With the solitary exception of the Shanghi market, the rest of the world logged a sea of red ink today.
What does that tell us good citizen? Nothing useful, just that the already rich aren’t quite as rich as they were yesterday. That, perhaps, is the most striking thing about this market rally. The ‘small investor’ isn’t there. The people who got ‘fried’ when the market lost half of its value early last year sold when the market crashed and they haven’t looked back…
Only the hedge funds and the institutional investors have participated in the market’s…er, ‘amazing’ recovery, which is conservatively estimated to be 25% overvalued at the present time.
Worse, it is making the rounds that Wall Street has indeed been using ‘taxpayer funds’ (at zero percent interest) to drive up stock valuations…which, ironically, makes the already wealthy, wealthier!
WTF!
Deep breath…let’s proceed to tonight’s offering before I lose my cool…
Wall Street Drops After Disappointing Alcoa Results
By THE ASSOCIATED PRESS
Published: January 12, 2010 [The markets closed in negative territory and this story remained an ‘orphan’, disappearing from the linked list. I shall point to a possible reason for this further along in the article.]
Shares on Wall Street traded lower on Tuesday, after the aluminum producer, Alcoa, reported earnings that fell short of expectations.
Overseas markets also mostly fell, reacting to China tightening its monetary policy and increasing bank reserve requirements in addition to the worse-than-expected results from the world’s biggest aluminum producer.
As one of the first companies in the Standard & Poor’s 500-stock index to report quarterly results, Alcoa’s earnings are often seen as a barometer for how companies will fare.
After the market closed Monday, Alcoa said it earned a penny a share excluding one-time items and special charges. Analysts polled by Thomson Reuters, on average, forecast earnings of 6 cents a share. [This would lend the ‘impression’ that Alcoa announced either late Monday afternoon or sometime in the early evening hours, which is to say before the Asian markets opened for trading on their Tuesday…]
The company said higher metal prices were offset by weakness in aerospace, construction and gas turbines businesses. [Note the ‘reversed’ market dynamics at play here, customers are buying less but ‘speculators’ are buying more!]
Revenue also fell at Alcoa. Investors will be tracking revenue as companies report earnings over the next few weeks for any signs that customers are returning to the marketplace. Upbeat earnings in recent quarters have often been due to cost cutting and not revenue growth. [Staunching the bleeding will only keep you alive for so long, fail to earn profits and there will soon be nothing left to save…or sell.]
However, a strong economic recovery is dependent on a rebound in consumer and corporate spending, which would result in improving revenue. [This means customers with cash in their pockets, not employees that don’t get pay increases for years on end!]
The video game publisher Electronic Arts did not see a rebound in sales during the most recent quarter. It slashed its full-year earnings forecast after the market closed Monday, saying ongoing weakness in game sales did not ease up over the holidays.
In early afternoon, the Dow Jones industrial average fell 51.31 points, or 0.48 percent. The S.&P. 500 fell 10.42 points, or 0.90 percent, while the Nasdaq fell 26.37 points, or 1.1 percent.
Alcoa shares fell 9.2 percent, to $15.83.
The Dow and S.&P. 500 both rose Monday helped by a rise in industrial stocks. The sector got a lift after a report showed Chinese exports jumped 18 percent in December. The larger-than-expected increase came after 13 months of declines, raising hopes the world economy is recovering. [The only place whose economic data is more ‘suspect’ than the US is China…]
Monday’s report on Chinese exports and other signs of strengthening in the economy is now pushing the country to tighten up its monetary policy. China’s central bank on Tuesday increased the interest rate on its one-year bill to 1.84 percent from 1.76 percent. The rate had been steady since August.
It also raised the ratio of reserves banks must hold by 0.5 percentage points. That change will go into effect Monday.
The United States trade imbalance continued to grow in November. The Commerce Department said a jump in exports was more than offset by growing imports as the economy starts to pick up. The trade deficit climbed 9.7 percent to $36.4 billion, its highest level in 10 months. [This is not necessarily ‘good news’ for the US labor market…]
European stock markets also fell as did most exchanges in Asia.
The FTSE 100 index in London was down 61.12 points, or 1.1 percent, while the DAX in Frankfurt fell 90.12 points, or 1.5 percent. The CAC-40 in France was 48.49 points, or 1.2 percent, lower.
Hong Kong’s Hang Seng, meanwhile, dropped 84.88 points, or 0.4 percent, to 22,326.64.
China’s Shanghai index jumped 61.22 points, or 1.9 percent, to 3,273.97 even though the People’s Bank of China increased the interest rate on its one-year bill by 8 basis points to 1.84 percent, having been steady since August.
But Japan’s Nikkei, which was closed for a public holiday on Monday, ended 80.82 points, or 0.8 percent, higher at 10,879.15. The advance in Japan came about even though Japan Airlines, Asia’s largest carrier, dived 45 percent to a new record low amid concerns that it will file for bankruptcy protection. [This wouldn’t be the first time the reporters got the market data wrong, Japan was solidly in negative territory when I checked a little while ago…but that could be today’s reading or their Wednesday I was looking at…]
In the energy market, oil prices fell to near $81 a barrel Tuesday on expectations a cold spell in parts of the United States, Europe and Asia will ease, weakening crude demand. [Um, is it just me or does that last ‘qualifier’ look a bit ‘predatory’ to you too?]
By early afternoon in Europe, benchmark crude for February delivery was down 87 cents to $81.65 a barrel in New York trading.
Crude prices have jumped from $69 a barrel a month ago as cold winter weather, particularly in the Northeast and the Midwest, lifted demand for oil products such as heating oil. Forecasters now expect those freezing temperatures to rise the rest of this month.
I’ve been following this financial stuff for a while now and I’ve seen some pretty ‘bizarre’ behavior, the kind of shit that makes you wonder why this sort bullshit isn’t illegal!
But I’ve never seen the kind of blatant…er, price gouging we see on display in this article, and no, if it has been like this ‘all along’ I’m sure I would have noticed.
Which is to say an already corrupt and broken system has actually gotten worse in the past few years.
Where do we draw the line good citizen? Because, sadly, we have never had any ‘say’ over what is permissible or a lot of the BS going on right now wouldn’t be happening!
Worse good citizen is the ‘off-hand’ way the press treats such a callous remark…
Go ahead, blow me away and ask, ‘what remark is he babbling about?’
Hey, I got my underwear tied in knots over the remark about aluminum prices going up while demand for the metal dropped. But this is merely and example of ‘investing gone wrong’ these people aren’t buying aluminum because they have a use for it, they are buying it to ‘shelter’ their wealth from drops in the value of their (local) fiat currency!
So we take that one step further and hold the gun to consumer’s heads during cold snaps, charging them a premium for what they really need.
Um, don’t try and disguise predatory behavior by saying ‘it’s just business’ because we both know it has nothing to do with ‘customer service’ and everything to do with taking advantage of the situation…which is fucking predatory, especially when you do it to your own species! There’s nothing fucking lower than that!
That said, perhaps you see why I advocate that those who fail to value the benefits of civil society should have those benefits withdrawn from them, to be left in the wild, naked and alone with only their ‘superior abilities’ to sustain them…
Probably be a lot of dead bodies lying around before too long but that’s preferable to letting these ingrates continue to kill hardworking folks who have done no wrong just so they can wax rich from their suffering.
Thanks for letting me inside your head,
Gegner
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