-
Combined NYSE & NASDAQ New highs - New lows: 264-23
WTI crude oil: 101.80, +1.06
Gold: 1,728.10, +10.40
Silver: 33.41, +0.06
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