Nothing, in the world of the financial markets, moves in a straight line, so it was only a matter of time that the stock indices would cease falling and post a day of positive, "green shoots" results, and today was that day.
Call it whatever you like - PPT manipulation, dead cat bounce, oversold conditions, snap-back rally - it's nothing out of the norm for markets to do these kinds of things, and, taking a word from Fed Chaiman Ben Bernanke, it is likely a "transitory" event, like the wind, which passes on and blows in another time and place.
Even with today's sudden upsurge reversal of fortune, volume was horrid and stocks finished well off their highs, with widespread selling occurring in the final hour. That's likely because today's move was highly orchestrated by the usual suspects, with aid from the Fed (remember, QE2 isn't over yet). Bonds were flipped and turned into stock purchases, mostly in the very same names that control 80% of the trading on the exchanges. You know the names; no need to repeat them here.
Getting right down to it, after sustaining six straight days of losses, this was nothing about which to get excited, that's for sure. For instance, even factoring in today's gains, the Dow is still off a whopping 445 points since May 31, and 686 points since the top on April 29 (12,810).
Anyone suggesting that it is anything other than a one-day event should be barred from ever commenting on stocks or financial issues, in perpetuity. Selling stocks will resume sooner, rather than later.
Dow 12,124.43, +75.49 (0.63%)
NASDAQ 2,684.87, +9.49 (0.35%)
S&P 500 1,289.00, +9.44 (0.74%)
NYSE Composite 8,149.65, +68.30 (0.85%)
Internals were slightly improved, with advancing issues topping decliners, 3538-2116. The NASDAQ was good for 26 new highs and 119 new lows; the NYSE saw 31 new highs and 70 new lows, making our combined reading 57 new highs and 189 new lows, a fifth straight session with the lows leading the way.
Volume? Come on, now.
NASDAQ Volume 1,686,693,375
NYSE Volume 3,489,525,750
Over in the commodity space, the aberration known as crude oil futures gained $1.19, to $101.93. There is no good reason for the price of oil to be this high. A stable price of around 470-80 per barrel would be sufficient to satisfy all parties without putting unnecessary pressure on end-product consumers. If there's any one thing that will keep a slow economy from improving, it is high fuel or food prices and we have them both. Of course, the government, usually quick to impose its will wherever it pleases, does nothing about this. To put it simply, our elected officials at all levels have ceased representing the people of America long ago. In a few words, THEY SUCK.
Oddly enough, gold bugs saw right through the rise in equities and bought more, bringing the price up by $6.60, to $1544.40. Gold is still up 25% on the year. Difficult to argue with those kinds of returns. Silver was also bid higher, up 75 cents, to $37.55.
Tomorrow, the weekend. Thank goodness.
Showing posts with label JPM. Show all posts
Showing posts with label JPM. Show all posts
Thursday, June 09, 2011
Wednesday, June 08, 2011
Stocks Continue Slide through Sixth Straight Session
Another day, another decline on US stock markets.
One should not be at all surprised by the development that stocks have found the path of least resistance to be lower. After all, they were goosed the past two years by almost $2 tillion in Federal Reserve subsidies and slippery dealings by the major banks.
Once again, stocks started out near their highs of the day, and, through a choppy session, ended in a massive sell-off into the close. The NASDAQ took the brunt of the beating, never making it out of negative territory the entire day. Again, this is unsurprising, as most of the momentum stocks which drove the two-year rally are indexed on the NASDAQ.
The bigger picture involves risk of all sorts, much of which is unquantifiable, such as the level of interest in, or general terms of, the bailout of Greece and whether or not the congressional clowns can come to some agreement on lifting the debt ceiling or not. Absent reliable information on either of those issues, and adding to the fact that there's scant economic data upon which to trade, stocks took another leg down in what is fast becoming a summer of discontent.
Perhaps the government agents and Wall Street wizards should be just happy to take their lumps in money, lest the American public come after them hammer and tong. They have destroyed not only the general economy of the nation, but have misused the public trust to a point at which there no longer is any.
The path to Dow 10,000 or S&P 1000 is likely going to be paved with the corpses of the major banks, still insolvent in many regards, especially Bank of America (BAC), which hit another tw-year low today, losing 0.11 to 10.54. Wells-Fargo (WFC), JP Morgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all took on water, though these stocks and the averages were all aided by a futile, though furious, late rally in the final fifteen minutes of trading.
Dow 12,048.48, -21.87 (0.18%)
NASDAQ 2,675.38, -26.18 (0.97%)
S&P 500 1,279.56, -5.38 (0.42%)
NYSE Composite 8,081.33, -50.34 (0.62%)
Despite the seemingly paltry losses, internals were crushed once again, and therein lies the problem with the markets. Almost everything is still overvalued and the reversal, by fear, extends to all equities. Declining issues hammered advancers, 4824-1767. On the NASDAQ, there were 22 new highs and 140 new lows, Over on the Big Board, 23 new highs, and 97 new lows, putting our totals at 45 new highs and 237 new lows, the fifth straight win for the lows, an expanding margin of difference and a sure sign the correction has further leg-stretching to do.
Volume perked up a bit from the previous two sessions, another indication that the selling pressure is intense and not about to abate.
NASDAQ Volume 2,038,875,125
NYSE Volume 4,442,987,500
Defying all logic, crude oil futures rose $1.65, to $100.74, as OPEC nations meet in Vienna, but came to no agreement on raising production quotas. It was another rough day from precious metals speculators, with gold down $6.90, to 1537.80, and silver off 17 cents, to $36.97.
Markets may get some relief from initial unemployment claims due out prior to the market open tomorrow, but counting on that is akin to betting the Cubs will make the playoffs. Not a sound bet.
One should not be at all surprised by the development that stocks have found the path of least resistance to be lower. After all, they were goosed the past two years by almost $2 tillion in Federal Reserve subsidies and slippery dealings by the major banks.
Once again, stocks started out near their highs of the day, and, through a choppy session, ended in a massive sell-off into the close. The NASDAQ took the brunt of the beating, never making it out of negative territory the entire day. Again, this is unsurprising, as most of the momentum stocks which drove the two-year rally are indexed on the NASDAQ.
The bigger picture involves risk of all sorts, much of which is unquantifiable, such as the level of interest in, or general terms of, the bailout of Greece and whether or not the congressional clowns can come to some agreement on lifting the debt ceiling or not. Absent reliable information on either of those issues, and adding to the fact that there's scant economic data upon which to trade, stocks took another leg down in what is fast becoming a summer of discontent.
Perhaps the government agents and Wall Street wizards should be just happy to take their lumps in money, lest the American public come after them hammer and tong. They have destroyed not only the general economy of the nation, but have misused the public trust to a point at which there no longer is any.
The path to Dow 10,000 or S&P 1000 is likely going to be paved with the corpses of the major banks, still insolvent in many regards, especially Bank of America (BAC), which hit another tw-year low today, losing 0.11 to 10.54. Wells-Fargo (WFC), JP Morgan Chase (JPM), Citigroup (C), Goldman Sachs (GS) and Morgan Stanley (MS) all took on water, though these stocks and the averages were all aided by a futile, though furious, late rally in the final fifteen minutes of trading.
Dow 12,048.48, -21.87 (0.18%)
NASDAQ 2,675.38, -26.18 (0.97%)
S&P 500 1,279.56, -5.38 (0.42%)
NYSE Composite 8,081.33, -50.34 (0.62%)
Despite the seemingly paltry losses, internals were crushed once again, and therein lies the problem with the markets. Almost everything is still overvalued and the reversal, by fear, extends to all equities. Declining issues hammered advancers, 4824-1767. On the NASDAQ, there were 22 new highs and 140 new lows, Over on the Big Board, 23 new highs, and 97 new lows, putting our totals at 45 new highs and 237 new lows, the fifth straight win for the lows, an expanding margin of difference and a sure sign the correction has further leg-stretching to do.
Volume perked up a bit from the previous two sessions, another indication that the selling pressure is intense and not about to abate.
NASDAQ Volume 2,038,875,125
NYSE Volume 4,442,987,500
Defying all logic, crude oil futures rose $1.65, to $100.74, as OPEC nations meet in Vienna, but came to no agreement on raising production quotas. It was another rough day from precious metals speculators, with gold down $6.90, to 1537.80, and silver off 17 cents, to $36.97.
Markets may get some relief from initial unemployment claims due out prior to the market open tomorrow, but counting on that is akin to betting the Cubs will make the playoffs. Not a sound bet.
Label:
BAC,
Bank of America,
Greece,
GS,
JP Morgan Chase,
JPM,
MS,
unemployment claims,
WFC
Wednesday, April 13, 2011
Obama Speaks, JP Morgan Pops, Stops, Feds Love Banks
Sometimes you just have to sit back and take it all in, which is precisely what marketeers did today after JP Morgan put out a bogus earnings report prior to the open, and President Obama put down a line in the sand for Republicans over upcoming budgets.
Market futures pointed higher prior to the open after JP Morgan Chase (JPM) announced 1st quarter results, saying they beat wall Street expectations of $1.15 per share with a resounding $1.28 in the quarter. This sent the major indices off to the races at the open, but as soon as discoveries were made that Morgan's earnings figure was boosted by a 0.29 per share reduction in credit loan loss reserves, things began to turn ugly, and in a hurry.
After opening up 62 points to the good, the Dow Jones Industrials were seeing red by noon. Likewise, JP Morgan's 62 cent gain turned into a 76 cent loss (45.88) at the low of the day, just after 2:00 pm EDT. By the close, Morgan and the Dow had regained some ground, though JPM still finished down 39 cents and was quoted lower in the after-hours.
Around 2:00 pm, President Obama offered a retort to Republican Paul Ryan's proposed 2012 budget plan in a speech at George Washington University. The President outlined plans for cuts in defense spending and saving in Medicare and reiterated his 2008 campaign pledge to scale back the Bush tax cuts, saying he went along with Republican plans to extend them last year only so he could save middle class taxes from rising.
Obama's plan, in simple terms plans to cut the budget deficit by $4 trillion over the next 12 years, keeping intact the two largest entitlement programs, Medicare and Social Security, which was not mentioned for any revisions.
While the president was speaking, markets gyrated in both directions, finally heading into the positive, though only slightly, by the close. At the very least, the president did a good job of setting the parameters for a budget fight that figures to be a battle royale on Capitol Hill through the summer and into the fall.
Even though the markets broke a four-day losing streak, gains were minimal, the up early, lower later signature of trading was straight out of the bear market playbook.
Dow 12,270.99, +7.41 (0.06%)
NASDAQ 2,761.52, +16.73 (0.61%)
S&P 500 1,314.41, +0.25 (0.02%)
NYSE Composite 8,367.31, +6.85 (0.08%)
Advancers took back the edge over decliners, 3493-2976, but new highs and new lows were split, with a 46-46 tie on the NASDAQ and new highs bettering new lows, 50-15 on the NYSE. Volume was, as usual, uninspired.
NASDAQ Volume 1,766,435,000
NYSE Volume 4,275,430,000
Commodities snapped back to life with WTI crude futures gaining 86 cents, up to $107.11 on the NYMEX, snapping two-days of delightful declines. Gold picked up a gain of $2.00, to $1,455.60, while silver added 17 cents to $40.24.
The budget deal worked out last Friday now appears to be ready to pass both houses without much dissent, though some members of both parties have signaled that they would vote against the measure due to ideological values. A vote is scheduled for the House on Thursday.
In other news affecting JP Morgan and its cohorts (the 14 largest US banks), federal regulators slapped the collective wrists of the banks, but imposed no sanctions, fines or plausible remedies to foreclosure and mortgage servicing problems which surfaced last fall during the "robo-signing" scandal.
The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. issued the settlement after markets had closed.
This "agreement" leaves conditions almost as they were, with the banks still holding all the cards and homeowners getting no relief. It is expected that foreclosures will proceed through the courts as they have, with judges scrutinizing individual cases for flawed paperwork and other transgressions routine to the practice of the banking cartel.
Without a workable framework, the process will likely bog down the real estate market for the next five to ten years, as title defects, lost notes, fraudulent assignments and other illegal practices are given a green light by the nation's regulators. Obviously, some things in Washington remain just the same, as regulators look the other way when it comes to their favorites sons and campaign contributors.
Market futures pointed higher prior to the open after JP Morgan Chase (JPM) announced 1st quarter results, saying they beat wall Street expectations of $1.15 per share with a resounding $1.28 in the quarter. This sent the major indices off to the races at the open, but as soon as discoveries were made that Morgan's earnings figure was boosted by a 0.29 per share reduction in credit loan loss reserves, things began to turn ugly, and in a hurry.
After opening up 62 points to the good, the Dow Jones Industrials were seeing red by noon. Likewise, JP Morgan's 62 cent gain turned into a 76 cent loss (45.88) at the low of the day, just after 2:00 pm EDT. By the close, Morgan and the Dow had regained some ground, though JPM still finished down 39 cents and was quoted lower in the after-hours.
Around 2:00 pm, President Obama offered a retort to Republican Paul Ryan's proposed 2012 budget plan in a speech at George Washington University. The President outlined plans for cuts in defense spending and saving in Medicare and reiterated his 2008 campaign pledge to scale back the Bush tax cuts, saying he went along with Republican plans to extend them last year only so he could save middle class taxes from rising.
Obama's plan, in simple terms plans to cut the budget deficit by $4 trillion over the next 12 years, keeping intact the two largest entitlement programs, Medicare and Social Security, which was not mentioned for any revisions.
While the president was speaking, markets gyrated in both directions, finally heading into the positive, though only slightly, by the close. At the very least, the president did a good job of setting the parameters for a budget fight that figures to be a battle royale on Capitol Hill through the summer and into the fall.
Even though the markets broke a four-day losing streak, gains were minimal, the up early, lower later signature of trading was straight out of the bear market playbook.
Dow 12,270.99, +7.41 (0.06%)
NASDAQ 2,761.52, +16.73 (0.61%)
S&P 500 1,314.41, +0.25 (0.02%)
NYSE Composite 8,367.31, +6.85 (0.08%)
Advancers took back the edge over decliners, 3493-2976, but new highs and new lows were split, with a 46-46 tie on the NASDAQ and new highs bettering new lows, 50-15 on the NYSE. Volume was, as usual, uninspired.
NASDAQ Volume 1,766,435,000
NYSE Volume 4,275,430,000
Commodities snapped back to life with WTI crude futures gaining 86 cents, up to $107.11 on the NYMEX, snapping two-days of delightful declines. Gold picked up a gain of $2.00, to $1,455.60, while silver added 17 cents to $40.24.
The budget deal worked out last Friday now appears to be ready to pass both houses without much dissent, though some members of both parties have signaled that they would vote against the measure due to ideological values. A vote is scheduled for the House on Thursday.
In other news affecting JP Morgan and its cohorts (the 14 largest US banks), federal regulators slapped the collective wrists of the banks, but imposed no sanctions, fines or plausible remedies to foreclosure and mortgage servicing problems which surfaced last fall during the "robo-signing" scandal.
The Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve and the Federal Deposit Insurance Corp. issued the settlement after markets had closed.
"The review uncovered unsafe and unsound practices, violations of law and foreclosure processes geared toward speed and quantity, instead of quality and accuracy," the OTS said in a statement.That qualifies as the understatement of the decade. Not a single banker or functionary has been indicted, nor have any of the banks in question been subject to any serious scrutiny over their abuses that likely deprived many homeowners of due process.
This "agreement" leaves conditions almost as they were, with the banks still holding all the cards and homeowners getting no relief. It is expected that foreclosures will proceed through the courts as they have, with judges scrutinizing individual cases for flawed paperwork and other transgressions routine to the practice of the banking cartel.
Without a workable framework, the process will likely bog down the real estate market for the next five to ten years, as title defects, lost notes, fraudulent assignments and other illegal practices are given a green light by the nation's regulators. Obviously, some things in Washington remain just the same, as regulators look the other way when it comes to their favorites sons and campaign contributors.
Label:
budget,
JP Morgan Chase,
JPM,
president,
President Obama
Monday, October 18, 2010
POMO Monday! Stocks Soar! BofA in the Clear!
The Fed executed a little $6.3 Billion POMO, which, as we have mentioned, is tantamount to giving the largest banks and brokerages free money with which to play the market. "Game on, dudes!" was heard in the offices of Goldman Sachs, Bank of America, et. al., about five to seven minutes into the session.
Gotta love that funny money! Let's dance!
Dow 11,143.69, +80.91 (0.73%)
NASDAQ 2,480.66, +11.89 (0.48%)
S&P 500 1,184.71, +8.52 (0.72%)
NYSE Composite 7,571.10, +50.50 (0.67%)
Up, up and away went the stock indices, with 80% of the trading being done by HTF "flash" computers using algorithms designed by NASA, DARPA or the CIA, no doubt. Advancers absolutely crshed decliners, 4249-2216. New highs bettered new lows, 440-56. Volume was on the wrong side of the toilet rim, but with the Fed pumping money into the system, and the computers all programmed to react to volume buying as a buy signal, there's almost no downside to this market, which, of course, is the whole big idea, anyway.
It's absolutely absurd, but, I would be remiss not to advise at least some jumping in at any level right now, but with the implicit understanding that stops have to be set very judiciously and that means just under your buy price. (Disclaimer: setting stops may alert the HTF computers to your trades and take them out with all due haste.)
NASDAQ Volume 1,642,727,625.00
NYSE Volume 4,996,276,500.0
It was a great day to own oil futures. The front-end contract flew ahead by $1.83 on no news or data, to $83.08. Late print on gold was up $3.40, at $1372.30. Silver also gained 11 cents, to $24.43.
Add this last bit of news to the "and you thought Usain Bolt was fast" file. Bank of America, which just announced a self-imposed halt to foreclosure proceedings in all 50 states last week, today announced that they would resume foreclosures in 23 judicial-foreclosure states. The bank says that they found NO ERRORS in the 102,000 cases they reviewed, but added that they would begin submitting new affidavits by October 25th.
Now, call me silly or just plain dumb, but why, if they found no errors, would they begin filing "new" affidavits. Just saying, if the old ones were OK, why do you draw up new ones. Incidentally, I wonder just how many people spent the last ten days reviewing these 102,000 documents, which, I'm assuming were scattered around offices in those 23 states?
If you had 1000 people reviewing those documents, they'd have to have done 100 apiece, or about ten per day. If it were 100 people, that would escalate to 100 pr day, and what kind of review could one perform at the rate of about 15 per hour?
As usual, that smells fishy to me, but what do I know? Well, I know that the nation's largest banks are rotten, crooked and exist only to separate Americans from their money and property, so excuse me if I don't buy BofA's argument that they've already undone some of their dirty work.
Not so incidentally, Bank of America (BAC) shares were up 0.36, or 3% on the day. Other major bank stocks, like JP Morgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C), were up similarly. Wells Fargo and Citgroup both posted gains in excess of 5%.
Happy daze!
Late add: Just found this nifty publishing tool, which allows you to make animated movies. Here's today's post:
Gotta love that funny money! Let's dance!
Dow 11,143.69, +80.91 (0.73%)
NASDAQ 2,480.66, +11.89 (0.48%)
S&P 500 1,184.71, +8.52 (0.72%)
NYSE Composite 7,571.10, +50.50 (0.67%)
Up, up and away went the stock indices, with 80% of the trading being done by HTF "flash" computers using algorithms designed by NASA, DARPA or the CIA, no doubt. Advancers absolutely crshed decliners, 4249-2216. New highs bettered new lows, 440-56. Volume was on the wrong side of the toilet rim, but with the Fed pumping money into the system, and the computers all programmed to react to volume buying as a buy signal, there's almost no downside to this market, which, of course, is the whole big idea, anyway.
It's absolutely absurd, but, I would be remiss not to advise at least some jumping in at any level right now, but with the implicit understanding that stops have to be set very judiciously and that means just under your buy price. (Disclaimer: setting stops may alert the HTF computers to your trades and take them out with all due haste.)
NASDAQ Volume 1,642,727,625.00
NYSE Volume 4,996,276,500.0
It was a great day to own oil futures. The front-end contract flew ahead by $1.83 on no news or data, to $83.08. Late print on gold was up $3.40, at $1372.30. Silver also gained 11 cents, to $24.43.
Add this last bit of news to the "and you thought Usain Bolt was fast" file. Bank of America, which just announced a self-imposed halt to foreclosure proceedings in all 50 states last week, today announced that they would resume foreclosures in 23 judicial-foreclosure states. The bank says that they found NO ERRORS in the 102,000 cases they reviewed, but added that they would begin submitting new affidavits by October 25th.
Now, call me silly or just plain dumb, but why, if they found no errors, would they begin filing "new" affidavits. Just saying, if the old ones were OK, why do you draw up new ones. Incidentally, I wonder just how many people spent the last ten days reviewing these 102,000 documents, which, I'm assuming were scattered around offices in those 23 states?
If you had 1000 people reviewing those documents, they'd have to have done 100 apiece, or about ten per day. If it were 100 people, that would escalate to 100 pr day, and what kind of review could one perform at the rate of about 15 per hour?
As usual, that smells fishy to me, but what do I know? Well, I know that the nation's largest banks are rotten, crooked and exist only to separate Americans from their money and property, so excuse me if I don't buy BofA's argument that they've already undone some of their dirty work.
Not so incidentally, Bank of America (BAC) shares were up 0.36, or 3% on the day. Other major bank stocks, like JP Morgan Chase (JPM), Wells Fargo (WFC) and Citigroup (C), were up similarly. Wells Fargo and Citgroup both posted gains in excess of 5%.
Happy daze!
Late add: Just found this nifty publishing tool, which allows you to make animated movies. Here's today's post:
Wednesday, October 13, 2010
Foreclosure-Gate Goes Full Monte; Stocks Soar!
Our stock markets have officially reached escape velocity today and have become permanently detached from reality.
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
With JP Morgan Chase CEO Jamie Dimon admitting today at his company's conference call that they no longer make use of MERS to foreclose mortgages, because lawyers contend that the system lacks the required paper trail to prove ownership.
Game, Set, Match!
This is an open admission by the head of one of the biggest mortgage servicers and foreclosure mills in the country that the system they themselves created causes breaks in the chain of title, meaning that just about every mortgage in the country written between 2003 and 2008 may be impaired as to legal, rightful ownership. Title has been clouded. Good luck foreclosing for the banks, but tough luck for homeowners current and paying, because when the time comes to sell your property, not only will it likely be worth less than what you paid, no title insurer will touch it without increased premium because your prior note will not be discharged since the legal note holder is a mystery or the actual note is MIA.
Welcome to the world of lawlessness created by moral hazard. All of this is 100% the fault of the banks, just as all previous chapters of this book of slime has been, from sloppy underwriting, to sub-prime, no-doc, no-down loans to defaults and now, no rights to foreclose.
Today, hundreds of thousands - if not millions - of Americans who haven't paid their mortgages in months, have just hit the lottery and the prize is a free house. Now, these home-dwellers can't sell the homes, but they sure can live in them, and, in the case of investor-owned homes, there's nothing precluding them from finding suitable tenants and renting them out. What a way to boost the economy. Bust up the banks, screw over the investors (who have no recourse) and let the people be. All that extra money can now go to buy iPads, toasters, clothes, toys, and just in time for Christmas!
Any mortgage that has the name MERS, as assignee or mortgagee or nominee, is likely void, as worthless as a blank piece of paper when it comes to proving ownership. Let the plaintiff's attorneys come forward and let the games - and years of intense, unstopping lawsuits - begin. The banksters just passed the attorney full employment act.
For one idea as to where this is all going, and in a hurry, here's a story about a California couple and their nine kids who, on the advice of their attorney, broke back into the home that they were recently foreclosed upon and evicted from and who are now claiming rightful ownership.
What's happening in Simi Valley today and making headlines, will become commonplace within coming weeks and months.
Now that the fuse has been lit by the banks, homeowners and non-cooperative courts, for the full implosion of the entire US economy (most of the Southwest and Southeast are already toast, along with Detroit), how has Wall Street reacted?
As stated in the opening paragraph, the minions roaming the canyons of lower Manhattan have completely divorced themselves from reality. Stocks galloped right out of the gate on the strength of the 3rd quarter earnings report from JP Morgan Chase (JPM). It didn't matter that the earnings were not very good and unimpressive, just that they came out. The signal to buy had been given by Fed head Ben Bernanke on Tuesday, via the minutes of the previous FOMC meeting, released yesterday, in which the mechanics of QE2 were thoroughly exposed.
Dow 11,096.08, +75.68 (0.69%)
NASDAQ 2,441.23, +23.31 (0.96%)
S&P 500 1,178.10, +8.33 (0.71%)
NYSE Composite 7,561.50, +71.88 (0.96%)
NASDAQ Volume 2,309,790,500
NYSE Volume 5,420,675,500
Advancing issues soared past decliners, 4313-1472. There were 738 new highs, to just 25 new lows, the widest spread since in a year. On an intra-day basis, the Dow approached the April highs, but as the day wore on, stocks began to sell off, the Dow finishing about 60 points shy of the day's high. Maybe there's some hope, though most people are still asking for a little bit of whatever it is they're smoking down on the exchange floors. Volume on the NASDAQ was solid, not so much on the NYSE.
Oil got a whiff of the fed-induced inflation soon to be visiting our shores, gaining $1.34, to $83.01, but gold stole the show, advancing $23.40, to a new record high of $1,370.50. Silver was no slouch, tacking on 79 cents (3.4%), to $23.93. WOW!
We are now certain that the end is near, with the original reptilian femme fatale, Condoleezza Rice, appearing on CNBC to tell us that confidence in America must be restored. OK, thanks, Condi, now back in your hole. And who the he-- let her out?
Label:
foreclosures,
gold,
JP Morgan Chase,
JPM
Friday, August 20, 2010
Stocks Finish with Wide Losses as Financial Continue Decline
For the third week in the past four, the major indices recored losses, which is especially poignant this week as the expiration of stock options usually encourages some upward momentum, but there was little to be found as another drab session marked the close of the week.
Stocks bottomed out just at the noon hour before rallying back somewhat, with fresh cash being put to use in what some must surely consider "bargains." There was some discussion on the internet Thursday about buying into Bank of America as the stock hit fresh 52-week lows, but broke down again on Friday to even lower levels.
Consistently the second most traded stock on the NYSE, Bank of America crumpled to a close of 12.87, marking a 34% decline from its closing high of 19.47 on April 15. In the span of four months, one of the most heavily traded stocks in the world has lost more than one third of its market cap. Something is definitely not right, and investors are voting with their feet, running away from the zombie bank as fast as they can.
What is wrong with Bank of America is also wrong with Citigroup (C), JP Mogan Chase (JPM) and Wells Fargo (WFC) to varying degrees. They are all victims of their own fortunes, made during the bubbly sub-prime housing boom days from 2003-2007 and crushed by the onslaught of those loans - and many more - going sour. These four banks share a raft of common themes, in that they all made fabulous amounts of money during the housing boom, executives were enriched grandly, all were TARP fund recipients and all were aided in the Spring of 2009 when the FASB allowed banks to employ significant judgement in "mark to market" accounting.
The rule allowed the banks enormous leeway in how they valued assets while at the same time reducing writedowns on impaired investments, including mortgage-backed securities. The rule change saved the banks from untold billions of dollars in impairment charges, but the same rule, as long as it remains in force, keeps bank capital bottled up and unable to be lent.
Honest accounting would probably put the nation's largest banks into receivership or bankruptcy and unleash a financial tsunami that would make the 2008 crash look like a gentle summer rain. In the meantime, many investors are apparently not about to wait for BofA and its counterparts to work out all of their bad, toxic and otherwise broken down investments. They are leaving the stock in droves.
BofA's brethren are in similar straits, taking on losses since mid-April of between 25-35%. Wells Fargo has dropped from 34.25 to as low as 24.27. JP Morgan Chase has gone from a high of 48.20 to as low as 35.16. And Citigroup, usually the most actively-traded stock on the NYSE, has dipped from 5 in mid-April to 3.75 today, a neat, 25% haircut.
While Wall Street pounds the table over Washington's inaction on the fiscal front, lawmakers in Washington are eerily quiet about the fate of the nation's largest banks, seeming to want the nightmare scenario of another Japan-style deflation to just go away. The truth is that they have no clue what to do next, relying on the Federal Reserve to sop up excesses in the default markets and keep interest rates at ZERO until something good happens, whatever that might be. Washington politicians are only interested in keeping their jobs, meaning that they will purposely mislead the public into a false sense of stability until the elections this November.
In the meantime, the nation suffers and America's fiscal problems become worse by the day as the corrective measures that would have already kicked these banks to the collective curbs have not been even mentioned. Bad assets need to be written down and the companies need to take their licks, but that solution is seen as messy and untenable by the ruling elite.
The entire situation reeks of insider deals, secrecy, mismanagement and falsehood, and it is killing the US economy, little by little, day in and day out.
Dow 10,213.62, -57.59 (0.56%)
NASDAQ 2,179.76, +0.81 (0.04%)
S&P 500 1,071.69, -3.94 (0.37%)
NYSE Composite 6,813.15, -37.30 (0.54%)
On the day, there were more losers than winners, by a 3567-2778 tally. Tellingly, new lows surpassed new highs, 259-226, signaling that those who were buying all afternoon were either delusional or just misguided. The markets appear ready to break down once again to fresh lows. Dipping below the 9680 mark on the Dow over the next month is certainly in the equation. Volume was a little better than most of this week, though that's another negative. Higher volume on losing days indicates, quite simply, that more stocks are being sold than bought.
NASDAQ Volume 1,913,865,250.00
NYSE Volume 4,309,225,000
Stocks were not the only asset class being beaten down. Crude oil for September delivery fell another 97 cents, to $73.46 on the NYMEX. Gold lost $6.60, to $1,227.20, and silver was hammered down nearly 2%, losing 37 cents to close the week at $17.98 the ounce.
Deflation has come, and has actually been pushing on stocks, bond yields and home prices for the past three years. Only the federal government's ability to throw large amounts of money around has kept the economy from complete collapse, though the band-aid approach seems to have failed miserably and the eventual downturn will be more severe than anyone can imagine.
Stocks bottomed out just at the noon hour before rallying back somewhat, with fresh cash being put to use in what some must surely consider "bargains." There was some discussion on the internet Thursday about buying into Bank of America as the stock hit fresh 52-week lows, but broke down again on Friday to even lower levels.
Consistently the second most traded stock on the NYSE, Bank of America crumpled to a close of 12.87, marking a 34% decline from its closing high of 19.47 on April 15. In the span of four months, one of the most heavily traded stocks in the world has lost more than one third of its market cap. Something is definitely not right, and investors are voting with their feet, running away from the zombie bank as fast as they can.
What is wrong with Bank of America is also wrong with Citigroup (C), JP Mogan Chase (JPM) and Wells Fargo (WFC) to varying degrees. They are all victims of their own fortunes, made during the bubbly sub-prime housing boom days from 2003-2007 and crushed by the onslaught of those loans - and many more - going sour. These four banks share a raft of common themes, in that they all made fabulous amounts of money during the housing boom, executives were enriched grandly, all were TARP fund recipients and all were aided in the Spring of 2009 when the FASB allowed banks to employ significant judgement in "mark to market" accounting.
The rule allowed the banks enormous leeway in how they valued assets while at the same time reducing writedowns on impaired investments, including mortgage-backed securities. The rule change saved the banks from untold billions of dollars in impairment charges, but the same rule, as long as it remains in force, keeps bank capital bottled up and unable to be lent.
Honest accounting would probably put the nation's largest banks into receivership or bankruptcy and unleash a financial tsunami that would make the 2008 crash look like a gentle summer rain. In the meantime, many investors are apparently not about to wait for BofA and its counterparts to work out all of their bad, toxic and otherwise broken down investments. They are leaving the stock in droves.
BofA's brethren are in similar straits, taking on losses since mid-April of between 25-35%. Wells Fargo has dropped from 34.25 to as low as 24.27. JP Morgan Chase has gone from a high of 48.20 to as low as 35.16. And Citigroup, usually the most actively-traded stock on the NYSE, has dipped from 5 in mid-April to 3.75 today, a neat, 25% haircut.
While Wall Street pounds the table over Washington's inaction on the fiscal front, lawmakers in Washington are eerily quiet about the fate of the nation's largest banks, seeming to want the nightmare scenario of another Japan-style deflation to just go away. The truth is that they have no clue what to do next, relying on the Federal Reserve to sop up excesses in the default markets and keep interest rates at ZERO until something good happens, whatever that might be. Washington politicians are only interested in keeping their jobs, meaning that they will purposely mislead the public into a false sense of stability until the elections this November.
In the meantime, the nation suffers and America's fiscal problems become worse by the day as the corrective measures that would have already kicked these banks to the collective curbs have not been even mentioned. Bad assets need to be written down and the companies need to take their licks, but that solution is seen as messy and untenable by the ruling elite.
The entire situation reeks of insider deals, secrecy, mismanagement and falsehood, and it is killing the US economy, little by little, day in and day out.
Dow 10,213.62, -57.59 (0.56%)
NASDAQ 2,179.76, +0.81 (0.04%)
S&P 500 1,071.69, -3.94 (0.37%)
NYSE Composite 6,813.15, -37.30 (0.54%)
On the day, there were more losers than winners, by a 3567-2778 tally. Tellingly, new lows surpassed new highs, 259-226, signaling that those who were buying all afternoon were either delusional or just misguided. The markets appear ready to break down once again to fresh lows. Dipping below the 9680 mark on the Dow over the next month is certainly in the equation. Volume was a little better than most of this week, though that's another negative. Higher volume on losing days indicates, quite simply, that more stocks are being sold than bought.
NASDAQ Volume 1,913,865,250.00
NYSE Volume 4,309,225,000
Stocks were not the only asset class being beaten down. Crude oil for September delivery fell another 97 cents, to $73.46 on the NYMEX. Gold lost $6.60, to $1,227.20, and silver was hammered down nearly 2%, losing 37 cents to close the week at $17.98 the ounce.
Deflation has come, and has actually been pushing on stocks, bond yields and home prices for the past three years. Only the federal government's ability to throw large amounts of money around has kept the economy from complete collapse, though the band-aid approach seems to have failed miserably and the eventual downturn will be more severe than anyone can imagine.
Label:
BAC,
Bank of America,
CitiGroup,
JPM,
Wells Fargo
Thursday, July 15, 2010
Yes, That Was the End of the Rally
As queried yesterday, the split decision by the major indices, resulting in paltry gains and losses across the board, appears to have signaled at least a pause of optimism for the markets.
News flows were both good and bad (depending on one's perspective) prior to the open, highlighted by JP Morgan Chase (JPM) trying to get away with reporting second quarter results which included unusual one-time gains. The usual protocol is for one-time charges or gains to be stripped out, as the vast majority of analysts predict on such a basis.
The Financial Times reports that JPM's earnings "Signal end of Wall St. rebound" and even Wall Street darling CEO Jamie Dimon couldn't get away with reporting $1.09 per share, when analysts were seeking 70 cents, excluding one-time charges. JPM decided to pad earnings by lowering their loan-loss reserves by $1.5 billion. Stripping those out, the venerable House of Morgan made 75 cents per share in the quarter, though there were likely other crafty accounting tricks employed.
For their efforts, investors sold off the nation's second-largest bank to the tune of a little more than a point at the lows of the day. When all was said and done, however, and the Wall Street connivers couldn't stand a little decline, all stocks were boosted in a furious final half-hour, which saw the Dow gain about 70 points and JP Morgan close 11 cents higher on the day, closing at 40.46.
The final push was attributed to passage of the long-overdue Financial Regulation bill by the Senate, but stocks finished mixed again. As the Dow and NASDAQ finished higher on Wednesday, today's two winners were the S&P 500 and NYSE Composite, a complete reversal. So, for the past two days, all the markets did was vaporize a lot of money.
Also prior to the open Initial jobless claims for the week reportedly totaled 429,000, down 29,000 from the previous week. Following last week's precipitous drop, continuing claims climbed by almost 250,000 to 4.68 million. Separately, the Producer Price Index (PPI) for June fell 0.5% month-over-month, another sure sign that deflation is well-entrenched.
The NY Fed Empire Manufacturing Index fell to 5.08 in July, from 19.57 in June, a seven-month low.
Industrial production gained 0.1% in June, while Capacity Utilization stalled out at 74.1% over the same span. All of these indicators cause stocks to sell off at the open, but career further and deeper into the red after 10:00 am when the Philadelphia Fed announced that their manufacturing index fell from 8.0 in June to 5.0 in July.
If there isn't a double-dip or recession headed our way, you sure can't tell it from the spate of negative statistics sprouting from every corner of the economy.
Dow 10,359.31, -7.41 (0.07%)
NASDAQ 2,249.08, -0.76 (0.03%)
S&P 500 1,096.48, +1.31 (0.12%)
NYSE Composite 6,916.81, +13.45 (0.19%)
Decliners again led advancing issues, 3601-2789, and new highs remained ahead of new lows, 172-71. Volume was weak, owing to the uncertainty of the marketplace.
NASDAQ Volume 1,980,588,625
NYSE Volume 5,214,455,500
Crude oil sold off, losing 66 cents, to $76.62, but gold was higher once more, up $1.30, to $1,208.10. Silver gained 7 cents, to $18.35. All traders in commodities are due for a rude awakening at some point, when deflationary forces can no longer be contained and demand eventually falls off a table. Those not in cash (unlike myself and ardent followers of this blog) should begin shedding all semi-liquid assets, including futures contracts, as all signs point to a resumption of the bear market, though this time bottoms could be severe - far lower than expected.
After the final bell, Google (GOOG) was ravaged as it missed analyst expectations of $6.52, by seven cents, or $6.45 per share. To understand the absurdity of Wall Street, one must realize that Google is among the most profitable companies in the world. GAAP operating income (revenues after expenses) was $2.37 billion, which is a pretty good sum of money for any three-month period. Nonetheless, some traders saw fit to wallop the stock down more than 20 points in after hours trading, or, by more than 4%.
Maybe it was a touch overvalued at $494 a share, or, 22 times earnings. Live and learn.
This earnings season can't be over with already, can it? We've just gotten started. There are sure to be wild gyrations tomorrow on options expiration and over the next two weeks, which will only be fun if you're winning.
News flows were both good and bad (depending on one's perspective) prior to the open, highlighted by JP Morgan Chase (JPM) trying to get away with reporting second quarter results which included unusual one-time gains. The usual protocol is for one-time charges or gains to be stripped out, as the vast majority of analysts predict on such a basis.
The Financial Times reports that JPM's earnings "Signal end of Wall St. rebound" and even Wall Street darling CEO Jamie Dimon couldn't get away with reporting $1.09 per share, when analysts were seeking 70 cents, excluding one-time charges. JPM decided to pad earnings by lowering their loan-loss reserves by $1.5 billion. Stripping those out, the venerable House of Morgan made 75 cents per share in the quarter, though there were likely other crafty accounting tricks employed.
For their efforts, investors sold off the nation's second-largest bank to the tune of a little more than a point at the lows of the day. When all was said and done, however, and the Wall Street connivers couldn't stand a little decline, all stocks were boosted in a furious final half-hour, which saw the Dow gain about 70 points and JP Morgan close 11 cents higher on the day, closing at 40.46.
The final push was attributed to passage of the long-overdue Financial Regulation bill by the Senate, but stocks finished mixed again. As the Dow and NASDAQ finished higher on Wednesday, today's two winners were the S&P 500 and NYSE Composite, a complete reversal. So, for the past two days, all the markets did was vaporize a lot of money.
Also prior to the open Initial jobless claims for the week reportedly totaled 429,000, down 29,000 from the previous week. Following last week's precipitous drop, continuing claims climbed by almost 250,000 to 4.68 million. Separately, the Producer Price Index (PPI) for June fell 0.5% month-over-month, another sure sign that deflation is well-entrenched.
The NY Fed Empire Manufacturing Index fell to 5.08 in July, from 19.57 in June, a seven-month low.
Industrial production gained 0.1% in June, while Capacity Utilization stalled out at 74.1% over the same span. All of these indicators cause stocks to sell off at the open, but career further and deeper into the red after 10:00 am when the Philadelphia Fed announced that their manufacturing index fell from 8.0 in June to 5.0 in July.
If there isn't a double-dip or recession headed our way, you sure can't tell it from the spate of negative statistics sprouting from every corner of the economy.
Dow 10,359.31, -7.41 (0.07%)
NASDAQ 2,249.08, -0.76 (0.03%)
S&P 500 1,096.48, +1.31 (0.12%)
NYSE Composite 6,916.81, +13.45 (0.19%)
Decliners again led advancing issues, 3601-2789, and new highs remained ahead of new lows, 172-71. Volume was weak, owing to the uncertainty of the marketplace.
NASDAQ Volume 1,980,588,625
NYSE Volume 5,214,455,500
Crude oil sold off, losing 66 cents, to $76.62, but gold was higher once more, up $1.30, to $1,208.10. Silver gained 7 cents, to $18.35. All traders in commodities are due for a rude awakening at some point, when deflationary forces can no longer be contained and demand eventually falls off a table. Those not in cash (unlike myself and ardent followers of this blog) should begin shedding all semi-liquid assets, including futures contracts, as all signs point to a resumption of the bear market, though this time bottoms could be severe - far lower than expected.
After the final bell, Google (GOOG) was ravaged as it missed analyst expectations of $6.52, by seven cents, or $6.45 per share. To understand the absurdity of Wall Street, one must realize that Google is among the most profitable companies in the world. GAAP operating income (revenues after expenses) was $2.37 billion, which is a pretty good sum of money for any three-month period. Nonetheless, some traders saw fit to wallop the stock down more than 20 points in after hours trading, or, by more than 4%.
Maybe it was a touch overvalued at $494 a share, or, 22 times earnings. Live and learn.
This earnings season can't be over with already, can it? We've just gotten started. There are sure to be wild gyrations tomorrow on options expiration and over the next two weeks, which will only be fun if you're winning.
Label:
deflation,
GOOG,
Google,
JP Morgan Chase,
JPM
Friday, January 15, 2010
Got Bank Stocks? Sell Them on Monday.
Ever since the financial meltdown - which actually began in August of 2007 (Trust me, I'm a doctor.) when the Primary Trend in the Down Jones Industrials turned from a bull to a bear - the banks have gotten a lot of attention. Many of us do our banking at either a locally-owned bank or a friendly Credit Union. If you're smart enough to have made the decision to keep your money out of major national banks, good or you.
The too-big-to-fail national banks - Bank of America, Wells Fargo, Citigroup and JP Morgan Chase - also known as money center banks, are the main reason for the economic calamity which still grips this country, and to a lesser extent, the rest of the world. These were the ones engaged in all that risky behavior with sub-prime mortgages, credit default swaps and, more recently, the bailouts. Add to them Goldman Sachs and Morgan Stanley and you have the gang of six which nearly brought down Western capitalism as we know it.
Two of their brethren - Bear Stearns and Lehman Bros. - could not be saved, and were more than likely swallowed up more or less whole to hide the extent of the fraud, inside dealings, manipulations and other horse-trading that was so widespread during the late 90s and though the first years of the new millennium. What's troubling is that they are nowhere near out of the woods. The four big banks mentioned above are nearly insolvent. Only free money from the Federal Reserve, in the form of overnight loans at just about ZERO percent, has kept them from complete collapse. They are still poring though the toxic assets on their books, hiding and keeping off market millions of foreclosed homes and struggling to stay in business.
In case you're unaware of the ongoing problems with the big banks, just consider: JP Morgan's provision for credit losses totaled $7.28 billion during the fourth quarter.
That's about all you have to know... well, and that the other banks will report similar losses. Somehow, through financial alchemy which only the banks can perform, JP Morgan Chase posted a 4th quarter profit. Let's face it, They're full of brown stuff. Credit card delinquencies were at 8.64% in the 4th quarter. People are defaulting on credit cards at an historic rate. They're also walking away from homes in droves, many of them because they are upside-down, in other words, the amount of the mortgage exceeds the fair market price of the home.
Without work and with mortgages higher than the value of their homes, the latest trend is to make a strategic default, either through bankruptcy or by just failing to make mortgage payments, leading to the eventual foreclosure. This is what's known as a self-reinforcing feedback loop. The more home prices fall, the more people default, leading to more foreclosures and lower prices again. Soon enough, it's going to become cheaper to rent than to own as vulture landlords scoop up the foreclosed properties at a fraction of their value and rent them out to strapped, credit-less former homeowners.
The banks will never survive the onslaught of foreclosures that are due to escalate once again this Spring. Common practices by the banks now are to offer buy-downs, short sales, loan modifications and extensions in order to avoid foreclosure. Once a property is foreclosed upon, the banks are on the hook for the upkeep of the property and the taxes. With homes in some areas sitting on the market for a year to two years, eventually selling for much less than the foreclosed value, the banks are in a tough spot and doing all they can to prevent foreclosure, a lengthy, expensive process which seldom produces a positive result.
Eventually, in a foreclosure, the bank gets the property, the homeowner is put out and the vacant property deteriorates, leading to further losses. There are numerous reports, especially in the Northeastern "rust belt" of banks starting foreclosures but never finishing the process. Homeowners, thinking they have to bail, leave the property, only to receive tax bills later on, because the bank did not proceed with the sheriff's sale.
The whole mess is not going to end soon or well. It's going to take 6-10 years for the banks to work off the excesses of the sub-prime credit expansion. In The meantime, property values and interest rates will remain at historically low levels. If you own shares of any of the aforementioned banks, you should dump them if you haven't already. In fact, with the market close to highs, today could have been a warning shot for further declines to come. The economy continues to stumble along and eventually, the stock wizards will get out of the way, Government bailouts and stimulus have only paved the way for another round of declines in the stock market and in prices generally.
Dow 10,609.65, -100.90 (0.94%)
NASDAQ 2,287.99, -28.75 (1.24%)
S&P 500 1,136.03, -12.43 (1.08%)
NYSE Composite 7,356.79, -91.73 (1.23%)
Losers beat winners by a wide margin, 4664-1864; there were still 340 new highs, to just 44 new lows. Volume was substantially better than it has been all week. Uh, oh.
NYSE Volume 5,426,332,500
NASDAQ Volume 2,662,195,750
With the dollar stronger, oil took a nosedive, losing $1.44, to $78.00 (still too high). Gold lost $12.00, to $1,131.00. Silver was down 22 cents, to $18.44. The pause in the rise of the precious metals may be signaling a buy. If the economy worsens, the dollar should weaken (though as gauged against other currencies, some of which aren't doing very well themselves, the dollar may just waffle around), sending gold and silver higher. Even if the dollar doesn't lose value, the metals may still be the play as more and more people look for their perceived safety.
Tip for the day: Go to a coin dealer and buy a common silver dollar, or, as many as you can reasonably afford to put away for a couple of years. It's a near-certainty they'll be worth just as much or more in 2012. You can't say that about any other asset class, except maybe bonds.
The too-big-to-fail national banks - Bank of America, Wells Fargo, Citigroup and JP Morgan Chase - also known as money center banks, are the main reason for the economic calamity which still grips this country, and to a lesser extent, the rest of the world. These were the ones engaged in all that risky behavior with sub-prime mortgages, credit default swaps and, more recently, the bailouts. Add to them Goldman Sachs and Morgan Stanley and you have the gang of six which nearly brought down Western capitalism as we know it.
Two of their brethren - Bear Stearns and Lehman Bros. - could not be saved, and were more than likely swallowed up more or less whole to hide the extent of the fraud, inside dealings, manipulations and other horse-trading that was so widespread during the late 90s and though the first years of the new millennium. What's troubling is that they are nowhere near out of the woods. The four big banks mentioned above are nearly insolvent. Only free money from the Federal Reserve, in the form of overnight loans at just about ZERO percent, has kept them from complete collapse. They are still poring though the toxic assets on their books, hiding and keeping off market millions of foreclosed homes and struggling to stay in business.
In case you're unaware of the ongoing problems with the big banks, just consider: JP Morgan's provision for credit losses totaled $7.28 billion during the fourth quarter.
That's about all you have to know... well, and that the other banks will report similar losses. Somehow, through financial alchemy which only the banks can perform, JP Morgan Chase posted a 4th quarter profit. Let's face it, They're full of brown stuff. Credit card delinquencies were at 8.64% in the 4th quarter. People are defaulting on credit cards at an historic rate. They're also walking away from homes in droves, many of them because they are upside-down, in other words, the amount of the mortgage exceeds the fair market price of the home.
Without work and with mortgages higher than the value of their homes, the latest trend is to make a strategic default, either through bankruptcy or by just failing to make mortgage payments, leading to the eventual foreclosure. This is what's known as a self-reinforcing feedback loop. The more home prices fall, the more people default, leading to more foreclosures and lower prices again. Soon enough, it's going to become cheaper to rent than to own as vulture landlords scoop up the foreclosed properties at a fraction of their value and rent them out to strapped, credit-less former homeowners.
The banks will never survive the onslaught of foreclosures that are due to escalate once again this Spring. Common practices by the banks now are to offer buy-downs, short sales, loan modifications and extensions in order to avoid foreclosure. Once a property is foreclosed upon, the banks are on the hook for the upkeep of the property and the taxes. With homes in some areas sitting on the market for a year to two years, eventually selling for much less than the foreclosed value, the banks are in a tough spot and doing all they can to prevent foreclosure, a lengthy, expensive process which seldom produces a positive result.
Eventually, in a foreclosure, the bank gets the property, the homeowner is put out and the vacant property deteriorates, leading to further losses. There are numerous reports, especially in the Northeastern "rust belt" of banks starting foreclosures but never finishing the process. Homeowners, thinking they have to bail, leave the property, only to receive tax bills later on, because the bank did not proceed with the sheriff's sale.
The whole mess is not going to end soon or well. It's going to take 6-10 years for the banks to work off the excesses of the sub-prime credit expansion. In The meantime, property values and interest rates will remain at historically low levels. If you own shares of any of the aforementioned banks, you should dump them if you haven't already. In fact, with the market close to highs, today could have been a warning shot for further declines to come. The economy continues to stumble along and eventually, the stock wizards will get out of the way, Government bailouts and stimulus have only paved the way for another round of declines in the stock market and in prices generally.
Dow 10,609.65, -100.90 (0.94%)
NASDAQ 2,287.99, -28.75 (1.24%)
S&P 500 1,136.03, -12.43 (1.08%)
NYSE Composite 7,356.79, -91.73 (1.23%)
Losers beat winners by a wide margin, 4664-1864; there were still 340 new highs, to just 44 new lows. Volume was substantially better than it has been all week. Uh, oh.
NYSE Volume 5,426,332,500
NASDAQ Volume 2,662,195,750
With the dollar stronger, oil took a nosedive, losing $1.44, to $78.00 (still too high). Gold lost $12.00, to $1,131.00. Silver was down 22 cents, to $18.44. The pause in the rise of the precious metals may be signaling a buy. If the economy worsens, the dollar should weaken (though as gauged against other currencies, some of which aren't doing very well themselves, the dollar may just waffle around), sending gold and silver higher. Even if the dollar doesn't lose value, the metals may still be the play as more and more people look for their perceived safety.
Tip for the day: Go to a coin dealer and buy a common silver dollar, or, as many as you can reasonably afford to put away for a couple of years. It's a near-certainty they'll be worth just as much or more in 2012. You can't say that about any other asset class, except maybe bonds.
Label:
BAC,
Bank of America,
banks,
C,
CitiGroup,
JP Morgan Chase,
JPM
Tuesday, December 15, 2009
Ending String of Advances, Markets Lower Ahead of Fed
Was Monday the top?
A day after reaching 14-month highs, stocks trended lower on Tuesday on inflationary PPI data (+1.8%, more than double the predicted rise) and a strengthening US Dollar.
It was a confusing day fro traders in everything from stocks to currencies to commodities as markets moved in unusual directions in relation to each other. Oil managed to post its first gain after nine straight sessions in the red, while stocks broke a string of five straight winning sessions. Gold and silver fought against the flat line all day long.
Other economic news items sent mixed messages. The Empire State manufacturing index suffered a steep decline, dropping to a level of 2.55 in December after posting a figure of 23.51 in November. Nationally, capacity utilization continued to improve, up to 71.3% in November, following a reading of 70.6% in October.
Meanwhile, fears of more banking capitulation in Europe took on new meaning as Austria nationalized a major regional bank overnight.
Also weighing on the market was the issuance of more than $50 billion in new stock hitting the markets, stemming from the repayment of TARP funds by Bank of America, Citigroup and Wells Fargo. The idea that the market could sustain itself with so much new paper on the street without as much as a hiccup stoked the backs of the bulls. Shares of major banks, including Dow components JP Morgan Chase (JPM) and Bank of America (BAC) fell sharply during the session, however.
Struggling through most of the day in the red, the major indices slumped to intra-day lows in the final hour even though the losses were somewhat compromised by the release of comments from Fed Chairman Ben Bernanke with less than 15 minutes left in the trading day. Those comments, obviously timed to prevent a major sell-off prior to tomorrow's FOMC policy statement, cut the losses on the Dow by about 1/3. Nonetheless, stocks finished near the lows of the day with many investors seeking clarity on a range of issues from inflation to whether China would continue buying US treasuries.
Dow 10,452.00, -49.05 (0.47%)
NASDAQ 2,201.05, -11.05 (0.50%)
S&P 500 1,107.93, -6.18 (0.55%)
NYSE Composite 7,141.44, -45.05 (0.63%)
Market internals were clearly bearish. Losers beat winners, 3993-2529. New highs continued to outpace new lows, though by a margin less than Monday's extreme, 423-70.
NYSE Volume 5,604,492,500
NASDAQ Volume 1,921,278,875
Crude oil for January delivery was up $1.18, to $70.69. Gold lost $1.10, to $1,122.70, while silver gained 13 cents, to $17.47.
There was more than enough conflicting data and news to confound investors, and, if markets hate anything, it is uncertainty, of which there was an oversupply.
The avalanche of data will only worse on Wednesday, with November CPI, building permits, housing starts and the Treasury's current account balance on tap prior to the opening bell. Shortly after 2:00 pm, the Fed is expected to keep interest rates steady, though the statement wording will be closely watched for signs that the central bank may be considering raising rates.
It seems that the Fed has already tipped its hand concerning the all-important statement, not wanting to destroy the rally so close to Christmas. There's something to be said about Fed Chairman Bernanke: he definitely does not want to take away the punch bowl at the height of the party, but eventually that is what he will be forced to do. In the meantime, Treasuries have been rising over the past two months, which should serve as signal enough for investors that the top may already be in for stocks, or, at the very least, very close.
Wall Street has had a phenomenal year, considering how it began. Whether the markets will sustain themselves though the end of the year will be partially answered tomorrow after 2:00 pm.
A day after reaching 14-month highs, stocks trended lower on Tuesday on inflationary PPI data (+1.8%, more than double the predicted rise) and a strengthening US Dollar.
It was a confusing day fro traders in everything from stocks to currencies to commodities as markets moved in unusual directions in relation to each other. Oil managed to post its first gain after nine straight sessions in the red, while stocks broke a string of five straight winning sessions. Gold and silver fought against the flat line all day long.
Other economic news items sent mixed messages. The Empire State manufacturing index suffered a steep decline, dropping to a level of 2.55 in December after posting a figure of 23.51 in November. Nationally, capacity utilization continued to improve, up to 71.3% in November, following a reading of 70.6% in October.
Meanwhile, fears of more banking capitulation in Europe took on new meaning as Austria nationalized a major regional bank overnight.
Also weighing on the market was the issuance of more than $50 billion in new stock hitting the markets, stemming from the repayment of TARP funds by Bank of America, Citigroup and Wells Fargo. The idea that the market could sustain itself with so much new paper on the street without as much as a hiccup stoked the backs of the bulls. Shares of major banks, including Dow components JP Morgan Chase (JPM) and Bank of America (BAC) fell sharply during the session, however.
Struggling through most of the day in the red, the major indices slumped to intra-day lows in the final hour even though the losses were somewhat compromised by the release of comments from Fed Chairman Ben Bernanke with less than 15 minutes left in the trading day. Those comments, obviously timed to prevent a major sell-off prior to tomorrow's FOMC policy statement, cut the losses on the Dow by about 1/3. Nonetheless, stocks finished near the lows of the day with many investors seeking clarity on a range of issues from inflation to whether China would continue buying US treasuries.
Dow 10,452.00, -49.05 (0.47%)
NASDAQ 2,201.05, -11.05 (0.50%)
S&P 500 1,107.93, -6.18 (0.55%)
NYSE Composite 7,141.44, -45.05 (0.63%)
Market internals were clearly bearish. Losers beat winners, 3993-2529. New highs continued to outpace new lows, though by a margin less than Monday's extreme, 423-70.
NYSE Volume 5,604,492,500
NASDAQ Volume 1,921,278,875
Crude oil for January delivery was up $1.18, to $70.69. Gold lost $1.10, to $1,122.70, while silver gained 13 cents, to $17.47.
There was more than enough conflicting data and news to confound investors, and, if markets hate anything, it is uncertainty, of which there was an oversupply.
The avalanche of data will only worse on Wednesday, with November CPI, building permits, housing starts and the Treasury's current account balance on tap prior to the opening bell. Shortly after 2:00 pm, the Fed is expected to keep interest rates steady, though the statement wording will be closely watched for signs that the central bank may be considering raising rates.
It seems that the Fed has already tipped its hand concerning the all-important statement, not wanting to destroy the rally so close to Christmas. There's something to be said about Fed Chairman Bernanke: he definitely does not want to take away the punch bowl at the height of the party, but eventually that is what he will be forced to do. In the meantime, Treasuries have been rising over the past two months, which should serve as signal enough for investors that the top may already be in for stocks, or, at the very least, very close.
Wall Street has had a phenomenal year, considering how it began. Whether the markets will sustain themselves though the end of the year will be partially answered tomorrow after 2:00 pm.
Label:
BAC,
Bank of America,
Ben Bernanke,
FOMC,
JPM
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
Tuesday, February 17, 2009
What's in Your Wallet? Not Much, Says Capital One
I'm not sure, but probably more than 30% of all adult Americans have a Capital One credit card. I used to have two, before the company - kicking and screaming all the way - finally acceded to my demands to combine them into one.
While checking some financial sector stocks earlier today, I noticed that Capital One (COF) has taken a hellacious beating this year. Since closing at 31.05 on December 31, 2008, the stock has received a 67% haircut, down to 10.13. Capital One is the nation's largest purveyor of individual credit cards, but also dabbles in making new car loans, home equity loans and other, similarly risky endeavors.
The company is notably the subprime credit lender of nearly last resort to consumers who have tapped out their home equity and are now piling up credit card debt, typically at rates of 15% and higher, and now it appears that many are not paying back their lender, as Forbes reports:
Apparently, when it comes to paying their debt to Capital One, there really isn't much left in people's wallets, much to the displeasure of COF shareholders, as the company wiped out all of the year's gains in 2008 with a 4th quarter loss of $3.74 per share.
Much of Wall Street was sharing the pain with Capital One, as stocks took yet another drubbing, with the Dow falling to within a whisker of the November 20 low (7552.29), closing right at the lows of the day, 7552.60.
This sets the stage for an interesting remainder of the week, as today's close is undeniably a double bottom on the Dow. The other majors are close to their previous lows, but not quite there.
Dow 7,552.60, -297.81 (3.79%)
NASDAQ 1,470.66, -63.70 (4.15%)
S&P 500 789.17, -37.67 (4.56%)
NYSE Compos 4,939.12, -267.64 (5.14%)
The NASDAQ has another 154 points to go, the S&P would have to shed another 36 points and the NYSE Composite is still 288 above its November 20 close. Obviously, the bank and financial stocks of the Dow have weighed heavily of late.
Bank of America (BAC) crossed the $5 Rubicon again, closing at 4.90, down 67 cents. CitiGroup (C) continued down the rat hole, losing 43 cents, to 3.06. even venerable JP Morgan Chase (JPM) lost 3.04, to 21.65. Each of those company's shares were down by more than 12% on the session.
Market internals verified just how rough a day it was for US stocks. Declining issues absolutely slammed advancers, 5803-775. New lows expanded to 555, versus a paltry 18 new highs. Volume was outstanding, signaling more selling dead ahead. Only one issue of the Dow 30 closed with a gain: Wal-Mart (WMT). For more on that, see below.
NYSE Volume 1,590,783,000
NASDAQ Volume 2,395,914,000
Commodities were split down the middle. Anything consumable, from unleaded gas to pork bellies, was down, while the precious metals shot to short term highs. Crude oil for March delivery were down $2.58, to $34.93; natural gas was off 22 cents, to $4.22, and wholesale unleaded gas closed at $1.11, begging the question as to how most consumers are paying roughly $2.00 at the pump. Look for another record quarter for the oil companies.
Gold gained $25.30, to $967.50. Silver broke 39 cents higher, to $14.01. With deflation clearly the issue, one has to wonder how far the bulls will push the metals. They are, after all, investment hedges - primarily against inflation - but commodities at heart.
Investors find themselves at a critical crossroad at the open tomorrow. Considering that only the Dow has retraced its low, it should be a pretty safe bet that all indices are heading lower in the short term.
Want to know why Wal-Mart was the only Dow component to show a gain on the day? Watch the video below:
While checking some financial sector stocks earlier today, I noticed that Capital One (COF) has taken a hellacious beating this year. Since closing at 31.05 on December 31, 2008, the stock has received a 67% haircut, down to 10.13. Capital One is the nation's largest purveyor of individual credit cards, but also dabbles in making new car loans, home equity loans and other, similarly risky endeavors.
The company is notably the subprime credit lender of nearly last resort to consumers who have tapped out their home equity and are now piling up credit card debt, typically at rates of 15% and higher, and now it appears that many are not paying back their lender, as Forbes reports:
The company also reported its annual net charge-off rate a measure of credit default, for U.S. credit cards rose to 7.82% in January from 7.71% in December.
Apparently, when it comes to paying their debt to Capital One, there really isn't much left in people's wallets, much to the displeasure of COF shareholders, as the company wiped out all of the year's gains in 2008 with a 4th quarter loss of $3.74 per share.
Much of Wall Street was sharing the pain with Capital One, as stocks took yet another drubbing, with the Dow falling to within a whisker of the November 20 low (7552.29), closing right at the lows of the day, 7552.60.
This sets the stage for an interesting remainder of the week, as today's close is undeniably a double bottom on the Dow. The other majors are close to their previous lows, but not quite there.
Dow 7,552.60, -297.81 (3.79%)
NASDAQ 1,470.66, -63.70 (4.15%)
S&P 500 789.17, -37.67 (4.56%)
NYSE Compos 4,939.12, -267.64 (5.14%)
The NASDAQ has another 154 points to go, the S&P would have to shed another 36 points and the NYSE Composite is still 288 above its November 20 close. Obviously, the bank and financial stocks of the Dow have weighed heavily of late.
Bank of America (BAC) crossed the $5 Rubicon again, closing at 4.90, down 67 cents. CitiGroup (C) continued down the rat hole, losing 43 cents, to 3.06. even venerable JP Morgan Chase (JPM) lost 3.04, to 21.65. Each of those company's shares were down by more than 12% on the session.
Market internals verified just how rough a day it was for US stocks. Declining issues absolutely slammed advancers, 5803-775. New lows expanded to 555, versus a paltry 18 new highs. Volume was outstanding, signaling more selling dead ahead. Only one issue of the Dow 30 closed with a gain: Wal-Mart (WMT). For more on that, see below.
NYSE Volume 1,590,783,000
NASDAQ Volume 2,395,914,000
Commodities were split down the middle. Anything consumable, from unleaded gas to pork bellies, was down, while the precious metals shot to short term highs. Crude oil for March delivery were down $2.58, to $34.93; natural gas was off 22 cents, to $4.22, and wholesale unleaded gas closed at $1.11, begging the question as to how most consumers are paying roughly $2.00 at the pump. Look for another record quarter for the oil companies.
Gold gained $25.30, to $967.50. Silver broke 39 cents higher, to $14.01. With deflation clearly the issue, one has to wonder how far the bulls will push the metals. They are, after all, investment hedges - primarily against inflation - but commodities at heart.
Investors find themselves at a critical crossroad at the open tomorrow. Considering that only the Dow has retraced its low, it should be a pretty safe bet that all indices are heading lower in the short term.
Want to know why Wal-Mart was the only Dow component to show a gain on the day? Watch the video below:
Label:
BAC,
Bank of America,
C,
CitiGroup,
Dow,
JP Morgan Chase,
JPM,
New lows,
retest
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