While the world awaits an edict from the high halls of the Federal Reserve on Wednesday, when the FOMC concludes their two day meeting and announces no change in the federal funds rate, investors appear increasingly nervous, not over the expected nothingness dictum from the Fed, but from the overall malaise that has captured markets, otherwise known as stagnation.
What capitalists fear more than anything else is an economy going backwards. What we have today is an economy at stall speed, needing only the slightest of nudges to fall into recession. The US is not alone in these fears; most of Europe is teetering on the brink of a receding growth curve, and this time, there is not enough left of policy maneuvers by central bankers in the EU, Japan, China, or anywhere else in the developed or underdeveloped world, should a recession occur, to keep it from becoming a global depression.
Lessons learned from the near-collapse of the global economy in 2008-09 are that stimuli only is a short-term fix, QE is a waste of money, and lower interest rates do not stir a dormant economy. In essence, the world's central bankers are out of ideas and have been for some time. They are, and have been, pushing on a string, kicking a can down a road, keeping their fingers crossed, and hoping for an economic miracle all at the same time.
Nothing has worked. Nothing will work... until the economies of both the developed world and underdeveloped world purge themselves of debt, stop trying to implement policies that clearly do not work, go back to money backed by something other than empty promises, and stop allowing governments to run up enormous deficits serviced by ever-lower interest payments (debasing the currency all the way along).
Those are just for starters. The world finds itself on the cusp of economic, societal and philosophical revolution. Ordinary people are fed up with government, the media, and various other institutions supposedly in place to provide for the public weal. They are tired of lies, cheating at the highest levels, institutional regulatory strangulation, higher and higher taxes, and an endless stream of regulations that have stripped away their liberties and much of what some may have previously called the "good life."
The few people currently in power are only interested in keeping and maintaining their control over the populations and their power and positions. They are being seriously questioned by populations who feel betrayed, unappreciated and desperate for relief from the very governments and institutions which are supposed to improve their lives, not impoverish them.
Therefore, stocks continue to wallow. And though today's declines are not noteworthy in and of themselves, there's a growing chorus of discontent that continues to rise.
The policies and practices of the past 20 or 30 years cannot continue indefinitely.
The time is coming for major change.
Today's Dippity-Do:
S&P 500: 2,075.32, -3.74 (0.18%)
Dow: 17,674.82, -57.66 (0.33%)
NASDAQ: 4,843.55, -4.89 (0.10%)
Crude Oil 48.56 -0.65% Gold 1,287.90 +0.08% EUR/USD 1.1208 -0.71% 10-Yr Bond 1.61 -0.31% Corn 435.25 +1.22% Copper 2.04 -0.46% Silver 17.40 -0.25% Natural Gas 2.89 -0.86% Russell 2000 1,147.09 -0.31% VIX 20.54 -2.05% BATS 1000 20,677.17 0.00% GBP/USD 1.4109 -0.74% USD/JPY 106.1300 -0.03%
Tuesday, June 14, 2016
Monday, June 13, 2016
Markets Lower On Brexit And Rate Hike Fears
Of the various events that might cause investors to give pause to buying stocks, or, worse, start selling en masse, the two most terrifying are probably the threat of the UK leaving the European Union (aka, Brexit) and the ongoing dialogue from the Federal Reserve concerning raising the federal funds rate.
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
Between the two, a 25 basis point rise in rates is likely the more disruptive, but it is also the least plausible, at least for the foreseeable future.
The Fed meets on Tuesday and Wednesday, delivering their rate announcement at 2:00 pm EDT Wednesday, after which will be a press conference with Chair Janet Yellen. This figures to be an absolute snoozer, since the May non-farm payroll disaster - a meager 38,000 jobs - pretty much put the kibosh on any rate hikes this month.
As for the Brexit, the fears are real, though the people most affected will not be Americans nor Brits, but the technocrats which comprise the burdensome bureaucratic behemoth of the EU apparatus and its various rules, regulations, and assorted busy work.
For Britain to exit the European Union would be a bold maneuver for the people of the island nation, freeing them from outside influence and regaining a smidgen of national identity, something that has been seriously eroded since adoption of the Maastricht Treaty in 1992.
What it would do for business is unknown, though Britain could conceivably become a trading partner with the EU, as is the USA and many other nations, rather than a member. Years would pass before all the effects are known and felt, but the fear mongering by Prime Minister David Cameron and others who wish to keep the status quo alive and well are largely overblown.
There, however, is the proverbial rub. The elites in control don't want to give up their power and a Brexit is seen as a direct assault on the powers that be. Common people would be wise to vote to leave the EU, eliminating a large, burdensome bureaucratic malaise. The referendum for Great Britain is to take place on Thursday, June 23. Polls show those favoring leaving and those favoring staying in the EU about even and that has people on Wall Street jumping out of their pants... for no good reason.
Fear and Loathing Monday:
S&P 500: 2,079.06, -17.01 (0.81%)
Dow: 17,732.48, -132.86 (0.74%)
NASDAQ: 4,848.44, -46.11 (0.94%)
Crude Oil 48.58 -1.00% Gold 1,287.10 +0.88% EUR/USD 1.1291 +0.37% 10-Yr Bond 1.62 -1.40% Corn 429.75 +1.60% Copper 2.05 +1.13% Silver 17.43 +0.61% Natural Gas 2.92 +0.24% Russell 2000 1,150.70 -1.14% VIX 20.97 +23.14% BATS 1000 20,677.17 0.00% GBP/USD 1.4247 +0.05% USD/JPY 106.1975 -0.56%
Friday, June 10, 2016
As Expected, Dow Falls Back Into Sub-18,000 Range
Editor's Note: Apologies are in order for the tardiness of the extended post, but the publisher has been trying to cope with an unfair labor situation and other troublesome issues. Those are now past. This blog shall forge ahead.
The week ended on a down note, as stocks fell across the board on the US indices.
While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.
More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.
US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.
Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.
The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.
None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.
The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.
Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.
For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.
The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.
For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)
Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)
Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%
The week ended on a down note, as stocks fell across the board on the US indices.
While the Dow was the only one of the three major averages to close out the week with a gain, it still did not manage a close above the now-legendary 18,000 mark. Likewise, the S&P closed below 2100 and the NASDAQ slid further into sub-5000 numbers.
More institutional voices added to the chorus of caution as the week wore on, including Bill Gross, George Soros and Stan Drunkenmiller. Global condition stubbornly refuse to improve, despite vain attempts at stimulation by central banks, governments and the financial media.
US bond yields fell across the spectrum, with the curve flattening. The 10-year is at levels not seen in months, while globally, sub-zero percent returns have expanded to over $10 trillion in the aggregate.
Clearly, what the markets need is a cleansing of excessive and misplaced debt, something the authorities have managed to avoid for the past seven years and counting. The latest bailout comes via the US House of Representatives, putting US taxpayers on the hook for a significant portion of Puerto Rico's unpayable obligations.
The House overwhelmingly passed a package that would establish a financial control board made up of more bureaucrats, those indirectly responsible for the various aspects of the global malaise. The measure is nothing more than further can-kicking, pushing the debt and problems further out rather than addressing the underlying problems.
None of what governments do, in terms of rescue packages or stimulus measures, has made or will make any difference whatsoever. They simply borrow more, adding to the national debt, which, closing in on $20 trillion in the US, will never be repaid.
The sooner the farce of ZIRP, NIRP, QE, debt spending, and global free trade are foreclosed upon, the sooner the global economies can begin functioning as centers of capitalism.
Hoping for change will not bring change. Usually, change requires more radical measures. Globally, politicians all appear to be built from the same model, caring only to keep their positions of power and persuasion. That has to change, though real change begins at the micro-level, not the macro.
For now, heading into Northern Hemispheric summer, the course has not changes, despite storm clouds on the horizon.
The coming week offers four central bank meetings and pronouncements, in Switzerland, the UK, Japan and the US, where the FOMC is expected to keep rates unchanged on Wednesday, June 15.
For the Week:
Dow: +58.28 (+0.33%)
S&P 500: -3.08 (-0.15%)
NASDAQ: -47.97 (-0.97%)
Seriously? Again? Friday's Figures:
S&P 500: 2,096.07, -19.41 (0.92%)
Dow: 17,865.34, -119.85 (0.67%)
NASDAQ: 4,894.55, -64.07 (1.29%)
Crude Oil 48.88 -3.32% Gold 1,276.30 +0.28% EUR/USD 1.1253 +0.01% 10-Yr Bond 1.64 -2.44% Corn 422.25 -1.00% Copper 2.03 -0.61% Silver 17.33 +0.36% Natural Gas 2.92 -1.65% Russell 2000 1,163.93 -1.46% VIX 17.03 +16.33% BATS 1000 20,677.17 0.00% GBP/USD 1.4255 -0.04% USD/JPY 106.9400 0.00%
Thursday, June 9, 2016
Dow Touches 18,000 Agains, Fails
After a shaky start, the Dow - and the other equity averages - erased the morning's losses and finally managed to end the day with just minor losses.
The industrials punched through the 18,000 mark again, but could not sustain the rally, closing just shy of that critical, psychological marker.
This pattern has been in play more often than should be mentioned, prompting belief that the Federal Reserve itself is intervening in stocks, something - in this dystopian reality - that should surprise nobody.
In any case, if the Fed has "the back" of all market plungers, then why not just go ahead and buy your ticket to the good life, via Amazon, or Google, or Apple, perhaps even taking a flyer on the occasional small cap or some oil driller?
If it were only so easy. A wise man once said, "if it was that easy, we'd all be rich." For the monied gangsters doing business on the South end of Manhattan island, perhaps it is so. But, they have other problems, like margin calls, undersized genitalia and assorted mental maladies.
The world of finance is especially rigged to make certain people rich. For the rest of us, it's pretty much a crap-shoot, which is why so many, especially since the economic calamity of 2008-09, have opted to not play any more.
Tomorrow is Friday, and, for much of the expanse of the great United States of America, the weather should be pleasant, if not outright spectacular. Punch in, punch out, grab an adult beverage and had for the patio. Fire up the grill and cook something.
Money doesn't buy happiness. There is surely more to living than counting your shekels. Besides, did you see the gains in silver the past two days?
Something is afoot.
Thursday's Troubled Trip:
S&P 500: 2,115.48, -3.64 (0.17%)
Dow: 17,985.19, -19.86 (0.11%)
NASDAQ: 4,958.62, -16.03 (0.32%)
Crude Oil 50.42 -0.28% Gold 1,271.90 -0.06% EUR/USD 1.1314 -0.04% 10-Yr Bond 1.68 -1.52% Corn 426.00 -1.22% Copper 2.04 0.00% Silver 17.28 +0.10% Natural Gas 2.95 +3.19% Russell 2000 1,181.20 -0.65% VIX 14.64 +3.98% BATS 1000 20,677.17 0.00% GBP/USD 1.4462 +0.02% USD/JPY 106.9945 +0.03%
The industrials punched through the 18,000 mark again, but could not sustain the rally, closing just shy of that critical, psychological marker.
This pattern has been in play more often than should be mentioned, prompting belief that the Federal Reserve itself is intervening in stocks, something - in this dystopian reality - that should surprise nobody.
In any case, if the Fed has "the back" of all market plungers, then why not just go ahead and buy your ticket to the good life, via Amazon, or Google, or Apple, perhaps even taking a flyer on the occasional small cap or some oil driller?
If it were only so easy. A wise man once said, "if it was that easy, we'd all be rich." For the monied gangsters doing business on the South end of Manhattan island, perhaps it is so. But, they have other problems, like margin calls, undersized genitalia and assorted mental maladies.
The world of finance is especially rigged to make certain people rich. For the rest of us, it's pretty much a crap-shoot, which is why so many, especially since the economic calamity of 2008-09, have opted to not play any more.
Tomorrow is Friday, and, for much of the expanse of the great United States of America, the weather should be pleasant, if not outright spectacular. Punch in, punch out, grab an adult beverage and had for the patio. Fire up the grill and cook something.
Money doesn't buy happiness. There is surely more to living than counting your shekels. Besides, did you see the gains in silver the past two days?
Something is afoot.
Thursday's Troubled Trip:
S&P 500: 2,115.48, -3.64 (0.17%)
Dow: 17,985.19, -19.86 (0.11%)
NASDAQ: 4,958.62, -16.03 (0.32%)
Crude Oil 50.42 -0.28% Gold 1,271.90 -0.06% EUR/USD 1.1314 -0.04% 10-Yr Bond 1.68 -1.52% Corn 426.00 -1.22% Copper 2.04 0.00% Silver 17.28 +0.10% Natural Gas 2.95 +3.19% Russell 2000 1,181.20 -0.65% VIX 14.64 +3.98% BATS 1000 20,677.17 0.00% GBP/USD 1.4462 +0.02% USD/JPY 106.9945 +0.03%
Wednesday, June 8, 2016
Dow Closes Above 18,000; SPX Within 15 Points Of All-Time High; Silver Rockets Over 17; Cruce Oil At 11-Month High
No commentary required.
S&P 500: 2,119.12, +6.99 (0.33%)
Dow: 18,005.05, +66.77 (0.37%)
NASDAQ: 4,974.64, +12.89 (0.26%)
Crude Oil 51.52 +0.57% Gold 1,266.90 +0.36% EUR/USD 1.1402 +0.02% 10-Yr Bond 1.71 -0.41% Corn 432.50 +1.11% Copper 2.07 +0.34% Silver 17.11 +0.77% Natural Gas 2.85 -0.28% Russell 2000 1,188.95 +0.76% VIX 14.08 +0.21% BATS 1000 20,677.17 0.00% GBP/USD 1.4522 +0.03% USD/JPY 106.8950 0.00%
S&P 500: 2,119.12, +6.99 (0.33%)
Dow: 18,005.05, +66.77 (0.37%)
NASDAQ: 4,974.64, +12.89 (0.26%)
Crude Oil 51.52 +0.57% Gold 1,266.90 +0.36% EUR/USD 1.1402 +0.02% 10-Yr Bond 1.71 -0.41% Corn 432.50 +1.11% Copper 2.07 +0.34% Silver 17.11 +0.77% Natural Gas 2.85 -0.28% Russell 2000 1,188.95 +0.76% VIX 14.08 +0.21% BATS 1000 20,677.17 0.00% GBP/USD 1.4522 +0.03% USD/JPY 106.8950 0.00%
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