Stocks Down for Sixth Straight Week; Worst Since 2002

Whatever happened to the recovery? All of a sudden, nobody on Wall Street or in Washington is talking about "green shoots", improvement, growth or any of the associated nonsense that went along with the previous two years' worth of stimulus, easy Fed policy, bailouts and handouts.

But who's counting, anyway? Stocks fell for the sixth straight week, and, due to a sudden turnaround at 2:00 pm in the financial sector, the day's losses could have - and should have - been a whole lot worse. By now, the only people who don't know that we're in the throes of pure economic upheaval in its most base form - that of currency destruction - are the President (who took off early today, heading for a weekend at Camp David) and Larry Kudlow, who said last night on his CNBC show, The Kudlow Report, that he thought the "correction had run its course."

Naturally, both Larry and Mr. Obama are clueless, or hiding behind the facade of officialdom, because what's weighing most on stocks these days is the total distaste and/or disregard for all manner of equities by the general public. It should be apparent that most Americans either don't have the money to invest in stocks or have, and not liking the results, are completely out of the paper market and turning to cash, gold, silver, art, collectibles, or other commodities.

Nobody likes Wall Street's paper except Wall Street, and that's a fact well-known to anybody who's been following these things for more than the past couple of months. Wall Street paper is made up by Wall Street, distributed among themselves, and bought, sold, sliced and diced as many ways as humanly (or by computer) possible... until... there's nobody else to take the paper, and that's the condition we have today.

What other reason could there be for such a massive sell-off on such paltry, absolutely slush-fund-looking volume? The churn upwards has reversed course and the majors are now going to eat each other in a massive orgy of short-selling all the way to the bottom, wherever that might be.

In months ahead, look for blown up hedge funds, even more absurdly-underfunded pension funds and the near complete collapse of Wall Street's most-favored institutions. Some contend that the great unwind has already commenced, begun in earnest in 2007, completed in 2008 and the Spring of 2009. All that's occurred since has been a perverse show with no underlying value.

Whatever the case, stocks are no place to park money right now, and probably won't be for another few years, as the masters of the universe scramble to hold onto what little is left of the markets and the US economy.

A couple of side notes to benefit those who didn't see the carnage:

From Barron's Blog: "Financial stocks were falling in early trading, but shot up around 2 p.m. after CNBC reported that capital requirements for big banks will likely be less onerous than the market had been expecting."

That's just what we need, more leverage and easier capital requirements for the world's biggest banks. My, oh, my, what great leverage you have. Might as well make it 1000-1 and blow everything up.

Zero Hedge reports: Fed releases final POMO schedule of $60 billion.

Well, let's see how stocks fare without free money. Anybody not dreading July - the end of the Fed's slimy handouts to the banks - is living in a dream world, which would include 90% of the global population.

So, down we go. BTW: there have been other declines of six straight weeks, but the last one was in 2002. See you on the other side, if there is another side to this horrible story.

Dow 11,951.91, -172.45 (1.42%)
NASDAQ 2,643.73, -41.14 (1.53%)
S&P 500 1,270.98, -18.02 (1.40%)
NYSE Composite 8,016.39, -133.26 (1.64%)

As expected, declining issues buried advancing ones, 4462-1202. Our favorite indicator showed even more trouble ahead. New highs on the NASDAQ were subsumed by new lows, 24-163. On the NYSE, there were only 20 new highs and 95 new lows, which makes the combined total the worst since the lows overtook the highs, six sessions ago, 44-258. If history is any guide - and it's usually a good one - this indicator will not turn over for at least six months, probably longer. Once either the new highs or new lows take an edge, it's generally for an extended period. For instance, new highs held sway over new lows on a daily basis for nearly two years before this most recent change.

Volume was again pathetic. Calling it light would be quite the understatement.

NASDAQ Volume 1,978,513,625
NYSE Volume 3,972,811,750

In today's great downdraft, commodities didn't fare any better, WTI crude futures on the NYMEX tumbled $2.64, to $99.29. Gold was taken down $12.20, to $1532.10, if only because of fund managers scrambling to meet margin calls. Silver took the worst of the action, falling $1.37, to $36.20 per ounce.

Putting the recent slide into perspective, since April 29, the Dow Jones Industrial Average has fallen by 858 points, still closing in on official correction territory, soon to become bear market territory. The Dow is less than 400 points from falling into negative territory for the year. The NASDAQ is already sporting a decline for all of 2011, closing today about nine points lower than where it ended 2010. It's lost 200 points since the market top, April 29.

As for the S&P, it's 93 points down over the past six weeks and is up a mere 13 points for the entire year. Time wasted, indeed. Does anyone now think that bailing out the too-big-to-fail banks was a good idea? Had the government done what was proper - that being nothing - and allowed the banks to go under and reorganize in other mysterious forms, the global economy would most likely be booming right now. Instead, we have a global catastrophe completely of their own making which is falling down upon their heads.

A pox on all their houses. Kick a banker to the curb today. They've been doing it to us since 1913.

Despite Poor Housing Data, Philly Fed Big Miss, Stocks Rock On

Following yesterday's exercise in exposing how Wall Street makes money at the expense of almost everyone else, confirmation today as stocks gained despite continued horrible data from the housing sector and a huge miss in the Philadelphia Fed's latest report on economic conditions in the region.

According to the NAR, existing home sales for the month of April dipped 0.8% nationally to a seasonally adjusted annual rate of 5.05 million.

Chief economist, Lawrence Yun said:

“Given the great affordability conditions, job creation and pent-up demand, home sales should be stronger...”

Naturally, Mr. Yun, an economist, hasn't set foot outside his office for some time and hasn't taken into account the facts that banks aren't lending, jobs are scarce and those who do have regular jobs haven't received a raise in a while, all along dealing with higher energy and food prices.

Median price for a single-family home fell 5.4% year-over-year, to $163,200. Total housing inventory at the end of April increased 9.9 percent to 3.87 million existing homes available for sale, and the NAR feels this is amount is a 9-month supply. Their figures are probably not inclusive of the two to four million homes in the so-called "shadow inventory" which includes houses in foreclosure, off the market and in the hands of the banks (REO) and other distressed properties.

That, my friends, was the good news.

The report from the Philadelphia Fed was a little more alarming, where its business activity index slumped to 3.9 from 18.5 in April. Ah, yes, that recovering economy just continues to click along in places like the Northeast business section of the country.

Stocks actually lost ground for a few moments after these two sets of data reached Wall Street at 10:00 am EDT, but then the computers running the trading floor were reminded that tomorrow is stock option expiration and their human masters would be in need of more money for hookers and cocaine, so back up they went, on volume so thin Charlie Sheen was brought in to cut it.

That was, except for the darling IPO of the day, LinkedIn (LNKD), the business/social website that was priced at $45/share, but opened at $85 and traded as high as 122 before setting for the day at 94.25. That price places the company's market cap at around $10 billion, which is more than 65% of the companies listed on the S&P 500. The trading frenzy over what amounts to a web-based rolodex brought back memories of the 1999 tech bobble. Some traders actually shed tears of nostalgia.

Dow 12,605.32, +45.14 (0.36%)
NASDAQ 2,823.31, +8.31 (0.30%)
S&P 500 1,343.60, +2.92 (0.22%)
NYSE Composite 8,427.95, +20.47 (0.24%)

Advancing issues held sway over decliners, 3603-2911. On the NASDAQ, 81 new highs and 38 new lows, while the NYSE showed 179 new highs and a mere 17 new lows. Volume was slight, though the A/D line hints that there was a smattering of caution, likely concerning the forward-looking trends set by the Philly Fed and housing data, to say nothing of the impending end of QE2, which accepted 1.9 billion in outright coupon purchases today. Ted Fed has released the schedule through June 9. Some time after that, the operation is supposed to end, though few doubt that the easy money will come to a complete halt.

NASDAQ Volume 1,739,600,875
NYSE Volume 3,625,738,000

The price of oil eased, down $1.66, to $98.44 per barrel of WTI. Gold traded down $2.30, to $1494.60. Silver was off seven cents, at $34.95 per troy ounce.

With options expiring tomorrow and the Fed dealing another $5-6 billion in POMO, unless nuclear war breaks out somewhere - and even if it does - stocks should show more gains, at least in the morning.

Market Up on Goldman Beat, POMO Momo

Remember that little bit about S&P downgrading their US outlook to negative?

Oh, that was so yesterday!

Tim Geithner, the US Secretary of the Treasury, went on CNBC to convince (or try to) th public that all is well, S&P doesn't know jack and the future will be bright.

Just before that Goldman Sachs announced their 1st quarter results, beat the street and it was off to the races at 9:30 am when the bell rang.

Well, not quite. Stocks really didn't start moving higher until a little after noon. As usual, there was no reason, and no volume, so it didn't really matter that Goldman Sachs was selling off.

The Fed came in with a $6 billion POMO to invest, so away went the market. Up, up and away. Forget about those ratings agencies. What do they know?

Dow 12,266.75, +65.16 (0.53%)
NASDAQ 2,744.97, +9.59 (0.35%)
S&P 500 1,312.62, +7.48 (0.57%)
NYSE Composite 8,332.03, +54.92 (0.66%)

Winners beat losers, 3977-2526, NASDAQ new highs were 66, new lows, 32. On the NYSE, there were 58 new highs; 25 new lows. Volume? No. Dismal, horrible, Wall Street's dirty little secret.

NASDAQ Volume 1,723,697,750
NYSE Volume 4,228,962,500

WTI crude futures were up another $1.03, to $108.15. The corresponding rise in retail gas prices from $100+ per barrel oil is almost certain to derail any kind of growth for the second quarter.

Gold briefly topped $1500 for the first time ever, but pulled back from that and closed $2.10 higher, at $1,495.10. Silver (thank God you own some) continued to soar, up another 97 cents, to $43.91. Again, gold set another all-time high, silver a 31-year high, and is rapidly approaching the all-time high of $50, which it will surpass, almost for certain, within the next three months time.

It was a Tuesday. Nothing much happened in the larger scheme of things. Next Thursday, we'll see some fireworks when the government announces its first estimate of first quarter GDP, which, if you've been paying attention, was supposed to be 4%, then 3.5%, but has recently been revised down to 2%. It will likely come in below even that.

Tomorrow, existing home sales data for March, another reminder that a house is not an investment, it is a place to live, at 10:00 am EDT.

Stocks Take Another Hit, But, Why?

Major US indices fell for a fourth consecutive session - with the exception of the Dow, which eked out a 1-point gain on Monday - and there are likely several reasons why this downtrend has continued and actually accelerated, with the biggest drop coming today.

After all, it is the beginning of earnings season, and first quarter results are expected to be pretty good. But is the market looking down the road, or could investors be wary of margin squeezes caused by runaway commodity prices, or consumer depression caused by over-the-top gas prices?

One thing's for sure: the winter was a long and cold one, and nobody got a break from high heating bills in a majority of the heating states of the Northeast and Midwest. That certainly couldn't have helped household budgets much and a Gallup poll released today suggests that Americans are as displeased with current and future conditions as they were this time in 2009 and through the middle of 2010.

The poll showed that only 33% of respondents in March think the economy is "getting better." That's a drop from 36% in February and 41% in January.

Another possibility is that the now-month-old tragedy in Japan is also worsening, as officials raised the level of the Fukushima Daiichi nuclear plant accident to 7, on a par with the disaster at Chernobyl, 25 years ago.

Perhaps the stock market wasn't really sold on the late-night budget deal reached on Friday night (We had expected this was only a continuing resolution and were right) and the potential that the deal could fall apart. Details are just beginning to trickle out that the cuts amount to much less than the $38.5 billion reported and that members of both parties, in bouth houses of congress, are displeased.

At Business Insider, Joe Weisenthal reports that the government might still shut down, this Friday. The AP has details from just where the phantom cuts are coming.

So, here we go again? The 2011 fiscal year ends September 30 (about 5 1/2 months from now), and the budget is still being trimmed, debated and flayed? This is no way to run a country, especially one as on the financial ropes as the USA. Get ready for more drama from the queens on Capitol Hill and at the White House.

The Hill has more detail on the cuts, which will go to a House floor vote on Thursday. The legislation is known as H.R. 1473, for those wishing to keep score at home.

Notwithstanding the aforementioned possibilities and potentialities, the Fed's ending of thier policy of handing over free money to Primary Dealers in June, via QE2, might be on the minds of many in the investment world. When that nearly $100 billion a month stops, so might Wall Street's 2-year-long party. In a related note, the Fed released it's schedule of banker handouts (POMO) for the remainder of April through May 12.

All of this news added up to some big drops in the equity markets, centered around just about 1% overall. Commodities were hit even harder (see below).

Dow 12,263.58, -117.53 (0.95%)
NASDAQ 2,744.79, -26.72 (0.96%)
S&P 500 1,314.16, -10.30 (0.78%)
NYSE Composite 8,360.46, -85.31 (1.01%)

Declining issues clobbered advancers again, 4883-1663, a nearly 3:1 ratio, the largest of the past four sessions. On the NASDAQ, new lows overtook new highs, 56-39, but it was the other way around on the stubborn NYSE, with new highs holding a slim edge over new lows, 41-20. A similar pattern was witnessed in March, with the new lows overtaking new highs on both indices for 4-6 days, but the supposed correction was cut short by a surprise rally that now seems to have run up against resistance and is failing fast. Volume was not spectacular, and would most accurately be described as moribund. Another few days of this, and another row over continuing funding to the federal government could put the kibosh on 2011 gains, short and long term.

NASDAQ Volume 1,798,176,500
NYSE Volume 4,735,433,500

Oil took another massive hit in price on Tuesday, with WTI crude futures falling $3.67, to $106.25, and even lower after NYMEX trading closed. That's a two-day drop of $6.52 per barrel and motorists can only hope the trend continues. There are a lot of speculators in the market, and estimates range from them making up anywhere from 10-40% of the oil price.

Of course, in a real world, with real world consequences coming from an actually-functioning Justice Department, that would otherwise be known as price-fixing. Since the Attorney General hasn't been seen in six or eight months, and is generally regarded as the worst ever, don't expect anything like even an investigation to commence any time soon. We hear the name of the AG is Eric Holder, but nobody's been able to confirm that.

Along with oil, a good number of food and grain commodities are coming off their highs. Corn, soybeans and wheat were down the most, with lean hogs and live cattle following the trend. Gold slipped $14.50, to $1,453.60. Silver fell 55 cents, to settle in at $40.07 per ounce.

It has been said that one day does not make a trend, and there's truth in that, but maybe four straight declines in major indices are significant enough for somebody to take notice. It's no secret that the US system is largely bankrupt and operating on fumes and smoke, so it might be just a matter of time for the markets to correct. Naturally, the meddling Fed has kept the rally going with oodles of cash, and just to be sure, they gave some to the wives of some already-rich bankers, as Matt Taibbi reports for Rolling Stone.

Fair warning: reading Taibbi's latest story might lead to vomiting or breaking of inanimate objects. Strap in securely, as this story reveals just how corrupt and unbalanced the entire bailout process has been and continues to be.

Paging Ron Paul, paging Ron Paul. The country is calling on you to run for president.

Stocks Move Forward on POMO of $7.8 Billion

Like it or not, the Federal Reserve continues to pump fresh money into the hands of the Primary Dealers, keeping the markets propped up in a thoroughly unconventional manner. Monday's POMO of $7.79 billion Outright Coupon Purchase, was followed again today by a slightly larger Outright Coupon Purchase POMO of $7.802 billion.

While the Fed and the PDs do their thing t make America great (or line their own pockets with taxpayer dollars, as the case may be), stocks have just kind of languished around, levitating today just above the flat line.

Dow 11,671.88, +34.43 (0.30%)
NASDAQ 2,716.83, +9.03 (0.33%)
S&P 500 1,274.48, +4.73 (0.37%)
NYSE Composite 8,018.68, +52.59 (0.66%)
NASDAQ Volume 1,907,460,750
NYSE Volume 4,489,686,000

Meanwhile, New York City braces for another wicked snowstorm, scheduled to hit the city and other large metro areas overnight. Should the Big Apple receive another foot of snow that they're unable to deal with, the stock market - for the reason that traders may not be able to make it to lower Manhattan and the lack of a Wednesday POMO - might experience a little bit of a time out and stocks may drift lower.

They should drift lower no matter what happens, as the indices are nearing a five-month rally without a break, also unusual, but not in this environment.

Advancing issues dominated decliners, 4016-2457, volume was light and there were 226 new highs on the NASDAQ, to just 12 new lows. On the NYSE, the numbers were 237-8, in favor of new highs.

Oil caught another big bid today, gaining $1.86, to $91.11 on the front-end NYMEX contract. Gold rolled up a gain of $10.20, to $1,384.30, while silver rocketed 64 cents higher, to $29.50. Outside of the commodities space, there simply wasn't much action, as has been the case for most of the past six weeks, though with earnings starting to trickle out - Alcoa (AA) started out with an .02 beat of Street estimates yesterday after the bell - that should provide some excitement, though computers - those machines actually executing 70-80% of all trades - are notoriously unemotional.

Some day, something may change. In the meantime, it's not how one reacts to news and events, but how well prepared one is for all contingencies.

Ireland and FBI Hedge Fund Raid Don't Dent POMO-Driven Market

According to the World Bank, the population of Ireland (circa. 2008) is 4,425,675. On Sunday, ministers from the ECB, EC, IMF and the Irish government announced a bailout plan for the nation worth roughly $110 billion, or, $24,853.00 for each and every citizen on the island nation.

Naturally, the citizenry won't be getting any of the money. That's going to the banks. The public will be saddled with the debt, an amount so monstrous that one would wisely assume that it will never be repaid. The reason: the banks. Why would it be any other entity running up amazing mountains of debt. Earlier this year, the Irish government bailed out the banks to the tune of about $60 billion, but apparently, that wasn't quite enough, and now the government itself is threatened, by the populace on one side and the IMF and European Union on the other.

Some members of the government are already saying that they won't vote in favor of the package, and are calling for new elections in January. Protests sprung up on Monday, though they were small, organized by Sinn Fein, the political arm of the IRA.

Essentially, Ireland is the second in line - after Greece - for where most of Southern Europe is going: begging to the other members of the EU and the IMF for more money to keep their bankrupt economies going. Portugal is widely believed to be next, then Spain and Italy. These nations, should they accept the same or similar terms as the Irish, will be indentured to global banking interests until they default on the loans or rise up and through out the bankers and overthrow their governments. Either way, the populace will be the worse off for it, as tax hikes are certain on the one hand, and desperation and poverty in an every man for himself environment on the other.

There are those, and their numbers are growing, who believe that it's time for the people to take back their nations, though nobody is particularly keen on the idea of any brutal government crackdown that would surely come in response to a popular uprising.

Thus, the question on the minds of many Europeans tonight is: Would you rather pay taxes and just work your life away, saving nothing, to preserve the present order, or take the chance that things might be better after a bloody coup, a period of anarchy and a reformed Europe that isn't under the thumb of the banking and government oligarchy?

Good question. Only the future holds the answer. Ireland is giving us clues, though, thus far, most prefer the status quo, no violence and payment of tribute without end to governments which have proven to be at least incompetent and at worst, corrupt to the core.

Here in America, the condition is not nearly so dire, but it's close. Our $14 trillion debt is not going away any time soon, our government seems to stumble from one crisis to the next, never fixing anything, while the banks keep hiding their losses off their balance sheets through eased accounting rules and the help of the Federal Reserve.

Today's POMO (money for Wall Street) was a paltry $8.3 billion. More is scheduled for tomorrow, then after a break for Wednesday and Thursday, the injections of cash will continue without respite every business day through December 9. It's how we here in America have now confronted our massive, non-payable debt. We print more money.

The other major story today involved FBI raids on three hedge funds suspected of insider trading. That sent stocks - already down on the rising dollar and Irish blarney - to their lowest levels of the day, the Dow down by nearly 150 points just before 1:00 pm. But - and there's always a "but" these days - with all that POMO money sloshing around, this decline, like all others before it, was viewed as a buying opportunity by the Primary Dealers, flush with cash and stocks rallied for the remainder of the session, closing with marginal losses on the major exchanges, the NASDAQ actually sporting a solid advance.

Dow 11,178.58, -24.97 (0.22%)
NASDAQ 2,532.02, +13.90 (0.55%)
S&P 500 1,197.84, -1.89 (0.16%)
NYSE Composite 7,610.30, -30.78 (0.40%)

Advancers narrowly defeated decliners, 3249-3198. There were 368 new highs and just 68 new lows. Volume, the broken record, was laughably low.

NASDAQ Volume 1,865,878,625
NYSE Volume 4,305,755,500

Oil finished the day down just 24 cents, at $81.74, though it was off more than a dollar earlier in the day. Gold was lower earlier, but rallied to $1366.60, a gain of $12.50. Silver also showed upside, gaining 52 cents, to $27.87.

POMO + QE2 = Stocks to the Moon, Silver Soaring

One of the side effects of Ben Bernanke's $800 billion gambit - and there are many - is to send stocks directly upward, while also giving silver and gold somewhat of a boost.

A day after the announcement of $600 billion in QE2, plus another $150-200 billion more in re-allocated MBS, the Fed hit the trifecta with a 4$.5 billion POMO today and sent stocks to the their best levels since the crash of 2008.

Yes, siree! We're back on easy street thanks to Uncle Benji debasing the currency. Now all you people worried about your pension funds and 401Ks can rest easy, Uncle Ben's got ya covered.

Another side affect of QE is runaway inflation, but let's not talk about that now. Let's talk about that when gas is $4.25 a gallon, because that's where this is evidently headed. And word has it that if this round of stimulus via magic money creation isn't enough, don't worry, Ben can just conjure up some more. Isn't capitalism nice, easy, fun?

Oh, and you people who have saved diligently and are now in fixed income securities, bonds, and money markets, well, you're screwed. You'll still have money; it just won't be worth much, and, as an added bonus, it will buy even less in years ahead. Happy Retirement!

To the uninitiated, typical, dumb-ass American, they'll just see that the Dow was up AGAIN! and their stocks are doing well, so all is good in America. We've got a whole slew of newly-minted Republicans in the House of Representatives all set to slash taxes (for corporations), cut spending (on social programs) and usher in a new era of prosperity for the good old USA.

The problem with this scenario is that it's just all bunk. We're headed down the path of the Weimar Republic or, more recently, Zimbabwe, places where inflation was so out of control that restaurants asked patrons to pay in advance because by the time they'd finish their meal, it would cost more. The currency became essentially worthless in a matter of days and weeks.

Don't worry, though, we're just getting started. The fun part of hyper-inflation won't come until the dollar index hits something like 45. It's still above 75, or at least it was this afternoon. That could have changed.

Dow 11,434.84, +219.71 (1.96%)
NASDAQ 2,577.34, +37.07 (1.46%)
S&P 500 1,221.06, +23.10 (1.93%)
NYSE Composite 7,782.43, +174.02 (2.29%)

Gainers decimated losers on the day, 5265-1295. The new highs, new lows numbers were simply amazing: 1343 new highs; perhaps more amazing were the 112 new lows. From where did those come?

Volume was exceptional, for once, though considering that the Fed has only begun to pump nearly a trillion dollars into the stock market, we could see volume spikes which dwarf this in weeks and months to come. Today was a day to just pick some stocks you like and throw a bunch of money at them. They're almost guaranteed to go up. Even Bank of America (BAC) was up nearly 5%, despite the news that they may be on the hook for over $120 Billion in mortgage put-backs. In other words, the bank will be munching on those loans for years to come and, in fact, their exposure is probably more on the order of double or triple that.

NASDAQ Volume 2,533,570,750.00
NYSE Volume 6,609,444,500

The good news is that gold and silver went off like rockets today as well, because the really smart money (which gold and silver are) is into this space in expectation of enormous inflation and destruction of the dollar and other currencies. Gold was up $44.10, hitting a new all-time record high of $1392.90. Silver, in percentage terms, did even better, gaining $1.53, to $26.37, as JP Morgan and HSBC face criminal and class action lawsuits related to shorting and manipulating the silver market. Ouchie for them; great for anyone who loves silver.

It's a wild world out there; every man, woman and child for themselves.

Just a note in the wind. Keep an eye on House of Representative member Ron Paul, and his newly-elected Senator son, Rand. I'm promoting a Paul-Paul ticket for president and VP in 2012. A father-son team in the White House. Looks like a natural to me.

Oh, and never mind that unemployment claims were up 20,000 this week, to 457,000. That number will grow ever larger, likely to surpass 500,000 in December or by late January at the latest, while the stock market soars. Hey, who needs employees when you've got the Fed's printing presses on your side.

Tomorrow's non-farm payroll report for October should be a non-event, as will most fabricated economic data from now on. with money creation out the wazoo, there's no sense in measuring anything except the thickness of your bankroll.

Yippie! We're all going to be rich!

Thank Heavens the Elections Are Almost Over

Tomorrow, millions of Americans will go to the polls to elect another batch of worthless hooligans, crooks, thieves of all variety and generally people who can't do anything else but steal and spend other people's wealth.

The American system of representative democracy is so completely and irrevocably broken that there's little hope of it ever being repaired. People who are "elected" (make that "selected" by those in control of voting machines that don't produce a paper trail and are easily hacked) are supposed to represent the people of their district, city, town or state.

Sadly - and this has been an ongoing feature for quite some time - both newly-minted and re-elected representatives will be representing not the people, but the interests of the people who gave to their campaigns, mostly corporations or rich donors seeking special treatment. And they will get it, no matter the detriment to the public.

Anyone who cannot see that this is the operative nature of our politics is either not paying very close attention or is blinder than blind.

Essentially, the "big" races are those for control of the House of Representative and the US Senate. The Republican party, largely responsible for the fiscal calamity that is the US government and economy, is already claiming victory in the House, on the uncertain claim that they will restore "American values." It's the same old line that seems to be trotted out every couple of years, by both parties, both equally corrupt and useless.

Any change that occurs will no doubt be to the detriment of the majority of Americans, especially those known as middle class, now an endangered species.

Thank heavens this election cycle is finally coming to an end. Maybe the American public will have peace for a few weeks, or even days. We'd be better off if all the politicians just went home and stopped making so much noise.

In an apparent vote of no-confidence in anything, the markets today staged an incredible about-face on the back of a $2.5 billion POMO, otherwise known as quiet QE by the Fed. Stocks soared in the early going. Just after 10:00 am, the Dow was up almost 125 points, but spent the remainder of the session declining, actually going red for a short time, before a late-day rally boosted it back to break-even.

The S&P also ended marginally in the money, though the NYSE and NASDAQ weren't quite so fortunate. For those of the ilk that the Republicans will deliver peace, prosperity and zillions of new jobs, today's action was hardly reassuring. The market knows the economy stinks and congress will do little to change that. We are in the midst of a depression, one which neither party is willing to take blame for, though the truth is that both caused it.

Dow 11,124.62, +6.13 (0.06%)
NASDAQ 2,504.84, -2.57 (0.10%)
S&P 500 1,184.38, +1.12 (0.09%)
NYSE Composite 7,509.21, -4.14 (0.06%)
NASDAQ Volume 1,922,047,000.00
NYSE Volume 4,461,449,000

Oddly enough, declining issues far outweighed advancers, mostly on the NASDAQ, 3521-2915. New highs stretched to 540, against a mere 80 new lows. Volume was normal, meaning poor.

Crude oil was up $1.52, to $82.95. Gold fell $7.00, to close at $1,350.60. Silver lost a penny, finishing at $24.55.

Two things are for certain: 1. The USA is in a heap of trouble economically, and 2. looking to congress for answers is a huge mistake.

Is it too late to just cancel the elections and start over?

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:

POMO Commences; Currency Wars Underway

Get used to hearing and seeing the acronym "POMO" because it will become a substantial part of the financial lexicon over the coming years. In some circles it is already standard parlance.

POMO stands for Permanent Open Market Operations and is a tool used by the Federal Reserve to supply liquidity (cash) to markets. The Fed announces these POMOs in advance, so nobody is surprised by them, though the general public has little to no idea of their existence. On Wall Street, however, they are greeted like manna from heaven, because, in a way, that's what they are.

Technically, the Fed sells Treasuries to Primary Dealers (PDs), such as Goldman Sachs, morgan Stanley and all the rest of the Too Big to Fail (TBTF) crowd, then buys them back via the POMOs to replenish the brokerages with fresh infusions of cash. These primary dealers then do what every red-blooded crooked bankster does with free money - they invest it in stocks. It's all very tidy and well-organized and though there's no explicit instruction from the Fed that the PDs should or must buy stocks, it's pretty much an implied contract.

So, just in case you're wondering why stocks begin to nose-dive - like today, down more than 80 points on the Dow at 10:00 am - and then suddenly recover and turn positive, it's thanks to the Fed and the Primary Dealers and the POMO. It's all one big happy family down there in lower Manhattan, keeping the indices moving ever higher, no matter the real conditions in the economy.

On top of the Fed and the banksters keeping the world safe from true price discovery (rigging the markets), there's more going on out there in the wild world of high finance that most people don't know about nor understand at all, especially in the FOREX markets where dollars are exchanged for Yen, Euros for Francs and all manner of currency changes hands constantly.

The latest craze among Central Bankers - those devious minions of high muckety-mucks, like our own dear Federal Reserve - is called "race to the bottom," in which each nation tries to see who can devalue its own currency faster than the other guys. The reasoning is that a cheap currency will cause exports from that country to sell more quickly, thus boosting profits for the most-favored corporations.

If it all sounds very socialistic, maybe even fascist and totalitarian, that's because, as a policy, it is. Nothing causes countries to become extinct better than debasement of the currency, but, since the central bankers don't want to disturb the TBTF private banks with real accounting standards and true remedies to bad loans, bad trades, bad debts (the reason the global financial system nearly fell apart in 2008 and also why no banks went bankrupt), the race to the bottom strategy is most favored these days.

Over the past couple of weeks, the Japanese have tried their hand at it to little avail, but also Switzerland, South Korea, Brazil and even Peru have been out selling their own currencies and snatching up others in planned attempts to cheapen their own money. Strangely enough, this kind of monetary protectionism is the same kind of thing that exacerbated, broadened and lengthened the Great Depression, although back then it was mostly done by slapping tariffs on foreign goods. Today's method is so much cleaner, simpler and effective. At least that's what the brainiacs at the Fed and other central banks would like you to believe.

The problem with racing to the bottom is that when everybody does it, the net effect is bad for everyone, but mostly the working or middle class of the participating nations because the workers get paid in dollars or yen or yuan or euros that were worth more yesterday than today, and the process continues until somebody eventually defaults, bringing that nation to quicker ruin than the other players.

Rest assured, even though America likes to be first in everything, this is one game we're probably not going to win, though our Fed Chairman, Ben Bernanke, is trying as hard as he can, announcing that the Fed will just print up an additional $100 billion per month in order to assure that the US dollar will be wanted by nobody. So far, we're winning, but the Eurozone nations and the Japanese will probably beat us down the abyss of financial ruin and become the first to create some other exchange, like barter or shells or whatever they think people will readily use.

The entire concept of currency debasement is not new. It has been around for years. It's just that now, with economic stress manifold, it's become popular. These central bankers know that time is not on their side. They realize that the days of floating currencies are coming to an end and that eventually some kind of asset-backed currency will have to replace the fiat (paper) money, and that asset is likely to be gold, silver, oil or a combination of all of them.

In the meantime, stocks will be moving at the whims of the primary dealers and not along the lines of fundamental valuations. It's almost a certainty that stock markets will rally and crash, making boom and bust the normal cycle rather than something to be avoided. In fact, we're already there. The 2008-2009 crash was just the first taste. There are many more crashes and mini-rallies to come. That's how the PDs make their money after all, trading, and being on the right side of more trades than the other guy.

Because of all this manipulation, my job just got easier. Now, all I have to do is announce the size of the POMO, when it's going to be completed and report how high stocks rose. Simple, easy and clean. Unfortunately, not a real market and nowhere for individual investors to play. Here's a hint: buy gold and silver from a dealer and take physical delivery. It's just about the only way to protect yourself from the currency manipulators who would steal all your wealth.

Dow 10,858.14, +46.10 (0.43%)
NASDAQ 2,379.59, +9.82 (0.41%)
S&P 500 1,147.70, +5.54 (0.49%)
NYSE Composite 7,310.32, +46.95 (0.65%)
NASDAQ Volume 2,140,495,250
NYSE Volume 4,189,045,750

Advancing issues pounded decliners, 3956-1766. New highs: 397; new lows: 35. Volume was in the toilet. Apparently the computers didn't find the POMO all that interesting.

November crude fell 34 cents, to $76.18. Gold made another new high, up $9.90, to $1,306.60. Silver reached another 30-year high, gaining 23 cents, to $21.69. Don't think the precious metals traders are going to take a break here. As long as the developed nations of the world insist on devaluing their currencies, gold and silver will price higher. They are, after all, not only the most-trusted store of value, they're going to be used as money again, real soon.