Vanishing point....

Greetings good citizen,

The ‘stupidity market’ opened sky high this morning only to close posting a modest gain, worse, the Nasdaq closed in negative territory.

Why, after tacking on more than 150 points at the open this morning did stocks plummet, retaining only 30 points at the end of today’s trading?

You’ll have to go here to read the article which blames new consumer protection legislation regulating credit cards for the tumble in this afternoon’s markets…

It’s one of those bizarre situations that make you wonder ‘who are these people and whose side are they on?’ Imagine, selling off because you could no longer screw your customers! As disgraceful as that sounds, that’s what’s happening.

Weirdly, that brings us to tonight’s offering and the ominous fact that this story is no longer listed with the rest of today’s NY Times business section articles.

U.S. Stocks Follow World Markets Higher

By THE ASSOCIATED PRESS [Yet another ‘orphan’. I didn’t get a chance to see if anyone on the NYT staff claimed this story before it was removed from today’s line-up.]
Published: November 4, 2009

Investors rushed into stocks Wednesday on Wall Street after stronger reports on service industries and employment eased two of the biggest worries about the economy.

Stocks jumped after the Institute for Supply Management said service industry activity grew for a second straight month in October. The trade group’s service index slipped to 50.6 from 50.9 in September. A reading above 50 signals growth. Analysts polled by Thomson Reuters had expected a 51.5. [Wait a minute slim. Putting those shoes on the other feet we’d have data that ‘disappointed to the downside’…except the number ‘grew’ by a whopping 3 hundredths of a freaking percent…even by their own standards, the number is barely positive! I wouldn’t be dancing a jig over that figure!]

Although the index didn’t meet forecasts, the I.S.M. said new orders, which are an indicator of future business activity, grew faster. Business activity also picked up. [Um, excuse me? If I’m not mistaken, the uptick in orders is almost entirely due to military aircraft purchases…and almost all of that work has been off-shored!]

Encouraging news about the labor market also boosted investors’ mood. The ADP National Employment Report said 203,000 private sector jobs were lost in October, down from the 227,000 lost in September. It was the seventh straight month of declining job losses. [If you buy that number I’ve got a bridge you might be interested in…the ‘average’ weekly new claim filings has been ticking up, not going down. It is sure looking like somebody at the BLS is lying through their teeth…just saying, ya know?]

That stirred hopes for a better-than-expected employment report from the Labor Department on Friday.

The two reports calmed some concerns that the economy won’t be able to recover until consumers have proof they are feel more secure in their jobs to start spending at higher levels.

At 11:15 a.m., the Dow Jones industrial average was up 131.19 points, or 1.3 percent , to 9,903.10. The broader Standard & Poor’s 500-stock index was also up 1.3 percent, and the technology-heavy Nasdaq composite was 1 percent higher.

Markets in Europe and Asia also showed strong gains.

The early advance on Wall Street came as investors awaited an assessment of the economy from the Federal Reserve policy makers following the conclusion of a two-day meeting later Wednesday. [When they finally got it, it seems they were less than pleased.]

Investors also reacted to encouraging signals in earnings news. The media conglomerate Time Warner reported a 38 percent drop in third-quarter profit, but the results beat expectations. The company also boosted its full-year earnings forecast. [So yes, good citizen…today was yet another shining example of the free markets displaying their uncanny psychic ability…but if the markets had ‘perfect knowledge’, why did they gain 130 points only to lose all but 30 of them by the end of the trading day?]

Pulte Homes’ third-quarter loss widened, but the homebuilder said it has continued to see stabilization in the housing market.

The dollar slipped against other major currencies, helping to push commodities prices higher. Gold surged to a new high of $1,096.20 an ounce, while oil prices added 45 cents to $80.05 on the New York Mercantile Exchange. [Here’s an interesting question nobody seems eager to answer…if the economy is in ‘recovery’ and the recession is pretty much over, then why is the dollar headed into the basement? I mean, what the fuck is up with that?]

In European markets, the FTSE 100 index of leading British shares was up 1.5 percent in late-afternoon trading, while Germany’s DAX rose 1.9 percent and the CAC-40 in France was 2.4 percent higher.

Sentiment was buoyed by some forecast-busting earnings from the likes of the British retailer Marks & Spencer, the French bank Société Générale and the German sportswear company Adidas. [Um, okay things are kind of tied together but the European consumer isn’t any better off (cashflow wise) than their US counterparts. So these ‘forecast busting’ earnings reports are probably the result of more ‘cost cutting’ than an increase in consumer demand…which is something to be concerned, not excited about!]

Marks & Spencer shares rose nearly 6 percent after the company reported better than expected first-half profits and a pickup in market share. Meanwhile, Société Générale shares rose 4 percent after the bank, France’s second largest, reported a doubling in third quarter profit on strong earnings in investment banking. Adidas shares spiked 4 percent after it voiced cautious optimism for the coming year despite a 30 percent fall in third quarter profit. [Um, a thirty percent drop in third quarter performance isn’t a reason to celebrate. I’m surprised this news story wasn’t linked to reports of Adidas executives jumping out of their office windows!]

Though the earnings helped provide some support in Europe’s markets, investors are warning of volatile trading in the hours and days ahead amid a raft of economic news, particularly from the United States.

“Market sentiment is still fragile after the past few weak sessions and given the amount of economic data out later on we could still see volatility in today’s markets,” said Arifa Sheikh-Usmani, an equity trader at Spreadex. [Ahem…who the fuck is this and why should I give a shit again?]

Later Wednesday, the Fed takes center stage when it unveils its latest interest rate decision. Though no shift in interest rates is expected, investors will be on the lookout for any changes to the accompanying statement. [Which in itself is somewhat bizarre…the Fed has insisted they wouldn’t raise rates but with other central banks starting to push rates higher, the fed will have no choice but to comply.]

In particular, they will be looking to see if the Fed is more upbeat about the economic outlook and whether it provides pointers as to how it will withdraw the monetary stimulus in the future. [This is going to be a regular freak show when it’s time and most players think Bernanke can’t pull it off…which doesn’t bode well for the US economy. It will also make re-appointing Bernanke a decision that will blow up in Mr. Obama’s face.]

As well as slashing its benchmark interest rate to near zero percent, the Fed has pumped in trillions of dollars into the financial markets in an attempt to shore up confidence and get the world’s largest economy moving forward again from the depths of recession. [Trillions of taxpayer dollars still hasn’t induced the crippled banking system to resume lending. Only those with solid ‘insider connections’ are able to borrow in this economic environment…and those people have proven to be too few…and too privileged.]

Neil Mellor, an analyst at Bank of New York Mellon, doubts that there will be much change in the language of the statement, especially as Fed chairman Ben Bernanke has consistently voiced concerns about deflation. [Don’t get your hopes up good citizen…you are in absolutely zero danger of seeing actual lower prices…what these deflationist fucktards won’t admit (to you) is deflation will be ‘offset’ by sinking purchasing power, that’s where deflation really plays out…it’s not falling prices, it’s falling monetary value! Which will look exactly like what good citizen? To you, it will look exactly like hyper-inflation!]

“It must be presumed that Bernanke’s strategy is one that favors taking risks with inflation rather than taking risks of falling into a trap (of deflation) that he has written a treatise on how to avoid,” Mr. Mellor said, referring to Mr. Bernanke’s past research as an academic. “As such, that should entail a glacial pace of policy change.” [Sadly, Benber hasn’t done a single thing right since he stepped into Greenspan’s shoes. Instead of cutting, he should have jacked interest rates to the moon to discourage reckless gambling and to reward savers, something anyone who wasn’t super rich couldn’t do in the US.]

The European Central Bank and the Bank of England also announce interest rate decisions, on Thursday. Interest will focus on the Bank of England as most analysts reckon it will increase the amount of money it pumps into the economy. [We can only wonder how the poor Brits are going to pay it all back.]

Earlier, sentiment in Asia was helped by more optimism about China as the World Bank boosted its forecast for the world’s third-largest economy this year from 7.2 percent to 8.4 percent, reflecting the country’s enormous stimulus measures. The strength of China’s rebound also led the Washington-based bank to increase its growth forecast for developing East Asia by 1.3 percentage points to 6.7 percent. [Um, this is mighty optimistic considering how broke the rest of the world is...and Asia is impoverished, don’t let them kid you!]

All is not as it seems on the ‘Street of Dreams’ (for a few…too few.) this is the 4th or 5th article that’s been pulled in as many weeks. Not only do we have another ‘inexplicable’ market spike that occurs minutes after the markets open, but then it falls into a hole over the course of the day, making things look that much more suspicious.

Think about it good citizen, the market shooting up a hundred points in a matter of minutes…we’re talking a lot of money! And it’s not the kind of money most of us have kicking around in our pockets. I’m fairly certain there isn’t any consistent measure of how much money it takes to move the market but looking at the market in the opposite direction provides us with fairly impressive figures.

How impressive? Each point lost off of the Dow from market peak to it’s most recent valley back in March of this year…each point represented $ 700…million dollars.

One would think it would take at least that much if not more to lift the markets back up but somehow I doubt this. No, I’m fairly convinced that up is much easier than down…considering who makes out when equity prices rise…

So much for yet another ‘also ran’ article, have a pleasant evening good citizen, and thanks for letting me inside your head,

Gegner