Stocks Finally Post Gains After 7-8 Days of Losses

Sooner or later there was going to be some kind of rally and today was it, even though it wasn't anything to write home about.

After the Dow had been down for eight straight sessions and the S&P down seven in a row, the early morning trade looked to be more of the same with the major indices dropping to session lows around 10:45 am EDT. The Dow was down more than 160 points, officially touching down at 11,700, when the turnaround began. The S&P was sporting losses of nearly 20 points before heading higher and closing at the highs of the day.

It's not as though anything had changed at all. Italy is on the brink of default, following in the footsteps of neighboring EU nations, Ireland, Portugal and Greece. European-based banks are supposedly frozen with terror having exceeded all prudent boundaries for lending to highly-indebted nations.

And, here in the US, no change will come to the current jobs or housing situation as the congress has already embarked on a month-long vacation, after, of course, taking a few victory laps for their last-minute daring-do on raising the debt ceiling and putting forth a measure that cuts somewhere between $20 and $25 billion from the budget in 2012, less than 1/10th of one per cent of the entire budget, or, quite literally, a drop in the budget bucket.

The only thing moving stocks today - besides the obvious influence of the PPT - was the extremely oversold condition of the markets. The Dow is down 828 points since just July 21, exactly 10 trading sessions. There's a very realistic chance that this was only a knee-jerk reaction rally, based entirely upon the notion that stocks are cheap relative to where they were trading two weeks ago.

Dow 11,896.44, -29.82 (0.25%)
NASDAQ 2,693.07, -23.83 (0.89%)
S&P 500 1,260.34, -6.29 (0.50%)
NYSE Composite 7,853.20, -21.22 (0.27%)

Advancing issues finally took the edge over losers, 3737-2897. The NASDAQ posted 28 new highs, against 204 new lows, while the NYSE had just 14 new highs and 275 new lows, blowing the combined total up to 42 new highs and 479 new lows. This high gap indicates that stocks are on the verge of a severe, long-term breakdown, despite today's small gains. Volume was strong, but the buying seemed to be out of desperation and directed at short-term profit rather than long-term investment.

NASDAQ Volume 2,637,190,000
NYSE Volume 6,487,507,000

Two pieces of jobs-related data showed that the jobs market is still in quite the dodgy condition. The firm of Challenger, Gray and Christmas released their monthly survey of planned layoffs, which showed employers announcing 66,414 planned job cuts in July, up 60.3 percent from 41,432 in June. Meanwhile, the ADP monthly private payroll survey surged to 114,000 added jobs in July, a positive sign for Friday's non-farm payroll numbers from the BLS.

Commodities continued along their bifurcated path, with oil down $1.86, to $91.93, while gold surged to another record at $1,666.30, up a whopping $21.80 on the day. Silver rose $1.67, a gain of more than 4%, to $41.76, the highest close since May.

All of this sets up for an exciting end to the week. Thursday's initial unemployment claims will show the way on Thursday, while the non-farm payroll report - expected to show a gain of 100,000 jobs for July - should set the tone on Friday.

Dismal, Huge Miss on Payrolls; Market Response: So What?

Normally, a NFP (non-farm payroll report like the one released today would have sent investors fleeing for a place to hide and stocks into a free-fall, but, since the people who manage YOUR money could care less if any American has a job or whether or not America even survives as a country, the response from market participants was a wide-open yawn.

Following Thursday's overly-rosy ADP private payroll report (+157,000 on expectations of +70,000), the BLS could produce a report showing only 18,000 net new jobs created in the month of June. Expectations ranged from as high as 125,000 (Mark Zandi) or (175,000) Joe Lavorgna to a low of 88,000 (Rick Santelli), though both proved to be too high by orders of magnitude.

On top of the already dismal-sounding report for the current month, the numbers for April and May were also revised lower, by a total of 44,000 more jobs that were not created. Adding to the catastrophe were the lower readings on hourly earnings, which fell 0.01, and average workweek, which dropped from an already low 34.4 to 34.3. So, not only are there not enough new jobs being created to even keep pace with nominal growth in the labor force, the jobs people do have are barely able to provide sustenance and are getting worse.

The immediate response was for the Dow futures to reverse, from +35 to -123 in a matter of minutes. The 10-year note fell from 3.18 to 3.05 in a flash. However, the pre-market shock and awe were the worst the market would feel from one of the worst post-crash jobs reports ever, and incidentally, the second in a row.

Markets opened lower, but not dreadfully, and as the day wore on the Dow sank by as much as 150 points but recovered over the course of the afternoon to close down a mere 62 points. This, after a two-week run-up of over 900 points on the Dow and similar percentage gains on the other major indices.

It should come as no surprise that Wall Street is a crooked place run entirely by deceitful individuals whose only purpose is to pad their wallets. This shameful example of market manipulation ought to serve as a wake-up call to those not already fully aware that when anyone in Washington talks about a "recovery", they mean it only for bankers, their clients and the corporations listed on the exchanges and not the average working man or woman.

Simply put, Wall Street and the US economy are a complete farce.

Dow 12,657.20, -62.29 (0.49%)
NASDAQ 2,859.81, -12.85 (0.45%)
S&P 500 1,343.80, -9.42 (0.70%)
NYSE Composite 8,410.19, -65.94 (0.78%)

Declining issues did lead advancers, 4520-1998, though on the NASDAQ there were 62 new highs and only 22 new lows. There were 57 new highs and 15 new lows on the NYSE, which puts the combined total at 119 new highs and 37 new lows, a far cry from the overly positive figures just yesterday. Volume was absolutely destitute, close to being the worst of the week, in a week that was already under-traded. The volume numbers attest to the fact that there are fewer and fewer market participants every day and only those who chose to sell today after the opening minutes of trading were the real losers, though in the end, with manipulated, tightly-controlled markets, nobody ends up a winner. Monday may, in fact, turn into a real blood-bath.

NASDAQ Volume 1,576,445,500
NYSE Volume 3,554,617,250

It was a good day for automobile drivers as the price of crude oil fall sharply, down $2.67, to $96.20. It was also profitable to be in gold, as the price increased $11.00, to $1,541.60, but not so great for silver holders, as the price is again highly suppressed, gaining only a penny, to $36.54.

The lesson to be learned from today's tenor of trading is not only that numbers cannot be trusted, but those who use them can be trusted not at all.

Thank goodness it's the weekend and we can forget all the thievery, trickery and false hope for at least a few days.

ADP Surprise Sends Stocks Into Stratosphere

At 8:15 am today, it was game, set, match for the bulls, because the ADP employment report for June showed an increase of 157,000 jobs, more than double the 60-70,000 most economists were expecting. A surprise this large occurs seldom, despite the fact that economist "experts" are generally nothing more than professional guessers, so, the futures leapt forward and stocks opened the trading day strong to the upside.

Incidentally, initial unemployment claims came in at 418,000, the 13th straight week over 400,000, though the market shrugged that data off completely the moment it was released.

They stayed in positive territory for the remainder of the session, stretching the latest ramp-job bill run to eight days, though Tuesday and Wednesday of this week did see some deterioration.

With the government's non-farm payroll data due out at 8:30 am on Friday, there was little to fear into the close, as US markets put in another stellar performance. Stocks finished the day approaching the highs of the year (which are also three year highs, and in the case of the NASDAQ, nearly a four-year high), just two weeks after the gloom and doom crowd seemed to have set the tone for the rest of the year.

Now, this set-up, coming directly prior to earnings season, could be a mammoth double or triple top, but if it's not, expect the markets to go careening upwards without much resistance. Dow 13,000 is well within sight and there's nothing the Fed and the banks and the federal government would like to see more than some record-setting gains on the major indices.

Never mind that the equities game is as crooked and manipulated as they can possibly be, the idea is that the "wealth effect" will create more confidence in the average Joes and Janes, leading to more spending and a more robust economy. It actually could work, though there are doubters, especially the 15 million Americans who cannot find jobs, or the millions who have been foreclosed upon and subsequently lost their homes, or the 45 million on food stamps.

With those groups in consideration, there seems to be a massive disconnect between Wall Street and Main Street and it is precisely why a growing number of Americans have pulled out of stocks entirely and are investing in more down-to-earth investments like back-yard gardens, gold, silver and ammunition. This crowd does not trust the bailout queens of Wall Street nor the Sugar Daddies in the nation's capitol. Instead, they see a hollowed-out shell of a nation, pinning its hopes on paper pushers and overpriced, over-hyped securities that derive a major share of their profits outside the United States.

While a rising stock market may look good on paper, the inner workings of the US economy are badly damaged goods. States are struggling to meet budgets and there's been little to nothing done to address the root causes of the national slow-down: housing and jobs. we are living in a bifurcated economy and nation, and it is not likely to sustain itself well without some serious setbacks. But, for the time being, the status quo has carried the day, though its proclamations of recovery and prosperity (nobody actually saying that yet) don't ring true to many people.

Dow 12,719.19, +93.17 (0.74%)
NASDAQ 2,871.95, +37.93 (1.34%)
S&P 500 1,353.07, +13.85 (1.03%)
NYSE Composite 8,474.88, +78.40 (0.93%)

Advancing issues absolutely buried decliners on the day, 5126-1473. On the NASDAQ, 227 new highs and just 22 new lows. The NYSE had 287 new highs and 8 new lows, making the combined total 514 new highs and 30 new lows. These are the kinds of numbers that would signal a renewed bull market, indicating that there is more upside in the very near future, despite the low volume, which was at its high point of the week, not saying much.

NASDAQ Volume 1,793,291,000.00
NYSE Volume 3,860,334,750

Crude oil galloped ahead to the tune of a $2.02 per barrel gain, finishing at $98.67, which ensures high gas prices through the remainder of summer unless there's a sudden reversal (don't count on it). Gold posted a slight gain of $1.40, to $1,530.60; silver was up 62 cents, to $36.54, though it still seems range-bound and probably is, with the shorts still in control.

The gain in crude has outstripped the gains in the precious metals today, though it's difficult, if not impossible, to draw any sound conclusions from this except that the global central bank cartel likes higher oil prices much more than they like gold or silver. If they had it their way, gold and silver would not have any value at all.

Friday's non-farm payroll report should prove interesting, especially if it's an "official lie" of over 150,000 new jobs.

At the End of the Day, Everyone Knew This Was Coming

With the 8:30 am release of the May Non-farm Payroll date from the Bureau of labor Statistics, the bad news - for which everyone in the world had been pre-conditioned by NBC, CNBC and any other reliable propagandist sources - was finally revealed.

Only 54,000 new jobs had been created by the great ponzi scheme, the unimaginative artificial stimulus and $600 trillion in fresh buckeroos since last September from Fed Chairman Ben Bernanke.

The Keynesian experiment can now be exposed as the colossal failure that it is, though already the talking heads, left-wing politicians and idiotic economists from the Ivy League's ivory towers are already suggesting that the slowness in job creation is merely a "soft patch" in the recovery.

It is nothing of the sort. The US economy is closer to a complete shutdown and recession than at any time since the grand collapse in the fall of 2008. Not only were the NFP numbers off by grotesque magnitudes of scale, any suggestion that conditions will improve over the summer - while the worst congress in the history of our nation idly postures over the debt ceiling and enormous deficits - is nothing short of hot, gaseous, noxious air, the kind most prevalent inside Washington DC's beltway.

Rather than belabor the obvious: that the economy is stuck in first gear, if not simply idling, it is time for Americans to come to grip with what we have. And that is an aging population living on borrowed time, borrowed money, false hope and remembrances of things past, without an industrial base, energy policy, sound money, honest markets nor anyone even remotely willing or able to fix them.

We are a hollow shell of a formerly great nation, put on its collective knees by a cabal of bankers and politicians whose only purpose has been personal gain and control, a control which they are rapidly losing. 17% of the country receives food stamps. More than half the country depends on some form of government check for their basic needs. The middle class has been relegated to numb consumers of foreign goods, many without jobs and those that have them living in abject fear of losing them.

Nobody except bankers get raises, educational standards have been lowers persistently over the past forty years, though that's hardly a problem since there is no steady employment for engineers, chemists, biologists, and a raft of other high-skilled fields of endeavor.

All of the economic numbers for the past month have been dismal, despite the government's best efforts to fudge, obfuscate or otherwise obscure the truth that we, as a nation, are smack dab in the middle of the worst depression in the country's history.

People are living in houses without paying mortgages for two, three and four years because the banks can't produce clear titles, the courts are overwhelmed even when they dispense justice properly, which is seldom, and the number of weeks spent on unemployment is now at an all-time high.

Housing values have plummeted to levels worst than during the Great Depression, gas is more than ten times as expensive as it was 40 years ago, new car sales, retail sales, industrial production, capacity utilization, factory orders and durable orders are beginning to fall off a cliff. Municipalities everywhere are struggling to close budget deficits, while pensions are underfunded and tax receipts are falling. About the only thing that isn't falling apart the amount of outright lying and deception delivered daily from the various mainstream news outlets, politicians and business leaders, some of whom have already jumped ship and are oopenly saying that another recession is on its way (considering the first one ever ended).

And that's the good news.

It's good news that all of this is finally getting to see the light of day, so that Americans can outrightly reject any and all new proposals, taxes, regulations, elections and instead stand for change.

This is A TRULY GREAT DAY FOR AMERICA AND FREE MARKET CAPITALISM...

because the jobs data and all the other bad data from the past three weeks show that central planning doesn't work. Bailouts of insolvent banks don't work. Giving taxpayer money to the richest people and foreign financial institutions doesn't work. Mark this day down because it is the date upon which Wall Street, the Fed and the federal government (throw in the mainstream media for good measure) are shown to be complete frauds, liars and cheats, absolutely unfit to serve the good people of America in any capacity.

America can and will survive. Watch for more of the following, strictly from the private sector:

Innovation

entrepreneurship

rent parties

barn raisings

barter clubs

independent contractors

tax evasion

home business

cottage industry

buy American!

back yard garden

handymen (and women)

underground economy

black markets

and forget the following:

mortgage payment

property tax increase (or any tax increase for that matter)

bank loans

TBTF (at least two of the big four BAC, JPM, WFC, C) will fail within a year

minimum wage

health insurance

The restructuring of America can begin apace! Get the insurance companies out of health care and let doctors earn their livings like they should, treating their patients individually.

National banks will become much smaller.

The Fed has to go.

Back to the gold standard or some semblance of sound money.

We can also repeal the minimum wage, along with severely limiting all the other employment regulations, like unemployment benefits, worker's comp, Social Security and medicare deductions, etc.

Start putting up WE WIN! signs and people will first think you're nuts, until they start seeing you living better than them by rejecting the status quo.

It's time to put away the idea that government can fix problems, because they simply create more of them, along with wars, fear, famine and homelessness and time for Americans to do what they have always done in times of crisis: stand up individually and take control of your lives.

Stocks tumbled again, on low volume, but it could have been worse. Since the poor jobs number was telegraphed by the ADP report, much of the selling was already well underway on Wednesday. Today's figures were mostly priced in, though since there's almost no participation by individual investors at this point, the big, controlling interests can hold a while longer and take stocks down as they please. Wall Street has been and now is completely irrelevant. One could do better stuffing dollars into mattresses than taking a flyer on the various stock offerings being kicked about.

Th Dow Jones Industrial Average fell for the fifth consecutive week, the largest expanse of time for continuous losses since 2004, and it doesn't look like it's going to end any time soon. Stocks are probably 30-40% overvalued at this juncture, and a crash is dead ahead.

Dow 12,151.26, -97.29 (0.79%)
NASDAQ 2,732.78, -40.53 (1.46%)
S&P 500 1,300.16, -12.78 (0.97%)
NYSE Composite 8,222.15, -55.61 (0.67%)

Declining issues buried advancers, 4809-1792. NASDAQ new highs totaled 31, while there were 82 new lows. ON the NYSE, 37 new highs did not measure up to 48 new lows. Combined, there were 68 new highs and 130 new lows. The most reliable leading long-term trend indicator - highs-lows - has been flashing signs of reversal for months. This should be the tipping point after which the direction will be identified undeniably as straight down. As long as new lows outweigh new highs for a period of more than about six to eight trading days, there is virtually no way to reverse the trend. It also will be telling if the gap between the highs and lows continues to widen. Even as such, the Dow has already shed 657 points from its nominal high, reached exactly one month ago today. The turnover in the highs-lows is just now confirming the trend despite desperate pumping, dumping and priming by manipulative stock insiders.

NASDAQ Volume 1,908,014,125
NYSE Volume 4,028,291,000

The commodities markets were a tragi-comedy of denial that global deflation has ensued. All manner of commodities fell sharply in the morning, only to be ramped back up in the afternoon. Crude oil fell by a laughable eleven cents! to close at an abysmally-overpriced and speculatively-inflated $100.22.

Gold could not be held back, gaining $9.20, to $1543.00. Silver, despite being pushed down to near $35 early on, ended up 17 cents, at $36.32.

At least the weather is better. This is by no means over. Rather, a collapse worse than 2008 is already in the cards, though not represented in prices. The sum of all fears is on its way and it will be deflationary, desperate and lasting for more than a generation.

Snow Job in May

It is difficult to express just how warped US markets have become, though, from the movements of the past two trading days, a case can be made that the markets are being guided by forces that are distinctively not based on free market ideology nor statistics that can be trusted within any degree of accuracy.

Taking a look first on the massive downdraft in commodities - mostly silver and crude oil - from Thursday's trading, one should look no further than the CME (Chicago Mercantile Exchange), the overarching body that controls trade in futures, options and various other derivatives.

The CME raised margin requirements - the cost to buy a futures contract - on silver four times in the past two weeks. That resulted in many speculators - generally honest traders working with leverage via margin - to reduce their exposure, thereby taking the price of silver from close to $50/ounce on Friday, April 29, to under $35/ounce by Thursday, May 5.

This really doesn't require much thought. If it costs more to buy something - in this case a silver futures contract - you either buy less of it or don't buy at all, waiting until the price is more reasonable. In the case of silver futures contract, a highly inelastic entity (You can't buy a fraction on one; you must buy a full contract.), one is either in or out. When margin requirements (cost) rise rapidly, many legitimate buyers head for the hills. This is exactly what happened all week, culminating in the final thrust downward on Thursday, May 5, as there were also fewer short contract holders which would have provided some support, having to cover as prices fell. Alas, the shorts were also out of the market due to exorbitant margin costs.

This makes a great deal of sense from a banker's perspective. Money flowing into either physical silver or gold is money out of circulation, and, more dangerously, into a competing currency. Precious metals compete with all fiat (paper) currencies, insofar as they are considered stores of wealth and mediums of exchange. Thus, when one buys Silver Eagles, silver bars, etc., bankers get worried because the buyer exchanged paper dollars (or Euros or Yen or Reals) for physical metal. And if the price of physical metal and the amount in circulation gets too high, the need for paper dollars is diminished.

Silver, being the "coin of gentlemen," as opposed to gold, "the coin of the realm (or, kings), is a very dangerous commodity to the banker line of thought. If more and more ordinary people - the "little guys" upon whom the banker depends - conduct transactions in silver - the utility of paper money declines, velocity decreases and all of a sudden there's a liquidity crisis.

This is exactly what the global (mostly in the USA) banking cartel feared as silver approached all-time highs, thus the need for margin hikes to kill the competing currency before it became a real threat.

The same is true for gold, to a lesser degree, as central banks hold gold as a final backstop to their paper currencies, though it is leased out, levered 100-1, and therefore, being a useful conduit for the bankers, not as volatile as silver.

As for oil, what caused Thursday's sell-off is a little less clear, but again, the CME, which owns the NYMEX, where West Texas Intermediate oil futures (the most popular and widely held) are traded, extended trading range limits from $10 to $20, exacerbating an already decisive decline.

In simple terms, the CME allowed oil to fall though the floor simply by changing the rules in the middle of the day. There's less concern in the price of oil declining, because lower oil prices are generally good for everybody outside of oil companies and Middle East sovereigns, so less attention was paid to the CMEs quick decision, but it still underscores the levels at which rules will be either broken or amended to accommodate the needs of the powers behind the money (read: the too big to fail banks, the Fed and Treasury Department).

Now to Friday's fiasco in the Bureau of labor Standards (BLS) non-farm payroll data for April (the establishment survey). While the consensus opinion had been trending toward lowered expectations, the BLS surprised everybody with the announcement of 244,000 new jobs created during the month, 268,000 in the private sector, offset by a loss of 24,000 public sector jobs - mostly municipal and state employees being furloughed.

What's intriguing about the non-farm payroll data is how the numbers are created, and the use of the word "created" is no accident, because the BLS employs such such extreme and convoluted data manipulation that pure statistics become rather murky. It's easy to say that our monthly "jobs data" is more a political process than an actual statistical survey with a margin of error in the low single digits. It's guided by a smallish sample and then amplified by what's known as the "birth/death model," a number created to reflect the number of businesses opening (birth) and closing down (death).

Does the BLS actually sample bankruptcy and new corporation filings in selected communities and states? No. Does the BLS ever adjust the number for seasonality. No. For accuracy, yes, but not in the month-to-month survey numbers.

So, from where did the 244,000 net new jobs in April come? 175,000 came from the birth/death model. And while some are contending that roughly 62,000 came from the widely-published McDonald's hiring, the Wall Street Journal begs to differ, stating that McDonald's hire date was April 19, a week after the BLS survey period.

Taking just the raw data, subtracting out the birth/death figures, the US economy consisting of existing businesses created 69,000 net new jobs - not so hot. If we can believe that a couple hundred thousand newly-minted entrepreneurs joined the business fray and 30 to 40,000 businesses went belly up in the same time frame, we could believe this figure. However, like the missing photo of a dead Osama bin Laden, there's no proof of these "births" and "deaths," only trust in the BLS, which, by the way, stretched credulity again by proclaiming the official unemployment rate to have risen, up to nine per cent (9%).

That rise correlated to the other side of the BLS coin, the household survey, which showed the number of employed persons to have fallen by 190,000 from the March reporting period to April.

Is it a gain of 244,000 jobs or a loss of 190,000? Who knows? The point is that many decisions are made based upon the BLS data, which, as shown, is more guesswork and massaging of data than trustworthy data, but one wonders if these decisions are based on reality, a perception of reality, or if the reality is being superimposed upon the American public to suit the current narrative of "recovery."

Whatever the case, it seems a shoddy way to run a country's economy, with dodgy data and questionable maneuvers by those running the exchanges.

It doesn't snow much in the USA in May, but that surely doesn't preclude a massive snow job by Wall Street and the federal government and their extensions.

Perception Trumps Reality: Stocks Buoyed by Jobs Data

Like it or not, most of the people who watch these kinds of numbers generally accept what the BLS calls "data" as being somewhere close to the truth. Regardless of opinions on the birth-death metric, various seasonal adjustments and the entire methodology which leaves out discouraged workers, March non-farm payroll provided a boost to markets prior to the bell, posting a monthly jobs gain of 216,000.

Broken down, the private sector showed a gain of 230,000 jobs, while the public sector - government - shed 14,000 in March. That ticked the unemployment rate down to 8.8% and marked the first time in five years that private employers added more than 200,000 net new jobs.

In the widest general terms possible, it was rousing good news for the US economy and the stock market, whether the robust numbers are true or not. Stocks galloped out of the gate, gave much of their gains back in the afternoon and finished on an uptick.

Dow 12,376.72, +56.99 (0.46%)
NASDAQ 2,789.60, +8.53 (0.31%)
S&P 500 1,332.41, +6.58 (0.50%)
NYSE Composite 8,469.34, +64.36 (0.77%)

Advancing issues led decliners by a solid margin, 4204-2339. NASDAQ showed 249 new highs and 29 new lows. The same spread was in effect on the NYSE, with 382 new highs and 12 new lows, even more an extreme spread than yesterday's already overbought situation. Volume was slightly better than the low, low numbers posted all week.

NASDAQ Volume 2,057,080,375
NYSE Volume 4,220,516,000

The bad news of the day came from the commodity space, where crude oil hit another 2 1/2 year high, closing at $107.94, up $1.22 on the day. With equities soaring and the outlook for extending the Fed's QE program past June dying on the vine, precious metals took an untimely hit, with gold dropping $11.00, to $1,428.90, and silver falling in tandem, down 16 cents, at $37.73.

As the second quarter starts out on a positive note, investors appear pleased with recent gains, unemployment actually appears to be on the wane and the governors of Federal Reserve are taking bows and praise for how they've handled the as-yet-unresolved financial crisis.

With the caveat that the financial media might be spinning everything a bit more positively than most would dare, America seems not ready to fall into the ocean of debt below it, nor does the congress have gained much in the way of fiscal restraint, though signs of progress have been noted, especially in the House of Representatives.

There's still enormous problems which have yet to be sorted out, but only the robustness of the American economy can be credited with having withstood shocks equally from the financial, natural and political spheres.

While this space has been generally devoted to the darker sides of the economic debate for quite some time, Mr. and Mrs. Average American don't read Fed minutes, track commodity prices or even understand what a credit default swap is. Rather, the bulwark of American enterprise wants only to go to work, receive a fair pay rate and raise their families.

It is a fact that Americans still maintain the highest standard of living on the planet and despite its detractors, maintains a safe, livable environment for even the poorest of its citizens. The world revolves around the US dollar, love it, hate it or loathe it, and it probably will for some time. There are many problems still needing correction, but for today at least, the dark clouds of the past few years seem to be parting and the sunshine of economic freedom is shining through.

Maybe the words of Peter Benenson, the English lawyer and founder of Amnesty International, are appropriate for today: "It is better to light a candle than curse the darkness."

What's This? Markets Lower? Metals Gain

Not much to say about today's action except that most of the moving was done in the final half hour of the session, probably due to some not wanting to be out in front of Friday's non-farm payroll data (expectations: +210,000).

Those running scared at the end of day can be excused for their skittishness as the markets posted their best first quarter gains since 1998, near the height of the tech boom.

Uncanny as that may seem, stocks are pretty much in a very overbought condition, by any standard, though it light of global conditions, it's extreme. That makes Friday a key date, not only because its the first day of the month, but also the first trading day of a new quarter. Recent history provides that first days of months over the past 18 months have been powerful uptrend days, though very few have also had jobs data tied to them as well.

That sets up interesting cross-currents for tomorrow, so rather than speculate, it may be wise to just let the chips fly - and fall - where they may.

However, with quarterly gains now locked in place, the wise guys might feel compelled to go short through tax day, as the markets still have not regained their February 18 highs. The truncated correction may begin to assert itself again, as might normal economic forces, though these can always be offset by the Fed handing fresh greenbacks to the Primary Dealers, sending stocks ever higher.

All that market noise might just render Friday a good day to start a three-day weekend.

Dow 12,319.73, -30.88 (0.25%)
NASDAQ 2,781.07, +4.28 (0.15%)
S&P 500 1,325.83, +2.43 (0.18%)
NYSE Composite 8,404.98, +11.71 (0.14%)

Advancing issues finished ahead of decliners again, 3779-2732. New highs on the NASDAQ totaled 195, with 33 new lows. On the NYSE, there were 236 new highs, 15 new lows. Again, selective, but nonetheless, extreme. Volume put in another decent day, but still was nothing to get excited about.

NASDAQ Volume 1,920,940,625
NYSE Volume 4,253,768,000

West Texas Intermediate on the NYMEX posted a massive gain of $2.45, closing at $106.72, a 30-month high. Precious metals had a solid day, with gold up $15.10, to $1,438.90 and silver up 38 cents, to $37.89. Both are within a whisker of multi-year or all-time highs. April could be the month that gold finally rockets through resistance and goes ballistic, though the betting is that silver will outpace it. By the end of the month we could be seeing gold at $1520 and silver over $44 per ounce.

...and then, there's this brilliant opinion from an Irishman abroad:

Markets Continue to Rally in Spite of World Tensions

Honestly, I've never - in more than 40 years of market-watching - seen anything quite as obnoxious, illogical, repugnant and obscene as the current market dynamics.

Japan is reeling from the tsunami of nearly three weeks ago, their nuclear disaster continues to worsen, and all the Wall Street mob can do is push stocks higher and higher.

Housing is still in a major depression, real unemployment is at 17%, states and cities are struggling to balance their budgets, Northern Africa and the Middle East are in flames and revolution. Somehow, Wall Street imagines this to be bullish.

I consider it a trap, designed to entice small investors to plunge into stocks just when they are approaching the most overbought condition in the past two years, spurred on by free money being pumped in by the Federal Reserve and just before the release of first quarter earnings statements.

It's difficult to believe anything put out for inspection by the financial media, as controlled as it is by the Wall Street elite and how piously they - CNBC, Reuters, Bloomberg and the Wall Street Journal - pray at the font of greed and lasciviousness.

Someone said the other day that we have become George Orwell's 1984 - forever at war with Eastasia or Eurasia, where doublespeak is the norm, and where love is hate, evil is good, and thoughtcrime is prosecutable.

We've passed into an era of extreme income disparity, and the elitists are, as usual, winning. Ever so slowly, the entire population of the planet is being lied to, poisoned, swindled and debased. Something has to change. But, there is so much cognitive dissonance within the general population, I fear nothing will change. We will - with the exception of a few - accept our fate willingly and go about our dreary days without purpose, without cause and without a future.

Dow 12,350.61, +71.60 (0.58%)
NASDAQ 2,776.79, +19.90 (0.72%)
S&P 500 1,328.26, +8.82 (0.67%)
NYSE Composite 8,416.69, +71.31 (0.85%)

Once again, advancing issues led decliners, 4709-1835. The NASDAQ showed 192 new highs and 23 new lows. On the NYSE, there were 262 new highs and 12 new lows. Absurd. Volume was a little better than the previous two days, but only marginally so.

NASDAQ Volume 1,829,250,875
NYSE Volume 4,167,294,000

Oil eased off a bit today, down 52 cents, to $104.27, though still stubbornly clinging to the new, semi-permanent $105 area. Gold gained $7.50, to 1,423.80, and silver was up 52 cents, to $37.51.

Prior to the market open, the ADP private payroll data was announced for March, showing a gain of 201,000 new jobs. Usually disregarded as a flawed survey, today it was warmly embraced by the financial media elite, in advance of Friday's March non farm payroll numbers.

Does it matter? Even if the government announces that unemployment is 8.5% (laughable, though they might), the new jobs are paying 60-80% of what the lost jobs did. The middle class continues to be squeezed to death by income stagnation and inflation in prices for everyday living goods, gas, food, utilities, clothing.

Where will it end? When will it end?

While Japan Melts Down, US Stocks Melt Up

Though many doubted the thrust and wisdom of the Federal Reserve's QE2 and ZIRP efforts, the Fed can now claim some success.

That success, however, is limited to one's perception. If higher commodity, food and energy prices, a completely collapsed housing market and a stock market rally in which almost nobody participates is one's idea of success, then a big hand for Chairman Bernanke and his merry band of idiots otherwise known as the Board of Governors of the Fed.

It was reported yesterday in this space that trading volume had sunk to its lowest level of the year. Today's numbers were a mirror image, marking the two slowest trading days of the year, for sure, and possibly the lowest two-day total volume since sometime in 2009.

So much for the so-called wealth effect we hear so much about. The only investors actually trading are the Primary Dealers with their virtually-free POMO money. It's almost as though the markets have lost the confidence of the individual investor forever. Surely, those with pension funds tied to the market must be seeing better returns, but how long they will last is anyone's guess, though it's fair to say that as long as the Fed continues to throw $100 billion or more into the fray, stocks will keep rising. It's been about the easiest trade ever.

There isn't much more to say about today's gains other than they completely disregarded the situation at the Fukushima Daiichi nuclear plant in Japan, which is now almost completely out of control, as one reactor appears to have melted through its containment vessel.

The wild-eyed buyers of today also paid no heed to the S&P/Case-Shiller 20-city index, which confirmed that housing has entered the double-dip phase, falling for the sixth consecutive month. Of course, that would assume that one believes the first dip ever ended.

And everybody simply looked the other way when the Conference Board showed its index of consumer confidence fell to 63.4 this month, from a revised 72.0 in February.

Apparently, we mere mortals simply don't understand the stock market, where news is always bullish, no matter how bad it is. Supposedly, a comet obliterating all of Europe would be cause for a 1000-point rally according to the current metrics.

Whatever is going on down on the trading floors and at the desks of the biggest brokerages, it simply doesn't jibe with reality, but that's what we've got, a rogue market on its very own illogical trajectory.

Dow 12,279.01, +81.13 (0.67%)
NASDAQ 2,756.89, +26.21 (0.96%)
S&P 500 1,319.44, +9.25 (0.71%)
NYSE Composite 8,345.38, +48.86 (0.59%)

Advancers led decliners, 4381-2145. The NASDAQ reported 114 new highs and 27 new lows. On the NYSE, there were 117 new highs and 12 new lows.

NASDAQ Volume 1,610,826,875
NYSE Volume 3,856,315,250

Commodities were mixed, with oil up 81 cents on the front-end WTI contract, to $104.79. Gold slipped $3.70, to $1,416.20 and silver fell 10 cents, to $36.99 per ounce.

This represents one of the more confusing markets in history. Bad news simply will not move stocks to the downside, and any downward move is met with a rally in short order, wiping away any and all losses in a matter or days, or hours.

Hardly mentioned is the upcoming non-farm payroll data courtesy of the BLS on April 1, this Friday, though prior to that, on Wednesday, ADP will report their proprietary survey of private sector employment. That little nugget will be released at 8:15 am, EDT, though it's generally not a market mover, being widely discredited as being unreliable.

This is fun for somebody, but who that might be remains a mystery.

Taking a Stab at the NFP Number

There's about an hour to go before the release of the BLS Non-Farm Payroll data for February, and, since listening to ex-chairman Greenspan dodder on CNBC is causing severe intellectual pain and suffering, I've decided to take a stab at what the number will be.

With government work contracting generally over the past 3-6 months, we're likely looking at a reduction in public sector jobs of somewhere between 15,000 and 30,000. That implies that to reach the number some have projected, 175-200,000, the private sector would have to had created upwards of 200,000 jobs, and that seems highly unlikely.

My best guess - and it's nothing more than a guess because I'm not taking into account the arcane and muddy BLS birth-death models and other smoothing mechanisms they employ - is that the private sector created no more than a net 160,000 new jobs, and even that might be a stretch.

Let's put the number at +135,000, below consensus estimates, but, considering how bad January was, this number could - and maybe should - be considered a vast improvement.

Not that anybody should be happy with this number, since the amount of stimulus by government and the Fed has been enormous and we should, at this point in the "recovery," be creating 300-350,000 net new jobs, anything above 125,000 should be almost satisfactory, or, a "D" for underachievement for the Fed.

So, that's it: +135,000. I can live with that, and, even if I'm wrong, I'll be no further off than the majority of the experts out there.

Big Rebound for Stocks on Low Volume

Today's jump in equities, led by Industrials, Financials and Health Care, was mostly based upon the usually shaded numbers from the BLS on initial unemployment claims, which came in at a three-year low of 368,000.

A good number, without a doubt, but market bettors were staking into stocks on the probability that those figures would translate into a much-improved non-farm payroll number on Friday. The current estimates are calling for the US economy to have created between 175,000 and 200,000 net new jobs in the month of February.

Taking into account the massive sums of money pumped into the economy through various stimuli, tax credits, bailouts, low tax regime and the Fed's QE, QE2 and ZIRP policies, it's about time for companies to begin hiring, and with gusto. Should the number tomorrow fall short of expectations, it would provide more fodder for those who believe the great Keynesian experiments of Ben Bernanke and the oligarchical banker subsidies have been for naught.

Those on the "recovery" side of that argument better hope that the BLS has massaged the numbers sufficiently to manage the message.

While today's gains were awesome to behold - the best for the S&P since December 1 and the biggest percentage gain for the NASDAQ since February 1 - the major indices are still 1-1 1/2% below the recent (Feb. 18) highs. events are still very much in flux, oil is still abnormally high-priced and we're still guessing that unemployment is beginning to come down, and worse yet, that guess is based upon a very faulty - and often revised - series of numbers supplied by a dodgy government agency, the BLS.

Not to poke holes in the recovery argument, for that's becoming a cause for being labeled un-American, but the stock market is such a wild, wide-open casino these days, that a big upside move is nothing upon which to hang one's investment hat. Additionally, it should be pointed out that the huge two-year rally off the March 9, 2009 lows has been upwards of 95% on the major indices and it is nothing more than a cyclical bull rally inside a secular bear market, one which the Western world entered in August of 2007.

Then there's still the question of what will happen when the Fed pulls the plug on QE, come June, or whether they will have the nerve and economic data to allow them to do so. That's when things get really dicey, as the underpinnings of the market are pulled out and interest rates make a natural rise, causing all that glorious government debt to be ever-more expensive to pay back.

And, if the Fed decides to pull the veritable plug of buying all US Treasury issuance, how soon will be see failed auctions? A scenario like that would make 2008 look like a stroll through the amusement park.

Enjoy it while you have it, perma-bulls. It may not last very long, especially in the face of what's gone on in gold and silver, the two behemoths scaring the living daylights out of central bankers everywhere.

Dow 12,258.20, +191.40 (1.59%)
NASDAQ 2,798.74, +50.67 (1.84%)
S&P 500 1,330.97, +22.53 (1.72%)
NYSE Composite 8,465.45, +126.69 (1.52%)

Matching the headline numbers, advancing issues galloped ahead of decliners, 5126-1431. NASDAQ new highs: 160; new lows: 22. NYSE new highs: 228; new lows: 4. Volume was down in the doldrums again, though not as badly as other, weaker days. With all the profits generated over the past two years, one would expect to see much higher volume on big trading days like this, but the bulk of the gain was done by noon, after which markets just marked time ahead of the key job announcement tomorrow morning.

There's also the small technical matter of the key, double-engulfing day on Tuesday, a symptom and a signal for a course correction, that is still in play. Today's high on the Dow was still 20 points shy of the opening high on Tuesday.

NASDAQ Volume 2,005,997,000
NYSE Volume 4,926,878,500

Oil took a bit of a breather, as events in Lybia and the Middle East were downplayed. NYMEX crude dipped 32 cents, but stabilizing over $100 - today's close was $101.91 - per barrel isn't anything anybody should be bullish about, unless one owns a well or three. Higher oil prices precede recessions, every time, and unless the situation in the Middle East isn't quieted soon, that high price is going to remain in place and possibly go higher. Moods change on the turn f a dime these days, and today's price - as well as today's stock gains - could be ancient history in a matter of hours or days.

Precious metals took a well-deserved day of profit-taking, and are consolidating at elevated levels. The next move higher should commence whenever conditions warrant, that being any time there's a flare-up in the Middle East, or, like Jean Claude Trichet mumbled today, interest rates should rise in Europe in order to stave off inflation.

Gold dropped $21.30, to $1,416.40; silver was down 51 cents, to $34.33. Both of those levels are close to historic, recent (yesterday) highs.

The future of the markets hinge upon tomorrow morning's key employment number, though one should not get too tied to this particular measure. There are more forces at work besides employment figures, though traders seem to want to hang their collective hats on this one.

36,000 New Jobs and 9% Unemployment, Really?

There's an old adage that traders often cite which goes something like: The market can remain irrational longer than you can remain solvent.

This would be applicable today for anyone (present author included)who believes, a) the market is currently overvalued, and b) economic data should matter.

The latest Orwellian absurdity comes from the Department of Truth, otherwise known as the Bureau of Labor Statistics (BLS) which today produced the ultimate statistical aberration in saying that the number of net new non-farm jobs produced in America in the month of January was a mere 36,000, when expectations were for growth of 148,000.

Notwithstanding that number of new jobs doesn't even keep pace with new entrants into the work force (more on that later), the BLS also advised that the official unemployment rate fell from 9.4% to 9.0%.

By just about any measure, this is statistical nonsense. The only way the unemployment percentage could fall on such a low number of new jobs created would be if the labor force had suddenly declined drastically.

Let's check: no major disasters (well, besides a few big snow storms), an entire city was not wiped out by a nuclear blast and there was no mass suicide by employed people ensconced in office cubicles. However, the BLS has concluded that the US labor force declined from 153,690 to 153,186. In other words, more than 500,000 people just dropped out of the labor force in January.

On that topic, we wonder where they went and what they are doing to survive. Maybe they all were abducted by aliens, or since the weather has been so cold and snowy, decided to just leave their jobs. But, but, but, wouldn't that make the unemployment rate go up, rather than down?

Not according to the BLS. The true explanation is that these half million people were collecting unemployment insurance benefits since probably around February of 2009 and their 99 weeks have run their course, so, let's just not count them any more. Simple logic, but terribly, terribly wrong, because if we just dis-employ people, wait 99 weeks and then dismiss them from the survey numbers, we could see the unemployment rate at just 6 or 7 per cent before long, depending on how quickly the government decides that work is optional, and people can just survive on whatever scraps they pick up alongside the roads while they're on their way to... nowhere, presumably.

The BLS figures are so cockeyed as to make the authors blush, but we don't know who it is who puts these figures together each month, so we'll never know who should hold the shameful award for most obtuse statistics, which these most surely are.

Because the numbers are so incongruously incoherent, investors, or the computers running the algos in the market, must have completely overlooked them, because if the first number - 36,000 net new jobs - is true, the US economy is sinking faster than a mob informant in the East River.

But, if the second number - 9.0% unemployment - is the real deal, then corporations and small businesses are hiring at a break-neck pace and the recovery is on track and we should all be eating lobster tails for dinner every night.

(Whew! I need a drink, and maybe some pills and an IV.)

The truth of the matter is that neither number is correct, though the 36,000 figure is probably a lot closer to the truth than . They are both highly-massaged digits from an unreliable sample in a series that is hopelessly flawed in many ways. And so, the markets did what any overinflated, hyped-by-monetary-easing, derivative-driven market would: they ignored them and went higher, mostly (the NYSE finished fractionally lower).

Dow 12,092.15, +29.89 (0.25%)
NASDAQ 2,769.30, +15.42 (0.56%)
S&P 500 1,310.87, +3.77 (0.29%)
NYSE Composite 8,288.50, -0.55 (0.01%)

Losers finished ahead of gainers, narrowly, 3327-3150. On the NASDAQ, there were 167 new highs, 25 new lows. On the NYSE, new highs beat new lows, 221-12.

NASDAQ Volume 1,966,407,750
NYSE Volume 4,477,823,500

In the commodity space, crude took a dive of $1.51, to $89.03, on rumors that Egyptian president Hosni Mubarek would step down, which makes little sense, except if the price was already $1.50 too high to begin. Gold lost $4.00, to $1,349.00, while silver gained 33 cents, to $29.06. We may be witnessing another dislocation of correlation in the precious metals as the gold-silver ratio regresses to the traditional norm of 16:1, though that figure is still a long way off in the distance.

Taking the BLS numbers into perspective, we are reminded of the quotation, "There are lies, damned lies, and statistics," popularised in the United States by Mark Twain (among others), who attributed it to the British Prime Minister Benjamin Disraeli (1804–1881). The two are probably enjoying a good laugh and twirl in their respective graves over the follies of fiat currency tied to nothing but the "good faith and credit of the government, of which there is little of the former and too much of the latter.

The world is not coming to an end, though the world as we know it, is. Metrics and measurements change according to political whim, and we can be relatively assured that most of the statistics and rounding-offs coming from the public sector (and many from the private sector, like bank profits) are fatally flawed and not to be believed.

With this in mind, one should not fret much over the immediate future, for it will look much like the immediate past. Forget economics for the weekend, enjoy the Super Bowl and begin making plans for a radically-different future come Monday.

Sideways Into Friday on December Jobs Data

Since the big gap-up run-up at the open on Monday, stocks have gone essentially sideways, as yet indeterminate as to the direction of the new year, with a new congress, but, unfortunately, the old guard still running the show down at Wall and Broad. Since the big new year's burst Monday morning, the Dow has traded in a very narrow 100-point range.

The show, duller than normal, is exhibiting the kind of trade flow that unsure markets normally do, up one minute, down the next, awaiting the next data flow, pivot point, news or rumor. That pivot or data point could come as early as tomorrow, and probably was delivered a little in advance, today, when, after being loudly trumpeted as the strongest holiday shopping season since 2007, retail sales for December missed analyst expectations.

This kind of "actual" numbers reporting should have been expected, considering the happy-faced lunatics which masquerade as journalists on the major cable and network news shows. They were fed a large baloney sandwich by wall Street in December, and, after gnawing through every last crumb, puked up the residuals to the moronic American consumer. On the news, the markets, instead of a quick reversal, merely glossed over and continued to trade along choppily.

Maybe it will take unbelievably horrible news to finally end the fraudulent rally that has consumed every last remnant of market confidence over the past four months. Then again, tomorrow's December jobs number may have been the plan to tank stocks and retail paper profits all along. We'll know by 8:30 am tomorrow. Until then, we can only wheeze, curse and vomit at the charade trading stocks has become.

Dow 11,697.31, -25.58 (0.22%)
NASDAQ 2,709.89, +7.69 (0.28%)
S&P 500 1,273.85, -2.71 (0.21%)
NYSE Composite 8,000.90, -39.14 (0.49%)

Declining stocks held sway over advancers, 3878-2615. NASDAQ new highs: 189; new lows: 9; NYSE new highs: 199; new lows: 6. Volume was moderate.

NASDAQ Volume 2,118,538,500.00
NYSE Volume 5,440,849,500

Oil for February delivery fell another $1.81, to $88.38. Gold dipped $2.00, to $1,371.70. Silver lost 7 cents, to $29.13.

Unemployment data for the most recent week showed an increase of initial claims, to 409,000, after a revised figure of 391,000 in the previous week. If there were post-holiday layoffs, which there always are, they will be reflected next week. Tomorrow's non-farm payroll report, as dubious as the numbers always appear to be, may, nonetheless, be a market mover.

Major Payroll Miss Slows Rally

Truly, the headline should have been worse, but the efforts of our beloved Federal Reserve, relentlessly supplying free cash flow to the entire banking and finance system through QE2, turned what, in ordinary times, should have been a major drop in the indices into a small gain. Obviously, these are not ordinary times, as the Fed's policies and government inabilities have completely distorted equity and bond markets, though, bonds, admittedly, are a little less affected.

The culprit in this case was a woeful reading from the BLS on November non-farm payrolls. Expected to come in at 150,000 new jobs, the miss was massive, registering at only a gain of 39,000 for the month. The unemployment rate was also hiked to 9.8%. A miss of this magnitude should have caused a major sell-off of something along the lines of 200 points on the Dow, but the smiley-face, feel-good "recovery" posture foisted upon an unsuspecting public by the charlatans who call themselves the "financial media" on CNBC and elsewhere, in perfect Orwellian doublespeak, turned this negative into a positive, suggesting that the lack of jobs in America is a good sign that the Bush tax cuts, QE2 and unemployment insurance will be extended.

Suddenly, like magic, the fact that there's only one job for every five applicants in America - during the height of the holiday season, no less - is a very good thing indeed! On the other side of the coin, since most everything emanating from our nation's capitol and Wall Street are complete fabrications and half-truths, at best, perhaps the doltish politicians running the circus thought a little depression might be good for what ails us.

Washington is so completely corrupt and bankrupt it's appalling, even to below-average fifth graders, who are likely to be able to see right through the politics of fraud. Nothing matters to these people except stock prices and elections. Half of the Southern states are starved for funds, as are most of the Northeastern ones along with California, but that's not anything that concerns them. They'll mindlessly dawdle over minutia like 3% tax cuts instead of actually handling matters of national importance. Thank goodness for Wikileaks and the internet, for displaying the true level of corruption and ineptitude that has brought the country to its knees.

Dow 11,382.09, +19.68 (0.17%)
NASDAQ 2,591.46, +12.11 (0.47%)
S&P 500 1,224.71, +3.18 (0.26%)
NYSE Composite 7,751.58, +39.33 (0.51%)

Amazingly, advancing issues outnumbered decliners by a substantial margin, 4029-2364. New highs again beat back new lows, 497-39, entirely similar to the past two days. Yes, siree! The same stocks, being endlessly pumped to infinity. The best news is that volume was down, meaning Goldman Sachs probably turned off one of its Cray XE6's for the weekend.

NASDAQ Volume 1,836,885,000
NYSE Volume 4,307,858,000

Oil futures reached a 2010 high, up $1.19, to $89.19. Precious metals and grains were also sharply higher. Gold ramped up $16.90, to $1,406.20; silver gained 70 cents, to $29.27. The silver and gold bugs would like to applaud Fed Chairman Bernanke for making them rich beyond their wildest dreams. The best part is that his failed policies will continue for many more months and be copied by our counterparts in the Eurozone, meaning the prices today will look like chickenfeed in a few years.

Of course, along with the precious metals go other commodities, like food and oil, so while the hoarders of gold and silver will be wealthy, they'll eventually have to hock that shiny stuff for gasoline, a loaf of bread and cans of tuna. At least they'll be able to get around and eat. The remainder of the immobilized masses will be starving to death.

We are deserving of all this, however, for electing spineless politicians and allowing the corruption and wantonness to go unchecked for so long. In another time, the wall of congress would be ringing with gunfire and bankers hung from the nearest lampposts, but the American public has been dumbed-down, satiated and nourished with the fruits of food stamps disguised as debit cards.

There will be no revolution, no wide public outcry. We will suffer quietly until the best of us all are gone and our children reduced to slaves. Bread and circuses is what we want and exactly what we will get.

Ponder these words, lest you fall into the trap of the status quo:

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

-- Thomas Jefferson

Trichet Promises More Money for More Banks in Europe

As the Fed's already-discredited quantitative easing (it was supposed to lower interest rates, not raise them, so we can assume Ben Bernanke was lying, again) funnels money from the Us Treasury to the Federal Reserve to the Primary Dealers (big banks), Europe has apparently taken notice and today, EU President Jean Claude Trichet announced a similar plan for the whole of the European Union, in which the ECB will purchase government (sovereign) debt outright and funnel it to the banks, which, like ours in America, are largely insolvent and lying about their financial conditions.

The race to the bottom, to devalue currency, has reached a new, more insidious stage that threatens the entire economic system of the world, in more pernicious and devious ways than the creators of sub-prime mortgages and credit default swaps could have ever imagined. With endless creation of money out of thin air, rampant inflation is inevitable, in everything except wages, that is, and possible home prices.

Choosing the path of least resistance, kicking the can down the road, so to speak, will lead to unimaginable horrors for millions of Americans and Europeans in terms of decreased buying power and slave wages, a fact that our so-called "leaders" know all too well.

With another $8 billion pumped into the coffers of the banks, Wall Street once again took off and ran with the money, pushing equity prices close to their peaks of early November.

Dow 11,362.41, +106.63 (0.95%)
NASDAQ 2,579.35, +29.92 (1.17%)
S&P 500 1,221.53, +15.46 (1.28%)
NYSE Composite 7,712.25, +108.52 (1.43%)

Advancing issues finished well ahead of decliners, 4442-2054. There were 501 new highs and 42 new lows, very similar to yesterday's figures, which implies that many of them were the very same stocks, pumped by the banks only to be dumped to the johnny-come-lately funds and individual investors. Volume was moderate, since most of the buying was by large firms with super-fast computers.

NASDAQ Volume 2,053,117,000
NYSE Volume 5,584,217,500

Commodities joined in the ramp-up. Oil gained $1.25, to $88.00. Gold was up a mere $1.00, to $1,389.30. Silver added 16 cents, to $28.57.

Tomorrow's non-farm payroll data for November should send stocks to higher highs and even more ridiculous valuations. Scheduled for 8:30 am, the fraud bankers will have plenty of time to adjust the algos on their computers for another glorious day of stock buying.

The following video contains some strong words from Vermont Senator Bernie Sanders over the increasing social inequality in America, citing how, as the middle class collapses, the top 1% earns 23.5% of all income, more than the bottom 50% of all earners. Further, the millionaires and billionaires on Wall Street are making more today, after we bailed them out, than before the bailout. It's poignant and very well worth watching.

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!

No Jobs, Free Homes, Cheap Money and High-Flying Stocks

The financial sector of the US economy delivered one of the more entertaining sessions of the past few months on Friday, first, trying to weight the relative benefits of a nation without jobs against the potential for more than a trillion dollars flowing into the currency via the Federal Reserve's Quantitative Easing, Part II, otherwise known as QE2.

At 8:30 am Eastern time, the Bureau of Labor Statistics released its survey of non-farm payrolls for the month of September. Wall Street and investors worldwide have shown a keen interest in this number all week, and the news that the US had shed another 95,000 jobs in the month was something of a surprise to many.

Watching the Dow Jones futures as the number was announced, the immediate, knee-jerk reaction was a drop of 88 points, though that was followed by a lightning-quick ramp up. Within minutes, the investor class had come to the perverse recognition that a poor showing in employment meant almost certainty for further QE by the Federal Reserve. In other words, much more free money would be headed to Wall Street and the corrupt banking system to keep stocks flying high.

The perversity of what was easily recognizable as bad news actually having an antecedent knock-on caused the market to open in positive territory and quickly surpass the 11,000 mark on the DJIA. Joining into the fray were most commodities, after some initial fits and starts, which also ramped up on the idea of a debased US dollar and limitless liquidity being supplied by the Fed.

With stocks cruising along, even word that Bank of America was halting all foreclosure activities in all 50 states - upping their previous call for a halt in just the 23 judicial foreclosure states - had virtually no effect on the celebratory mood. Sad as it may seem, investors somehow believe that outright inflationary policy against a backdrop of people with no jobs living in homes they cannot afford is somehow a great and marvelous thing.

Folks, I can't make this stuff up. We live in a country that's just about as upside-down as one can get.

Dow 11,006.48, +57.90 (0.53%)
NASDAQ 2,401.91, +18.24 (0.77%)
S&P 500 1,165.15, +7.09 (0.61%)
NYSE Composite 7,478.42, +53.41 (0.72%)
NASDAQ Volume 2,014,985,125
NYSE Volume 4,060,130,250

Advancing issues buried decliners, 4199-1500. New highs maintained their huge edge over new lows, stunningly, 471-33. Volume was anemic, being supplied by quants, Goldman Sachs, high frequency trading computers and the odd hedge fund here and there. Nobody seems to be concerned that the market is demonstrating absolutely the thinnest trading in our lifetimes.

In the commodity space, crude oil priced 99 cents higher, at $82.66 by the close. Gold resumed its ascent to the stratosphere, up $10.30, to $1,345.30. Silver tagged along with a gain of 52 cents, to $23.10.

Monday's a holiday, so the day's events will have plenty of time in which to sink in at cocktail parties and weekend outings. Somebody has to be able to make sense of it all, though that person isn't yet telling anyone.

August Jobs -54,000; Stocks Soar. Can Anything Be Trusted?

Total Nonfarm Birth/Death Adjustment +115

Why is that the most important number in this month's Non-farm Payroll Report issued by the Bureau of Labor Statistics (BLS)?

It's because the Birth/Death adjustmentis employed by the BLS to estimate the number of business openings (births) and the number of business failures (deaths) and is imputed into their formulas to come up with their monthly estimate of total US employment, better known as the monthly Non-Farm Payroll report.

Accordingly, when the BLS believes that there are more businesses opening than closing, the number is positive, boosting the overall employment picture, and the opposite when more businesses are failing.

From the charts provided by the BLS themselves, the birth/death model is accounting for a rapidly-expanding number of new businesses in the US (predominantly small businesses) as compared to businesses closing their doors. Should we be inclined to believe this fantasy, we would think the US economy, specifically small business, is booming and hiring new workers, though we know this is not even remotely the case.

We can make some comparisons and use other data to demystify the claims of the BLS. Specifically, we can look at the number of businesses filing for bankruptcy in 2010, and magically, we find a WSJ report that gives us a glowing headline - in support of the BLS birth-death model - though the devil, as usual, lies in the details.

The article states that while Chapter 11 reorganizations were down 17% in the first half of 2010 as compared to 2009, but Chapter 7 filings remained flat. So, what does this really tell us? Since Chapter 11 keeps a business's doors open, while probably reducing to some extent either wages or workers or both, that's positive, since fewer businesses are jumping through the Chapter 11 hoops and thus laying off fewer workers. But, when it comes to Chapter 7, which is liquidation, and was flat as compared to 2009, we should evidence no upside benefit to the birth-death model.

Now, let's check on new business startups, which is the "birth" part of the equation.

Here's an article which postulates that the average new business is hiring fewer employees now than in the past, which makes sense, as regulations and required filings have increased the small business burden while technology has allowed workers to be more productive. Add in the quest for outsourcing and you get the perfect scenario for new businesses not putting on as many employees as they used to, so when the BLS imputes the data for business births, they should consider that any new business will likely add fewer jobs than previously encountered.

On the positive side, the Ewing Marion Kaufmann Foundation reports that 2009 was a banner year for entrepreneurship, making the claim that, on average, 558,000 new businesses were started EACH MONTH in the year.

That is a monumental claim, postulating that 6,669,000 new businesses were formed in he year. Were that number even close to being true, the gains from new businesses should have almost completely eclipsed the losses from 2007-2008.

In contrast to the claims made by Kaufmann, which uses BLS data for baseline methodology, the WSJ posits that the number of new businesses fell by 24% in 2009, and 2008, though reportedly strong, was no banner year.

Outplacement firm Challenger, Gray and Christmas find that new business creation has fallen precipitously in the first half of 2010:

CHICAGO, July 19, 2010 – A new survey shows that start- up activity plummeted in the first half of 2010 as would-be entrepreneurs were either scooped up by employers or scared off by fragile economic conditions, a tight lending market and uncertainty over the sustainability of the recovery.

The Challenger study puts the figure at 3.7% of surveyed job-seekers, the lowest two-quarter average on record. The firm began collecting data in 1986.

The World Bank chimes in with a study of their own, stating:

We find that firm births contribute substantially to gross and net job creation. New firms tend to be small and thus the finding of a systematic inverse relationship between firm size and net growth rates is entirely attributable to most new firms being classified in small size classes.

Going back to the BLS birth/death charts, we note that in 2009, when business births were supposedly on the upswing, the BLS shows the model producing sizable gains in March, April and May, but then becoming pretty static for the remainder of the year. In 2010, the model number falls off a cliff in January, at -427,000, but then rebounds and posts gains in each proceeding month, eliminating and overshadowing the January losses.

In conclusion, there are simply too many numbers being thrown around in opposing directions for all of them to be right or to draw any conclusion except that the BLS birth/death model is structurally inconsistent, at times in opposition to competing data and more than likely employed to massage or move the overall non-farm payroll data month to month in whatever direction is politically palatable at the given moment.

Simply put, the birth/death model, on top of or imputed into raw estimates and seasonal adjustments, shrouds the entire non-farm payroll data in layers of stealthy and obscure adjustments.

Finally, here's a 2009 story from Bloomberg that screams, U.S. Job Losses May Be Even Larger, Model Breaks Down. That is about as close as one can come to saying that the government figures are useless and probably should not be trusted without actually saying it.

With the joyous news that August non-farm payrolls decreased by only 54,000 - beating expectations - stocks were off to the races, gapping once more at the open to lock in as many short sellers as possible. The markets maintained their positive bias throughout the remainder of the session, finishing close to their highs.

Investors looked past a terrible ISM Services index reading of 51.5 in August after showing 54.3 in July. Not surprisingly, bank stocks were among the leaders.

Dow 10,447.93, +127.83 (1.24%)
NASDAQ 2,233.75, +33.74 (1.53%)
S&P 500 1,104.51, +14.41 (1.32%)
NYSE Composite 7,055.03, +88.78 (1.27%)

Advancers clobbered declining issues, 4934-1488. New highs overwhelmed new lows, 415-49. Volume was non-existent, yet another signal that the rally is made on nothing but desire to trade, and is probably being directed by a small number of insiders.

NASDAQ Volume 1,512,487,250
NYSE Volume 4,127,134,500

Of the commodities we track, silver was the only winner, cementing a lengthy rally with a 28 cent gain, closing at 19.92. Gold slipped $2.30, to $1,249.20, while crude oil fell 42 cents, to $74.60.

It was quite a remarkable week for stocks. The Dow, which closed at 9985 just last Thursday, has managed a gain of 462 points in the last six sessions. There is likely more upside, though it may be limited in size and duration, as resistance begins around 10,600 on the Dow and 1125-35 on the S7P 500.

Enjoy the Labor Day holiday by not laboring. Get out and have some fun. Life is too short not to.

The Stock Market is Broken

Today's trading supplied more than sufficient evidence that the major stock exchanges in the United States are broken.

Following the release of the most important data in a month's time, the monthly US non-farm payroll report, futures fell, and so did stocks at the open, and with good reason.

The Bureau of Labor Statistics reported a July payroll decline of 131,000, mostly due - according to the completely inept and inefficient government - to layoffs of of thousands of census workers, though private sector payrolls were said to have increased by some 70,000.

Overall, it was an inexcusable report, with private payrolls even failing to meet the needed capacity to keep up with population growth. In normal, orderly markets, the Dow Jones Industrials would have declined some 200 to 300 points, possibly more, but, being that Wall Street and Washington are so completely corrupt and in cahoots, stocks only fell during the session, closing with what cannot even be called "modest" losses. The minuscule size of today's declines are not in proper proportion with economic reality.

The maximum the Dow was down on the day was 160 points, with the other indices generally in line. Thanks to a late-day rally which began precisely an hour and fifteen minutes before the markets were to close, stocks ended nearly flat.

An exceptional article by Jim Sinclair sums up the current condition rather succinctly.

Dow 10,653.56, -21.42 (0.20%)
NASDAQ 2,288.47, -4.59 (0.20%)
S&P 500 1,121.64, -4.17 (0.37%)
NYSE Composite 7,153.72, -20.55 (0.29%)

Decliners beat advancing issues, 3590-2804. New highs ramped past new lows, 347-127. Volume was once again on the sorry side of pathetic. Surely there was a great deal of arbitrage within particular stocks, mostly the volume leaders, which is where the hedge funds frolic these days. The overall tone of the market is one in which a few players are actually still interested. It is flat and lacking dynamism and liquidity, due to fail, though apparently not on any genuine bad news.

NASDAQ Volume 1,886,263,625
NYSE Volume 4,467,197,500

The commodity space was much more entertaining today than the equity markets. Oil fell $1.30, to $80.70, in line with the decimation of the US dollar. Gold gained a tidy $6.20, finishing the work-week at $1,203.40. Silver added 15 cents, to $18.46. There seems to be no stopping Forex traders from hammering the dollar versus other currencies. The greenback was slaughtered by the Euro and the Yen, in a nearly honest appreciation of the employment situation in the US.

For investment purposes, stocks should be almost completely shunned at the juncture. With a Fed meeting next week, some are hoping for action, in the form of more quantitative easing, or at least the announcement of such, in response to the horrible economic conditions within the US borders, though none is likely, and, even if it is, will only provide more cover for the clowns in suits who occupy the Fed, Treasury and all three branches of the federal government.

The United States is slowly being bled to death by a thousand paper cuts applied by the government-approved banking/financial cartel.

Markets which cannot properly respond to critical economic data are rouge casinos, not orderly mechanisms for the trade of investment vehicles.

To further illustrate how the stock market is not in sync with reality, bonds tumbled like dominoes. The 10-year yield, already closing in on historic lows, fell 8 basis points to 2.82%. The five-year yield, which only a month ago was 1.78%, fell today to 1.50%. These Treasury bond prices truly reflect the economic condition of a country without support other than that which it commands from within. Fear is writ large in the bond prices. Unless there is a sudden change in political thinking and practicality, the economy will continue to languish.

Summer Rally Lifts Stocks for Third Straight Session

Just a week ago, stocks appeared to have lost much of their appeal, as US economic data and problems in Europe prompted fears of a "double dip" (another recession) or slow growth for the United states and much of the developed world.

Apparently, not everybody got the memo, as this first week of the third quarter has traders snapping up stocks by the truckload. The major indices recorded their third straight day of gains, following seven sessions in negative territory. While concrete proof of better economic conditions have yet to be affirmed or even ascertained, traders have felt the need to dive headlong into stocks at a crucial juncture.

For chartists, one of many significant patterns developing right now is what's been termed the "death cross," wherein the 50-day moving average falls below the 200-day moving average. The last time this particular pattern occurred was at the very end of 2007, when (using the Dow Jones Industrials as a guide) the Dow failed to surpass the October, 2007 high of 14,164. Through the end of December, 2007, the Dow was trading in the low to mid-13,000s, but by the end of January the index had fallen to the low 12,000s range. Even though by June, the index had made its way back to 13,000, the 50-day MA remained below the 200-day, there was not enough commitment in the market to reverse the trend, and the subsequent crash in Autumn of 2008 finally dashed all of the bullish camp's hopes.

What is notable about the "death cross" is that it is not an insignificant event. As the market is normally an efficient discounting mechanism, the crossover of the two major moving averages correctly forecasts deteriorating economic conditions, though sharp rallies, bringing the averages back above the 50-day, and sometimes touching the 200-day, normally end in failure.

The key area of resistance at this juncture is two-fold, and that dichotomy bodes ill for the bulls. The first level is at the 200-day moving average, roughly at 10,300. A break above that level would be a boost for optimism, though the second level, at 11,200 - the height of the most recent rally and also the level at which the market broke down severely in 2008 - is more important. Failure to exceed the previous high can mean only one thing: stocks are overvalued and moving lower.

This entire panacea will likely take place over a lengthy time span of six to eight months before it is finally resolved, though there seems to be little doubt - from a technical point of view - that the bears will eventually feast upon overpriced securities, likely by November and almost surely by january 2011.

Not to put too much of a pessimistic tone on the delightful little three-day rally, but it's well-known that the averages never move in straight lines, sentiment can turn on a dime and there's no discernible difference between economic conditions today and those which prevailed for the prior eight weeks. Housing, unemployment and financial fears - not confined to just europen banks, but to US banks and the entire global financial system - will continue to pressure those on the long side of trades.

Chartists usually get it right, and while there are surely no guarantees, recent economic data suggests at least a slowdown in GDP growth from the first and second quarters of this year to the third and fourth. While individual names may report stellar earnings, the underlying data is signaling a tough time to grow profits and revenues.

Despite the glowing headline numbers, today's trade was a disaster in a number of ways. First, the galloping gain of the morning were nearly completely vaporized by noontime, and, second, most of the day's gains (80 points on the Dow) were achieved in the final hour. There's a good deal of buying going on, but there's surely no dearth of selling, either. The rub is that institutions may very well have been unloading stocks midday, forcing another bout of short-covering at the tail end of the session. It was a very sloppy-looking chart.

Dow 10,138.99, +120.71 (1.20%)
NASDAQ 2,175.40, +15.93 (0.74%)
S&P 500 1,070.25, +9.98 (0.94%)
NYSE Composite 6,755.81, +70.03 (1.05%)

Advancers dominated declining issues, 4658-1738 (nearly 3:1), and new highs surpassed new lows, 145-84, breaking a streak of seven straight days of wins for new lows. Volume was below par.

NASDAQ Volume 1,958,669,750
NYSE Volume 5,208,361,000

Oil gained again, now eraing most of the declines from the prior two weeks, higher by $1.37, to $75.44. It's doubtful that oil can or will break out of this $70-80 range any time soon, unless there's a serious disruption in production or demand falls off a cliff - unlikely during the busy summer months.

Metals were little changed, with gold dipping $2.80, to $1,195.80, and silver losing 13 cents, down to $17.85.

The most relevant stat for the day came prior to the open, when initial unemployment claims were estimated at 454,000, down from the previous week's total of 475,000. A good many analysts saw this as a positive, though the reality of the situation must be viewed in a larger, longer context. Using a simple round figure of 450,000 initial claims a week, that would extrapolate to over 23 million claims in a year, or a turnover of roughly 30 percent of the total workforce.

With jobs scarce, that kind of turnover is simply not supportable from available data, insinuating that the weekly claims numbers are very faulty and probably disguising an even-worse employment condition than many believe exists. The government's own non-farm payroll actually put unemployment at 9.5% in June, down from 9.8% in May, even though the number of jobs created was a negative. Clearly, the response was that the workforce had shrunk, as many longer-term unemployed entered the ranks of "discouraged," and thus, not counted.

It's a complete fallacy to believe that employment is in anything but a disastrous state of affairs and that the official numbers are masking the truth. The real unemployment rate, or U-6, which captures underemployed workers and those completely discouraged and without benefits, at 16.6%, another government statistic probably undervalued by 5-10%.

Of course, the employment condition is only part of the story, but a large part, as it also impacts retail sales and housing in major ways. Anyone who believes we're out of the woods just because the stock market rallies for a few days might just ask a few of their unemployed neighbors how they feel about things.