At the end of a wild two weeks, everybody needed a break and they got one, in one of the slowest trading days in some time. News flow was also minimal.
In sync with the rest of the market, General Motors (GM), on its second day of trading as a new, reformed entity, fell almost back to its IPO price, hitting 33.11 at just about 10:00 am. The stock and the rest of the market (Dow was down 62 points) took a sudden turn and churned to slight, positive gains by the sessions end.
Overall, the major indices have barely moved since the mid-term elections. The Fed's incessant currency devaluation efforts have also, thus far been for naught.
Dow 11,203.55, +22.32 (0.20%)
NASDAQ 2,518.12, +3.72 (0.15%)
S&P 500 1,199.73, +3.04 (0.25%)
NYSE Composite 7,641.08, +21.14 (0.28%)
NASDAQ Volume 1,878,265,250
NYSE Volume 3,921,869,500
Advancers finished well ahead of losers, 3546-2632. There were 279 new highs and 73 new lows. Volume was extremely light.
Oil was flat, at $81.85. Silver last printed 27.35, +0.36. Gold spot closed at $1354.10, up 60 cents.
Rinse, repeat, ponder the future. Ireland remains in talks with the EC, ECB and IMF. They're getting the "full monty" from the financiers, if you will.
Showing posts with label General Motors. Show all posts
Showing posts with label General Motors. Show all posts
Friday, November 19, 2010
Thursday, November 18, 2010
Market Motors Ahead on GM IPO
The entire trading day was a well-orchestrated event staged by the power brokers of Wall Street, the government and the shills on CNBC, designed exclusively to give the pet project of the bailout bunch, General Motors, a bright and cheery IPO send-off.
Shares of GM's rebirth IPO (initial public offering - somewhat of an oxymoron in this case) priced the previous day at $33 and opened with immediate upticks shortly after the general markets had commenced trading. That it would get a positive set up was assured by a gargantuan ramp-up in the futures, ostensibly on news that Ireland was veering toward accepting a bailout from either the EU or the IMF or a combination of both. Only in these wacky times can the fact that a nation is being saved from ruin by the very same bankers who ruined it foment a powerful rally, but, that's the world in which we now live.
The set-up got GM off to a nice start with the rest of he market despite fears that some traders would "flip" the stock, and surely some did. Shares of GM hit a high of 35.99 shortly after the open and retreated the rest of the day, hitting a low of 33.89 before settling at 34.19 at the close for a gain of 3.61%, no big deal.
The Fed pumped more money in the direction of the primary dealers. This is a permanent fixture now as the Fed has already set down a timetable for a daily POMO through December 9, with the exception of the Wednesday before and the Friday after Thanksgiving (next week).
Another interesting note was news that Warren Buffet was to receive the Medal of Freedom, just a day after practically falling all over himself in praise of the government in his NY Times op-ed. At least he'll be in equally-suspect company. German Chancellor Angela Merkel and former US President George H.W. Bush are among other recipients named by President Obama.
From this we can only surmise that the level of greed, corruption and naked narcissism has finally reached critical mass amongst the elitists.
Dow 11,181.23, +173.35 (1.57%)
NASDAQ 2,514.40, +38.39 (1.55%)
S&P 500 1,196.69, +18.10 (1.54%)
NYSE Composite 7,619.94, +131.18 (1.75%)
NASDAQ Volume 2,083,305,250.00
NYSE Volume 5,373,779,000
Advancers trounced decliners, 5093-1419; new highs surpassed new lows for the second straight session, 299-59, but volume, up to 20% of which on the NYSE was attributed to trades on GM, was weak.
Commodities also ramped up. The front end of the crude oil futures gained $1.41, to $81.85. Gold picked up $16.10, to $1,353.00, while silver rose more than 5%, up by $1.32, to $26.83.
Unemployment claims were little changed from the previous week and October stock options expire tomorrow. The latest word from the continent is that Irish leaders are still resistant to a bailout, though the pressure is building for them to take the money and plunge the country into an even worse situation, with bills and interest owing to the IMF with no hope of ever paying its way out. This same thing has happened before, in Argentina and other South American countries. The usual outcome is the rape of the nation's wealth to the detriment of the populace.
Erin go Bragh, indeed.
Shares of GM's rebirth IPO (initial public offering - somewhat of an oxymoron in this case) priced the previous day at $33 and opened with immediate upticks shortly after the general markets had commenced trading. That it would get a positive set up was assured by a gargantuan ramp-up in the futures, ostensibly on news that Ireland was veering toward accepting a bailout from either the EU or the IMF or a combination of both. Only in these wacky times can the fact that a nation is being saved from ruin by the very same bankers who ruined it foment a powerful rally, but, that's the world in which we now live.
The set-up got GM off to a nice start with the rest of he market despite fears that some traders would "flip" the stock, and surely some did. Shares of GM hit a high of 35.99 shortly after the open and retreated the rest of the day, hitting a low of 33.89 before settling at 34.19 at the close for a gain of 3.61%, no big deal.
The Fed pumped more money in the direction of the primary dealers. This is a permanent fixture now as the Fed has already set down a timetable for a daily POMO through December 9, with the exception of the Wednesday before and the Friday after Thanksgiving (next week).
Another interesting note was news that Warren Buffet was to receive the Medal of Freedom, just a day after practically falling all over himself in praise of the government in his NY Times op-ed. At least he'll be in equally-suspect company. German Chancellor Angela Merkel and former US President George H.W. Bush are among other recipients named by President Obama.
From this we can only surmise that the level of greed, corruption and naked narcissism has finally reached critical mass amongst the elitists.
Dow 11,181.23, +173.35 (1.57%)
NASDAQ 2,514.40, +38.39 (1.55%)
S&P 500 1,196.69, +18.10 (1.54%)
NYSE Composite 7,619.94, +131.18 (1.75%)
NASDAQ Volume 2,083,305,250.00
NYSE Volume 5,373,779,000
Advancers trounced decliners, 5093-1419; new highs surpassed new lows for the second straight session, 299-59, but volume, up to 20% of which on the NYSE was attributed to trades on GM, was weak.
Commodities also ramped up. The front end of the crude oil futures gained $1.41, to $81.85. Gold picked up $16.10, to $1,353.00, while silver rose more than 5%, up by $1.32, to $26.83.
Unemployment claims were little changed from the previous week and October stock options expire tomorrow. The latest word from the continent is that Irish leaders are still resistant to a bailout, though the pressure is building for them to take the money and plunge the country into an even worse situation, with bills and interest owing to the IMF with no hope of ever paying its way out. This same thing has happened before, in Argentina and other South American countries. The usual outcome is the rape of the nation's wealth to the detriment of the populace.
Erin go Bragh, indeed.
Label:
General Motors,
GM,
Ireland,
silver,
Warren Buffett
Tuesday, June 02, 2009
The Incredible Levitation Stock Market Routine
Stocks managed another day slightly to the upside on Tuesday, the mood tempered somewhat as there wasn't another world-record bankruptcy to celebrate as on Monday. Without a General Motors going bust, the fat cats must have little to do, trying to keep the mood cheery and uplifting.
Despite the paucity of news - though pending home sales in April were up a reported 6.7% - investors still haven't gotten the idea to lock in profits, expecting the rebound and recovery to continue seemingly forever.
Dow 8,740.87, +19.43 (0.22%)
NASDAQ 1,836.80, +8.12 (0.44%)
S&P 500 944.74, +1.87 (0.20%)
NYSE Composite 6,182.87, +13.80 (0.22%)
Despite the smallish gains on the indices, the positive tone was notable, with advancing issues defeating decliners, 3764-2648. New highs recorded their second straight victory over new lows, 99-81, though it will take more than just a few instances for this to become a trend, and the betting - in this quarter at least - is against it. Volume was solid, roughly in Monday's range, and thus, unimportant.
NYSE Volume 6,945,081,000
NASDAQ Volume 2,406,962,750
Crude oil took a bit of a breather - or, rather, the pumping speculators did - losing 3 cents to $68.55. Gold gained, adding $4.40, to $984.40, in its inexorable push back above $1000. Silver continues to post impressive gains, adding another 22 cents per ounce, to $15.96. The silver rally is real, has legs and should continue unabated beyond $17 in short order.
As for stocks, well, they keep going up, too, but there are many reasons not to like them, the main one being that everyone has grown so complacent in recent weeks, setting up the potential for a swift and violent decline.
Despite the paucity of news - though pending home sales in April were up a reported 6.7% - investors still haven't gotten the idea to lock in profits, expecting the rebound and recovery to continue seemingly forever.
Dow 8,740.87, +19.43 (0.22%)
NASDAQ 1,836.80, +8.12 (0.44%)
S&P 500 944.74, +1.87 (0.20%)
NYSE Composite 6,182.87, +13.80 (0.22%)
Despite the smallish gains on the indices, the positive tone was notable, with advancing issues defeating decliners, 3764-2648. New highs recorded their second straight victory over new lows, 99-81, though it will take more than just a few instances for this to become a trend, and the betting - in this quarter at least - is against it. Volume was solid, roughly in Monday's range, and thus, unimportant.
NYSE Volume 6,945,081,000
NASDAQ Volume 2,406,962,750
Crude oil took a bit of a breather - or, rather, the pumping speculators did - losing 3 cents to $68.55. Gold gained, adding $4.40, to $984.40, in its inexorable push back above $1000. Silver continues to post impressive gains, adding another 22 cents per ounce, to $15.96. The silver rally is real, has legs and should continue unabated beyond $17 in short order.
As for stocks, well, they keep going up, too, but there are many reasons not to like them, the main one being that everyone has grown so complacent in recent weeks, setting up the potential for a swift and violent decline.
Label:
General Motors,
gold,
silver
Monday, June 01, 2009
The Strangest Rally of All Time
It would be difficult, if not impossible, to describe the absurdity of the current rally in equities in terms that would do it justice. Mere mortals stand in awe of the magnificence, the enormity, and the one-sidedness of the US stock markets since March 9, 2009, until today... and probably beyond.
To try to offer some perspective, the S&P 500 closed today at 94xx, from the March 9 low of 676.53. That is a gain of 39.6% over a span of 57 sessions - 33 up, 24 down. Obviously, the days in which the index recorded gains, those were far superior in size than the days with losses. How well this has been orchestrated would make celebrated composer Leonard Bernstein blush.
Today's gains marked the 12th time during this span that the S&P has been up more than 20 points. By contrast, the index declined by that amount or more only 4 times through the same period. There has been no pullback or correction, as is almost always the case in rallies, no matter what the conditions or the degree of positive sentiment. This rally, unlike all others, has been nearly straight up, without any hint of a respite.
The kicker is that the S&P 500 index, should one like to apply Dow theory to it, should now be considered a PRIMARY BULL market, having successfully reversed the primary trend by topping the previous interim high of 934.70, posted at the close on January 6 of this year. That was off the low of November 20, 2008, of 752.44, and prior to the subsequent low of 676.53 (March 9, 2009). If one follows only the S&P 500, chartists would have to agree that we are now - without a doubt - in a bull market.
As an offset to that queer finding, the actual Dow Jones Industrial Index, upon which Dow Theory is based, still has room to run before breaking the primary - bearish - trend. The Dow would have to reach 9034.69, which it did on January 2, 2009, before declaring a new primary Bull market. The transportation index would also have to confirm, and, since those two events have yet to occur, one can safely assume that the current rally is indeed of the bear market variety, albeit quickly closing ground on fully debunking that data set.
All of this has occurred in an environment of growing, near-record unemployment, continuing declines in the median price of housing, a handful of Fed and Treasury initiatives to stimulate the economy, and the bankruptcies of Chrysler and General Motors, the latter occurring today and being the largest bankruptcy in the history of the United States.
While the Fed floods the world with newly-printed currency, commodities have also gained - not unexpected - as the dollar has declined against other currencies. All of this adds up to a great deal of uncertainty, a condition usually associated with market declines, not rapid, non-stop gains.
I, among others, have called the "top" incorrectly more times than we'd like to admit. There seems to be no stopping the engine of Wall Street, despite stocks on the S&P 500 having cut dividend returns to record lows while price-earning ratios have soared to levels normally associated with the end of long bull markets. The only way this rally continues is if the market is being manipulated, and that is the only conclusion which I can make at this point. There simply is not enough evidence that the economy has returned to a growth posture, nor any indication that stocks are actually being valued correctly, that is, discounting future growth. Most of the large gainers are actually showing a negative trend of declining earnings, which, in more normal times, would spark selling, not buying.
Dow 8,721.44, +221.11 (2.60%)
NASDAQ 1,828.68, +54.35 (3.06%)
S&P 500 942.87, +23.73 (2.58%)
NYSE Composite 6,169.0698, +165.00 (2.75%)
Advancing issues crushed decliners, 5159-1405. The biggest story of the day has to be the rollover of new highs finally surpassing new lows, 130-105. This is a reversal of a trend that has held in place every day except five or six since September, 2007. This is either the starting point of another bull run, which could dwarf even the current run-up, or a signal to sell everything as quickly as possible. The rally has pulled even the worst companies up by the bootstraps.
Volume on the day was higher than levels experienced last week, for no known reason, though not significantly.
NYSE Volume 1,500,474,000
NASDAQ Volume 2,647,576,000
Commodities in the energy area went ballistic. Crude oil gained $2.27, to $68.58, the highest point since November 4, 2008, seven months ago. Unfortunately, for those of us who still have to use gasoline to power our personal transportation devices, back in November of last year, prices were declining. They are now galloping ahead. Natural gas gained a whopping 41 cents, to $4.25, odd, because natural gas is primarily used for heating homes, and we are heading into warm summer months. The rise in natural gas was more than 11% in just one day.
Just as oddly, the metals responded in less-than-enthusiastic fashion. Gold actually fell 30 cents, to settle at $980.00. Silver gained 13 cents to finish at $15.74 per ounce in New York.
There were more "green shoots" of economic data, such as a 0.5% rise in personal income, a smaller-than-expected decline in personal spending and an 0.8% increase in April construction spending. Of course, those minor positives should have been more than offset by the largest bankruptcy in US history, the coming shutdown of 12-15 plants, job losses between autoworkers and dealers of more than 100,000, and a general malaise in manufacturing.
It just doesn't seem right that on the death of General Motors, Wall Street would throw a party.
To try to offer some perspective, the S&P 500 closed today at 94xx, from the March 9 low of 676.53. That is a gain of 39.6% over a span of 57 sessions - 33 up, 24 down. Obviously, the days in which the index recorded gains, those were far superior in size than the days with losses. How well this has been orchestrated would make celebrated composer Leonard Bernstein blush.
Today's gains marked the 12th time during this span that the S&P has been up more than 20 points. By contrast, the index declined by that amount or more only 4 times through the same period. There has been no pullback or correction, as is almost always the case in rallies, no matter what the conditions or the degree of positive sentiment. This rally, unlike all others, has been nearly straight up, without any hint of a respite.
The kicker is that the S&P 500 index, should one like to apply Dow theory to it, should now be considered a PRIMARY BULL market, having successfully reversed the primary trend by topping the previous interim high of 934.70, posted at the close on January 6 of this year. That was off the low of November 20, 2008, of 752.44, and prior to the subsequent low of 676.53 (March 9, 2009). If one follows only the S&P 500, chartists would have to agree that we are now - without a doubt - in a bull market.
As an offset to that queer finding, the actual Dow Jones Industrial Index, upon which Dow Theory is based, still has room to run before breaking the primary - bearish - trend. The Dow would have to reach 9034.69, which it did on January 2, 2009, before declaring a new primary Bull market. The transportation index would also have to confirm, and, since those two events have yet to occur, one can safely assume that the current rally is indeed of the bear market variety, albeit quickly closing ground on fully debunking that data set.
All of this has occurred in an environment of growing, near-record unemployment, continuing declines in the median price of housing, a handful of Fed and Treasury initiatives to stimulate the economy, and the bankruptcies of Chrysler and General Motors, the latter occurring today and being the largest bankruptcy in the history of the United States.
While the Fed floods the world with newly-printed currency, commodities have also gained - not unexpected - as the dollar has declined against other currencies. All of this adds up to a great deal of uncertainty, a condition usually associated with market declines, not rapid, non-stop gains.
I, among others, have called the "top" incorrectly more times than we'd like to admit. There seems to be no stopping the engine of Wall Street, despite stocks on the S&P 500 having cut dividend returns to record lows while price-earning ratios have soared to levels normally associated with the end of long bull markets. The only way this rally continues is if the market is being manipulated, and that is the only conclusion which I can make at this point. There simply is not enough evidence that the economy has returned to a growth posture, nor any indication that stocks are actually being valued correctly, that is, discounting future growth. Most of the large gainers are actually showing a negative trend of declining earnings, which, in more normal times, would spark selling, not buying.
Dow 8,721.44, +221.11 (2.60%)
NASDAQ 1,828.68, +54.35 (3.06%)
S&P 500 942.87, +23.73 (2.58%)
NYSE Composite 6,169.0698, +165.00 (2.75%)
Advancing issues crushed decliners, 5159-1405. The biggest story of the day has to be the rollover of new highs finally surpassing new lows, 130-105. This is a reversal of a trend that has held in place every day except five or six since September, 2007. This is either the starting point of another bull run, which could dwarf even the current run-up, or a signal to sell everything as quickly as possible. The rally has pulled even the worst companies up by the bootstraps.
Volume on the day was higher than levels experienced last week, for no known reason, though not significantly.
NYSE Volume 1,500,474,000
NASDAQ Volume 2,647,576,000
Commodities in the energy area went ballistic. Crude oil gained $2.27, to $68.58, the highest point since November 4, 2008, seven months ago. Unfortunately, for those of us who still have to use gasoline to power our personal transportation devices, back in November of last year, prices were declining. They are now galloping ahead. Natural gas gained a whopping 41 cents, to $4.25, odd, because natural gas is primarily used for heating homes, and we are heading into warm summer months. The rise in natural gas was more than 11% in just one day.
Just as oddly, the metals responded in less-than-enthusiastic fashion. Gold actually fell 30 cents, to settle at $980.00. Silver gained 13 cents to finish at $15.74 per ounce in New York.
There were more "green shoots" of economic data, such as a 0.5% rise in personal income, a smaller-than-expected decline in personal spending and an 0.8% increase in April construction spending. Of course, those minor positives should have been more than offset by the largest bankruptcy in US history, the coming shutdown of 12-15 plants, job losses between autoworkers and dealers of more than 100,000, and a general malaise in manufacturing.
It just doesn't seem right that on the death of General Motors, Wall Street would throw a party.
Label:
Fed,
General Motors,
oil futures
Tuesday, April 07, 2009
Bear Market Rally Built on Fraud
Every day, day after day after day, the sharks on Wall Street do the same thing, over and over and over again. According to the new rules of the game, stocks are suddenly much more attractive at 2:30, or 3:00, or 3:15, or 3:30, without any news, without any economic reports, without any technical rationale, than they were earlier in the day.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
This is called manipulation. Manipulation which occurs every day, without fail.
The pattern is so established and so obvious, eventually, the only people trading stocks will be the manipulators themselves, scratching and clawing for scraps, quarter points, half points, here and there, churning, deceiving, shorting stocks they are recommending to their clients and taking every last bit of available capital out of the hands of investors and into the black holes of the banks and brokerages.
It will eventually fail, and fail miserably. The smartest money got out of this market on Friday, the marginally less smart, Monday, and those with any brain cells left, after being slammed and hammered by instability and volatility, got out today.
With each passing day that the seven largest banks in America are allowed to continue doing business under a government-sponsored shroud of solvency - a complete and total fraud which I called as early as 2007, and others called even before me - stocks will be a very dangerous gamble. Those banks - Bank of America, Citigroup, JP Morgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley and American Express - are all insolvent and have been at least since September of 2008, some even sooner. All have benefited from injections of liquidity, cash and other government largess, courtesy of the US taxpayer, and still are underwater.
Finally, today, cracks began to widen in the flimsy fraud facade of "improving conditions", "signs of recovery", and other such nonsense being thrown around by the insipid morons on CNBC, on corporate boards and in the minds of witless fools who think they can make money in this environment.
After shaving 75 points off its 210-point loss in the final 1 1/2 hours, the markets were met with a torrent of selling in the final ten minutes of trading, pushing stocks close to their lows of the day. This should usher in more selling in days and weeks to come, as the rally built on nothing by hype, hope, lies and greed, completely falls apart. Conditions are not improving overall. They are getting worse, the recession deepening, business conditions deteriorating, credit squeezed to the breaking point, and fear re-emerging as the dominant sentiment.
And signs are clear that the economy will face heightened challenges in the months ahead, if the Business Roundtable Survey of 100 CEOs [PDF] is to be believed. Sixty-seven percent of those surveyed expected sales to decrease over the next six months. 66% expect to decrease capital spending, and 71% expect to lower employment over the same period. THESE GUYS SHOULD KNOW. THEY RUN PUBLICLY-TRADED COMPANIES.
The economic outlook index of the same survey fell to -5 (negative 5.0) in the period, the lowest level ever recorded in the six years of the survey and markedly lower than last quarter's reading of 16.5.
In case you need more proof of Wall Street's fraud and the true condition of the US economy, consider reading this New York Times story which explains how analysts expect earnings to be 37% lower than a year ago - a year which was already down from the previous year for many companies. You will learn that Standard and Poors reported that companies cut a total of $77 billion in dividends in the first quarter of 2009, the worst record of dividend cuts on record.
There was more bad news as the Times of London reported that the IMF may issue a report that bank toxic assets could reach as high as $4 trillion. Their previous estimate was $2.1 trillion. The report is due April 21.
Dow 7,789.56, -186.29 (2.34%)
NASDAQ 1,561.61, -45.10 (2.81%)
S&P 500 815.55, -19.93 (2.39%)
NYSE Composite 5,120.67, -128.81 (2.45%)
On the day, declining issues thumped advancers, 4897-1477. New lows were reached at 75 stocks, while a mere 10 recorded new 52-week highs. Volume was decimated by the lack of buyers. The smart money was moving out. The stubborn and the ill-informed remained in the market as stocks commence a cascade to lower levels. Volume has not been this low in four weeks, prior to the beginning of the massive ramp-up in stocks. Bulls will say the volume points out that today's decline is unimportant, though bears will point to three consecutive gains of lower highs and lower lows as proof that the bear market rally is out of gas.
NYSE Volume 1,261,882,000
NASDAQ Volume 1,868,136,000
Commodities were split, with the metals up and energy and food futures lower. Oil fell $1.90, to $49.15, on increased concerns over slack global demand. Gold ended a three-day losing streak, up $10.50, to $883.30. Silver added 10 cents to $12.21.
Finally, after the bell, Alcoa kicked off earnings season with a 59 cent per share loss, greater than the 56-cent loss analysts were expecting. It was the second straight quarter the company has posted a loss.
And, late in the day, news leaked out that General Motors (GM) was in "intense and earnest" preparations of a bankruptcy filing, in case the company fails to meet the requirements of the Obama administration's stringent restructuring plan.
I could not make this stuff up, folks. We, as a nation, are headed for economic hell.
Label:
BAC,
General Motors,
GM,
JP Morgan Chase,
manipulation
Monday, March 30, 2009
GM, Chrysler Kaput. Is This News to Anybody?
Remarkably, the monstrous sell-off to begin what surely will be a testy week for investors, had as its catalyst an announcement by the federal government that the plans submitted by GM and Chrysler were inadequate in terms of qualifying for further federal assistance.
Remarkable in that the two companies have shown limited ability to comprehend the depth of their own problems, let alone the issues facing the entire global economy or the dictates which have been nothing if not clear from the Obama administration. Both companies have already received government assistance in the billions of dollars, have had ample time to devise realistic plans for their futures, and, even then, are asking for billions more.
Anyone with half a brain still functioning who had seen snippets of their plans - especially that of GM - could have seen with one eye closed that their projections were completely out of line with reality. GM, for instance, based many of its assumptions on selling 14 million vehicles in 2010, when they didn't even crack the 9 million mark in 2008. As far as Chrysler is concerned, their problems should not be an issue of national importance. They certainly are not too big to failnor are they worthy of any kind of public assistance, since they are a private company 80% owned by equity investors, Cerberus Capital, which has at its head, former Treasury Secretary John Snow and long ago decided to put Bob Nardelli in charge of Chrysler, the same Bob Nardelli who oversaw, as CEO, the near-destruction of Home Depot (HD) . Cerberus has already shed itself of Daimler, the profitable German subsidiary, and plans to partner with Italian automaker Fiat, a company in the throes of its own meltdown.
If the managers at Fiat have any sense, they'll steer themselves away from this private group of corporate bunglers, as should the government and taxpayers. And if anyone thinks that CEO Rick Waggoner, who submitted his resignation Monday at the behest of the White House, should be the beneficiary of any sympathy, bear in mind that under Waggoner's leadership, GM lost nearly $100 billion dollars and continued to build cars, trucks, vans and SUVs that guzzle gas and have limited appeal as its market share shrank and its stock price cratered.
These two bankrupt automakers, like the corrupt, insolvent, worthless national banks, should be allowed to do what all companies which have ceased to be competitive do: fail, file bankruptcy and either liquidate or reorganize. There's no good cause to keep them functioning any longer even though the damage to the economy would be paramount. The UAW would see 180,000 workers furloughed, pensioners could lose most of their future benefits and bondholders would be forced to take 10% or less on their dollars.
Life gets very tough when you don't have a backstop to bail you out, but this fiasco is just a furtherance of the insane, contradictory polices emanating from the Capitol and White House. The government has become such a major intermediary into business and Wall Street that their refusal to dole out more corporate welfare to companies that don't get it, causes a stock market rout and a resumption of the fear factor which has gripped the country for months, but took a few weeks in abeyance during the recent bear market rally.
Today's losses sent every index and sector into a tailspin which actually started on Friday of last week and probably won't end until the market is back below 7000 and looking to retest the March 9 multi-year lows.
Looking at the markets realistically, the bounce off the lows was so rapid and mostly unwarranted that an equally-severe snapback should have been expected. Despite the closing numbers, stocks were down even more in late afternoon trading before a mini-rally and short-covering brought all of the indices off their lows of the day.
Bulls can take some heart in the idea that the markets didn't completely fall off a cliff, and that volume was not nearly as high as last week's, though it points up the conclusion of more savvy investors that there are still a good number of players out there waiting to be skinned by the bears in coming days and weeks.
According to Investors Intelligence's Weekly Sentiment Poll bearish sentiment at the market lows earlier in the month were not even 50%, checking in at 47.2% at the bottom, hardly an indication of a market bottom. Sentiment would have to be closer to 80%, signaling capitulation, a condition to which today may have put us closer. It now seems almost certain that before the end of summer the market will finally roll over and die, though a few more trillion of investor dollars will have to be vaporized before the message finally becomes clear to the massive numbers of ill-informed investors which populate all income levels, from novice to wizened veteran.
The US economy is wrecked beyond simple recession-like repair, our banking system at the top is dysfunctional (though many smaller local and regional banks are healthy and poised to grow), unemployment will continue to rise well past 10%, states and municipalities are broke, consumers tapped out, homeowners hunkered down against high taxes and utility bills and the federal government running out of excuses as fast as they concoct rescues.
We are in a world of hurt and if you don't recognize all of the patterns, you deserve to lose everything. It's that stark and simple.
Dow 7,522.02, -254.16 (3.27%)
NASDAQ 1,501.80, -43.40 (2.81%)
S&P 500 787.53, -28.41 (3.48%)
NYSE Composite 4,899.05, -197.59 (3.88%)
On the day, market internals were miserable and pointing towards even worse conditions. Declining issues overwhelmed advancers, 5373-1163, and while that's nearly a 5-1 ratio, it was closer to 8-1 midday, and will almost certainly approach those levels at least a couple of times in coming days and weeks. Stocks reaching new 52-week lows - moderated by the huge number of companies which had already collapsed by this time last year - numbered 109, as compared to the feeble 14 new highs. As stated above, volume was off a bit from last week's strong levels.
NYSE Volume 1,511,506,000
NASDAQ Volume 2,028,632,000
Commodities witnessed a resumption of the deflation trade, with crude oil taking a big hit, down $3.97, to $48.41. Gold lost $7.60, closing at $917.70. Silver shed 23 cents, to $13.03. Almost every other major commodity was traded lower, except natural gas, which finished unchanged at the depressed price of $3.80/mmbtu.
Other financial news was similarly dire. Washington Mutual (WaMu) and its key executives are the subject of a massive class action lawsuit, home foreclosures were sharply higher in February and JP Morgan Chase will refund over $4 million to credit card holders who began paying $10/per month in additional fees in January. The deal was struck under pressure from NY Attorney General Andrew Cuomo.
As the week progresses, more economic reports will be revealed, including home prices, consumer confidence, auto and truck sales, private sector employment, all leading up to Friday's non-farm payroll report for March and new unemployment statistics.
Hold onto your hats, but sell your stocks if you played and have any gains over the past few weeks.
Remarkable in that the two companies have shown limited ability to comprehend the depth of their own problems, let alone the issues facing the entire global economy or the dictates which have been nothing if not clear from the Obama administration. Both companies have already received government assistance in the billions of dollars, have had ample time to devise realistic plans for their futures, and, even then, are asking for billions more.
Anyone with half a brain still functioning who had seen snippets of their plans - especially that of GM - could have seen with one eye closed that their projections were completely out of line with reality. GM, for instance, based many of its assumptions on selling 14 million vehicles in 2010, when they didn't even crack the 9 million mark in 2008. As far as Chrysler is concerned, their problems should not be an issue of national importance. They certainly are not too big to failnor are they worthy of any kind of public assistance, since they are a private company 80% owned by equity investors, Cerberus Capital, which has at its head, former Treasury Secretary John Snow and long ago decided to put Bob Nardelli in charge of Chrysler, the same Bob Nardelli who oversaw, as CEO, the near-destruction of Home Depot (HD) . Cerberus has already shed itself of Daimler, the profitable German subsidiary, and plans to partner with Italian automaker Fiat, a company in the throes of its own meltdown.
If the managers at Fiat have any sense, they'll steer themselves away from this private group of corporate bunglers, as should the government and taxpayers. And if anyone thinks that CEO Rick Waggoner, who submitted his resignation Monday at the behest of the White House, should be the beneficiary of any sympathy, bear in mind that under Waggoner's leadership, GM lost nearly $100 billion dollars and continued to build cars, trucks, vans and SUVs that guzzle gas and have limited appeal as its market share shrank and its stock price cratered.
These two bankrupt automakers, like the corrupt, insolvent, worthless national banks, should be allowed to do what all companies which have ceased to be competitive do: fail, file bankruptcy and either liquidate or reorganize. There's no good cause to keep them functioning any longer even though the damage to the economy would be paramount. The UAW would see 180,000 workers furloughed, pensioners could lose most of their future benefits and bondholders would be forced to take 10% or less on their dollars.
Life gets very tough when you don't have a backstop to bail you out, but this fiasco is just a furtherance of the insane, contradictory polices emanating from the Capitol and White House. The government has become such a major intermediary into business and Wall Street that their refusal to dole out more corporate welfare to companies that don't get it, causes a stock market rout and a resumption of the fear factor which has gripped the country for months, but took a few weeks in abeyance during the recent bear market rally.
Today's losses sent every index and sector into a tailspin which actually started on Friday of last week and probably won't end until the market is back below 7000 and looking to retest the March 9 multi-year lows.
Looking at the markets realistically, the bounce off the lows was so rapid and mostly unwarranted that an equally-severe snapback should have been expected. Despite the closing numbers, stocks were down even more in late afternoon trading before a mini-rally and short-covering brought all of the indices off their lows of the day.
Bulls can take some heart in the idea that the markets didn't completely fall off a cliff, and that volume was not nearly as high as last week's, though it points up the conclusion of more savvy investors that there are still a good number of players out there waiting to be skinned by the bears in coming days and weeks.
According to Investors Intelligence's Weekly Sentiment Poll bearish sentiment at the market lows earlier in the month were not even 50%, checking in at 47.2% at the bottom, hardly an indication of a market bottom. Sentiment would have to be closer to 80%, signaling capitulation, a condition to which today may have put us closer. It now seems almost certain that before the end of summer the market will finally roll over and die, though a few more trillion of investor dollars will have to be vaporized before the message finally becomes clear to the massive numbers of ill-informed investors which populate all income levels, from novice to wizened veteran.
The US economy is wrecked beyond simple recession-like repair, our banking system at the top is dysfunctional (though many smaller local and regional banks are healthy and poised to grow), unemployment will continue to rise well past 10%, states and municipalities are broke, consumers tapped out, homeowners hunkered down against high taxes and utility bills and the federal government running out of excuses as fast as they concoct rescues.
We are in a world of hurt and if you don't recognize all of the patterns, you deserve to lose everything. It's that stark and simple.
Dow 7,522.02, -254.16 (3.27%)
NASDAQ 1,501.80, -43.40 (2.81%)
S&P 500 787.53, -28.41 (3.48%)
NYSE Composite 4,899.05, -197.59 (3.88%)
On the day, market internals were miserable and pointing towards even worse conditions. Declining issues overwhelmed advancers, 5373-1163, and while that's nearly a 5-1 ratio, it was closer to 8-1 midday, and will almost certainly approach those levels at least a couple of times in coming days and weeks. Stocks reaching new 52-week lows - moderated by the huge number of companies which had already collapsed by this time last year - numbered 109, as compared to the feeble 14 new highs. As stated above, volume was off a bit from last week's strong levels.
NYSE Volume 1,511,506,000
NASDAQ Volume 2,028,632,000
Commodities witnessed a resumption of the deflation trade, with crude oil taking a big hit, down $3.97, to $48.41. Gold lost $7.60, closing at $917.70. Silver shed 23 cents, to $13.03. Almost every other major commodity was traded lower, except natural gas, which finished unchanged at the depressed price of $3.80/mmbtu.
Other financial news was similarly dire. Washington Mutual (WaMu) and its key executives are the subject of a massive class action lawsuit, home foreclosures were sharply higher in February and JP Morgan Chase will refund over $4 million to credit card holders who began paying $10/per month in additional fees in January. The deal was struck under pressure from NY Attorney General Andrew Cuomo.
As the week progresses, more economic reports will be revealed, including home prices, consumer confidence, auto and truck sales, private sector employment, all leading up to Friday's non-farm payroll report for March and new unemployment statistics.
Hold onto your hats, but sell your stocks if you played and have any gains over the past few weeks.
Label:
Crylsler,
General Motors,
GM
Thursday, March 05, 2009
Stocks Routed Worldwide; NASDAQ Capitulates
Stock indices from Tokyo to Toronto suffered major losses again on Thursday as the global depression deepened and General Motors (GM) contemplated bankruptcy unless it receives additional financial support from the US government.
As the steady pounding continued, following the first gains in a week (yesterday), investors wiped out nearly double the amount of Wednesday's gains.
Dow 6,594.44, -281.40 (4.09%)
NASDAQ 1,299.59, -54.15 (4.00%)
S&P 500 682.55, -30.32 (4.25%)
NYSE Compos 4,267.60, -197.29 (4.42%)
There was no standout sector or industry spared from the widespread carnage, as the NASDAQ finally became the 4th major index to fall below the previous, November 20 lows. On that date, the NASDAQ closed at 1313. Today's close was 1% lower and comparable to October 2002 levels, when the NASDAQ bottomed out following the dotcom bust on October 9, at 1114.11.
As has been the case for months, US banks were at the center of the storm. Citigroup (C) traded below $1.00 for a brief time during the morning, closing down another 0.11, at 1.02. Bank of America (BAC) closed down 0.42, to 3.17, while JP Morgan Chase (JPM) tumbled 2.70, to 16.60. All of those were among the major losers of Dow components, though General Motors took the prize as the day's biggest, losing 0.34, to 1.86, a decline of 15.45%.
On the Dow, only 2 of 30 components gained ground. Pfizer (PFE) added 0.17, to 12.67. Wal-Mart (WMT) was up 1.26, to 49.75, as the nation's largest retailer saw improved same-store sales for February and increased its dividend to shareholders.
Market internals were a shambles, with decliners overwhelming advancing issues, 5823-842, a 7-1 ratio. New lows shot up to levels seen only in the September-November meltdown, with 1527 stocks reaching new 52-week lows versus only 7 new highs. Volume remained elevated, as it has over the past 7 sessions.
NYSE Volume 1,878,339,000
NASDAQ Volume 2,314,223,000
Oil futures were off $1.77, to $43.61. Gold emerged as a safe haven, up $21.10, to $927.80. Silver added 21 cents, to $13.12.
Prior to the opening bell on Friday, the Bureau of labor Statistics releases February Non-farm Payroll numbers. Expectations are for another 630,000 job losses.
As the steady pounding continued, following the first gains in a week (yesterday), investors wiped out nearly double the amount of Wednesday's gains.
Dow 6,594.44, -281.40 (4.09%)
NASDAQ 1,299.59, -54.15 (4.00%)
S&P 500 682.55, -30.32 (4.25%)
NYSE Compos 4,267.60, -197.29 (4.42%)
There was no standout sector or industry spared from the widespread carnage, as the NASDAQ finally became the 4th major index to fall below the previous, November 20 lows. On that date, the NASDAQ closed at 1313. Today's close was 1% lower and comparable to October 2002 levels, when the NASDAQ bottomed out following the dotcom bust on October 9, at 1114.11.
As has been the case for months, US banks were at the center of the storm. Citigroup (C) traded below $1.00 for a brief time during the morning, closing down another 0.11, at 1.02. Bank of America (BAC) closed down 0.42, to 3.17, while JP Morgan Chase (JPM) tumbled 2.70, to 16.60. All of those were among the major losers of Dow components, though General Motors took the prize as the day's biggest, losing 0.34, to 1.86, a decline of 15.45%.
On the Dow, only 2 of 30 components gained ground. Pfizer (PFE) added 0.17, to 12.67. Wal-Mart (WMT) was up 1.26, to 49.75, as the nation's largest retailer saw improved same-store sales for February and increased its dividend to shareholders.
Market internals were a shambles, with decliners overwhelming advancing issues, 5823-842, a 7-1 ratio. New lows shot up to levels seen only in the September-November meltdown, with 1527 stocks reaching new 52-week lows versus only 7 new highs. Volume remained elevated, as it has over the past 7 sessions.
NYSE Volume 1,878,339,000
NASDAQ Volume 2,314,223,000
Oil futures were off $1.77, to $43.61. Gold emerged as a safe haven, up $21.10, to $927.80. Silver added 21 cents, to $13.12.
Prior to the opening bell on Friday, the Bureau of labor Statistics releases February Non-farm Payroll numbers. Expectations are for another 630,000 job losses.
Label:
General Motors,
GM,
JP Morgan Chase,
JPM
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