Tuesday, November 10, 2009

Epic Failure

Greetings good citizen,

I have a confession to make. I don’t actually read these bad boys through before I select them as the evening’s offering…(I usually just go by the headline) so if I seem surprised at what I find there, it’s genuine!

Why bring this up? Well, I was just skimming the first couple of paragraphs and I almost swallowed my teeth! (Check out the 4th paragraph, last comment…enough said!) Art Linkletter had a long running TV show based on the premise ‘Kids say the darndest things’…then along came Jerry Springer and we all found out where the kids got their bizarre ideas from!

Yes, good citizen, those kids grew up and they’re still making darn fools of themselves both off and on stage!

Um, only the ‘stupidity index’ finished in positive territory good citizen, the S&P and the Nasdaq both closed a smidgen lower but not enough to place the ‘investor community’ on suicide watch!

So we proceed to tonight’s offering

Wall Street Stays Within a Narrow Path

Published: November 10, 2009

A day after a spirited rally sent the Dow to its highest levels since the beginning of the financial crisis, Wall Street seemed ready to take a step back. [Really now? Do you think the boys over at the Goldman trading desk have ‘blown their load’ for the week?]

The major stock averages drifted lower on Tuesday as the enthusiasm of Monday’s rally, which pushed the Dow up more than 200 points, seemed to dissipate. [I tend to favor my explanation as pissing a trillion dollars up against the wall for three days straight had to have some effect besides driving gold over the $1,100 per ounce mark! (We didn’t get THAT the first time the Dow cracked 10,000 now did we?)]

At noon, the Dow Jones industrial average was flat at 10,224.07. The broader Standard and Poor’s 500-stock index was down 2.52 points, or 0.2 percent, at 1,090.50. The technology-heavy Nasdaq composite index fell by 7.8 points, or 0.4 percent, at 2,146.13. Shares of financial companies led the declines.

The dollar, which has lost 16 percent of its value since March, climbed slightly on Tuesday, though it still traded near $1.50 against the euro. While the dollar is considered a safe-haven investment, low interest rates have kept its yield down, and in response investors have thrown their money to Wall Street in search of higher returns. [Seems like it should be a statement of fact…Just don’t go making wild-ass claims like that in front of 401k account holders or they’ll tar and feather you!]

Oil prices eased to around $79 a barrel as a tropical storm in the Gulf of Mexico began to subside.

Investors are focused on earnings reports from major retailers later this week, including Macy’s, Wal-Mart and J. C. Penney. As the holiday season approaches, those results will give a snapshot of the state of consumer spending, which makes up about 70 percent of the United States economy. [Which is a little weird good citizen, in any kind of sustainable economic model, production would tend to cancel out consumption, so figures beyond fifty-fifty are skewed beyond belief! Simply put, we should not be consuming more than we produce.]

Doug Roberts, chief investment strategist for ChannelCapitalResearch.com, said investors were ignoring signs that consumer spending might be weak in the coming months, given continuing cost-cutting by companies and a steady rise in the unemployment rate.

“Nobody wants to fight the rally,” he said. “The market is showing a natural pullback at this point, and we will probably see a consolidation phase for awhile.”

In Japan, the Nikkei index closed up 0.6 percent. European stocks were mixed after five days of steady gains. At the end of trading, the DAX in Germany was down 0.1 percent, the FTSE in Britain fell 0.1 percent, and the CAC in France was flat.

In London, shares of HSBC were about 4 percent higher after the bank said its profit in the quarter ended in September was “significantly ahead” of a year ago. Shares of a rival, Barclays, were down 4 percent after profit declined 54 percent. And the Lloyds Banking Group saw shares drop slightly after announcing plans to lay off another 5,000 workers.

Ken Mayland, president of ClearView Economics in Ohio, said Wall Street would probably continue to inch upward, with occasional downturns, as investors gunned for a strong finish to 2009. [Once again we have to ask the hard question…if nobody is buying, where will the profits come from? Regardless of what they say, there isn’t enough ‘economic activity’ out there to justify current stock prices!]

“There’s a lot of money on the sidelines that has missed out on stocks being up,” Mr. Mayland said. “And time to the year-end is getting short.”

‘Missed out’ is a relative diagnosis good citizen, for all of the ‘hype’ the only ‘evidence’ of economic recovery out there is the stock market itself. As we have witnessed over the past few trading sessions, the big trading desks can draw upon taxpayer funds at zero interest and drive the market wherever they want it.

Worse, before the most recent ‘leg-up’ we had a day where they poured a trillion dollars into the market and it hardly moved, which implies that some stocks were being sold as fast as they were being bought! (I’m referring to the day where the market soared 160 points (right out of the box) only to close at a mere positive 30…only to repeat the astounding run up the very next day! (The market went up nearly 200 points and it just sat there all friggin’ day, adding fifteen points just before the close to nudge it over the 10,000 mark for the 29th time!)

I won’t make a wild-ass claim like they can make the markets say whatever they feel like making them, it seems as though they are limited to upward movements of 200 points. Now maybe they are trying to ‘light the fire’ and pumping a trillion dollars into the market is supposed to suck some of that ‘sideline money’ into the market…but it’s not happening.

Why isn’t that happening? Because the problem is the same as it was 2 years ago; the consumer is tapped out. Nobody wants to start a new venture (or expand an existing one) because there are too few customers out there…even if you succeed in re-inventing the wheel, failure to attract sufficient cash flow will result in bankruptcy…if you’re not considered ‘too big to fail’.

The worst part of this whole ‘charade’ is capitalism has failed and there won’t be any economic recovery until capitalism is replaced.

Bizarrely, capitalists would gladly declare a ‘jubilee’ if it kept the status quo intact…but the problem with that is not all debt would be forgiven. So the economy wouldn’t really recover, prompting the need for another jubilee with even more debt being exempted from exemption and yeah…the economy slowly chokes to death, so a few can be rich.

I favor a clean slate that totally levels the playing field…permanently. But this isn’t about what I like/consider a good idea, is it?

Well, without equality there can be no justice and without justice there can be no peace…and without peace there can be no prosperity, and without prosperity there is no point in being a member of society…no point at all.

Thanks for letting me inside your head,


No comments:

Post a Comment