06/20/2012 Live Update

[Mr. T]

I don't understand why there was so much strength in the last hour.

Bulls didn't get what they wanted today...... or what they had priced in..... far from it.

[OverUnder]

XIV EOD daily candles. Shorts better get a crying towel. Fed was very bullish and market did a fakeout. Remember the last fed when the market went up 2 more full days after? Strap in.

[KeiZai]

Vix formed bullish hammer...wish me luck, lottery ticket bought

[MrMiyagi]

Vix formed bullish hammer...wish me luck, lottery ticket bought

If tomorrow is green then I would expect Friday to be down hard as per NYMO history.

[KeiZai]

Vix formed bullish hammer...wish me luck, lottery ticket bought

If tomorrow is green then I would expect Friday to be down hard as per NYMO history.

yes definitely! thanks master

[gator11]

how about equities rally because capital starts to realize that debt is the problem.Capital has been flowing into gov debt at an alarming rate for 30yrs. At some point that money will start to flow out and where is it going to go? It wouldnt take much of that money flowing from debt to equity to really make the markets move. After all no government since the history of time has ever paid back its debt except for Romania in 1980 and it was highly deflationary. JM2C

The reporters keep pushing him on QE = and each time the market jumps.......

Once he doesn't say anything it drops back down.

It's building one helluva flag as it happens. Does Benny have an ear piece in?

Hahahah, that Foo just blamed weather on possible job growth problems....

What an idiot!!!!

That actually explains everything - Ben watches the weather man and makes his projections based off that.

"There's a Storm Coming!!! Print Print Print!!!!!"

For those who are unfamiliar with why we are so long-term screwed, John Hussman cogently explained in 3 pages the mistake Bernake was making when QE2 affirmed his ignorance of economics. As opposed to Bernanke, he actually manages his own money and takes that of his clients quite seriously:

http://www.hussmanfunds.com/wmc/wmc101025.htm

Keynes was not wrong on everything and is misinterpreted on much while Milton Friedman gets accolades he does not deserve. Greenspan? Throw a hood on him and he looks like the Emperor in Star Wars and is just as corrupt a man.

"There is the possibility... that after the rate of interest has fallen to a certain level, liquidity preference is virtually absolute in the sense that almost everyone prefers cash to holding a debt at so low a rate of interest. In this event, the monetary authority would have lost effective control."


Just consider this: The SPX high in October of 2007 was 1576. We have been elevated to 1422. The high of any market, by sheer logical deduction, is over-priced. That said, what have we now that we did not have in 2007?

1- A severe housing drop to even a depression, depending upon where you live
2- Unemployment was at 4.5 and is now easily over 10% when you put all the people in and don't use creative accounting, and over 15% when you consider those 25% or more who are under-employed for their skills as the jobs left for overseas or the firms went bust
3- Interest rates at zero, but few qualify (except what we now call a banks to run HFTs), and few want the money
4- A federal deficit that doesn't need to be stated and its growth is why we did not have -2% GDP last year
5- A net outflow of illegals as even they can't find jobs
6- "Banks" that run two sets of books because under varying parts of The National Security Act, in times of distress virtually anything can be done to ensure the continuity of the economy and the government (and I don't disagree other than the money has built oligarchs causing Pravda to congratulate Obama)
7- Municipalities with 35-50% of holdings in stocks and pension projections based upon 4-6% growth per year

The above, and more, will be listed in Economics 101 books in 20 years as to the reasons the market eventually went the route of Japan. We don't belong anywhere near this market valuation. Buying back shares and laying off people for better P/.E numbers is not bullish. But it is being widely done for bonuses predicated on those numbers.

After reading, "Confessions of an Economic Hit man" I realized how corrupt the US government is with the banking system and how with South America wising up, the only ones who could be institutionally raped was, as George Carlin put it, was all of us.

One thing for certain that HFTs do is they rally mkts because then the screens light-up to money managers saying "this looks hot....throw some money into it". And the commodity mkts have been begging the CFTC to demand the machines be turned off as commercial consumers and producers can't use the markets to hedge with this kind of volatility they are seeing.

BONUS QUESTION: Can anyone tell me the stated reason why the markets even exist? There is genuinely a reason and it is not speculation.
John Maynard Keynes, The General Theory

[MrMiyagi]

[SWalsh]

how about equities rally because capital starts to realize that debt is the problem.Capital has been flowing into gov debt at an alarming rate for 30yrs. At some point that money will start to flow out and where is it going to go? It wouldnt take much of that money flowing from debt to equity to really make the markets move. After all no government since the history of time has ever paid back its debt except for Romania in 1980 and it was highly deflationary. JM2C

Well that is exactly why we have had this rally. Brokers tell people that the only way to make any money is to take "a little risk" and leave their money in stocks, yet they are net sellers and institutions are only buying for retirement plans and municipalities for diversification.

Money does not flow out of US debt and into companies with no guarantee of surviving a bank holiday and commercial paper markets dry-up as they did in 2008.

While anything can happen, I don't see that scenario as being in the room, let alone on the table. The US Dollar and bonds are backed, as Alfred Malabre (WSJ editor) wrote 25 years ago in "Beyond Our Means", by thermonuclear weapons. We are going to exist or nothing will. Companies cannot make that guarantee.

The market is higher on The Greater Fool Theory. Those points I made are not reversing anytime soon.

[Mr. T]

Just wait a day or two - once the muppets understand there's no helicopters on the way...... we'll go down.

Just wait overnight for Merkel to start fighting someone on something and put the whole Euro into question again...... then we'll go down in flames.

Notice the Muppets get to wait until the damage is done and the market is dropping before they get to try and sell.
That's why they're called "retails" = they buy at retail and sell on clearance.

[SWalsh]

That's why they're called "retails" = they buy at retail and sell on clearance.

Great point....I never heard it put that way.

Look at the rally from June 23 to July 7, 2011. I read that $76 billion was quietly put into the banks to fuel that rally and it was the largest amount since 2008. When it stopped, see what happened? (I knew that you could). This mkt is pure fascism. And if someone thinks that's crazy they should study Mussolini, who FDR was enamored with because of his economic policies, and this government-industry cabal that could be Krups, et al, of Nazi Germany, where over 100 US and 50 UK bankers worked to make the firms operate at peak performance DURING the war. They were collected and shuffled out prior to Nuremberg. All a nation needs are fanatics, psychotics. lunatics, true believers, and greedy people to do exactly what we are doing now when laws are worthless. Think we have a shortage? They litter DC.

This looks like an a-b-c up and the move at the bottom was, IMO, broken as the top should be called a failure at 1414 on May Day (throw the commie leader a bone). So it might be revealed months down the line that all this HFT bidding that turned the mkt, which Arrested Development refuses to comprehend, was none other than like 1929. The Fed didn't buy stocks then, it just lent as much money as they wanted to borrow.

Speaking of "Muppets", I guess Benny is The Count.

[SWalsh]

XIV EOD daily candles. Shorts better get a crying towel. Fed was very bullish and market did a fakeout. Remember the last fed when the market went up 2 more full days after? Strap in.

Yeah, Fed was very specific and very bullish. That's why we closed unchanged.

What do you think this is, a Yahoo board?

"Shorts better get a crying towel" right...because your market calls are so good that you merely watch T-Bills roll over and look at the market for amusement.