Friday, July 17, 2009

Morning Update/ Market Thread 7/17

Good Morning,

Equity futures are down overnight while long bond futures are down sharply:

This, despite the fact that Bank of America “earned” $3.22 billion in the Second Quarter and Citi “earned” a “surprise” $4.3 billion based, it claimed on the sale of Smith Barney. Is there any wonder why they were pressuring Congress and the FASB to allow mark to fantasy? There’s your answer in how they handled that. I personally think earning these billions is good for the bastards. I hope they give themselves GIANT sized bonuses that they so obviously deserve for being the biggest crooks in the history of the planet by a factor of about a thousand, that way the people of the U.S. just might get angry enough to put the SOB’s behind bars where they deserve. I’ve said it a hundred times, but I’ll keep on saying it… corporations and their money must be separated from government.

Trumped up earnings and robbery in the financial space is one thing, real profits from a real economy are absolutely another.

Here’s the latest greenshoot to suck the sheeple in… housing starts. I’m going to present Econopray’s latest spin, but keep your eye on that year over year number which is still horrific:
Housing starts in June came in unexpectedly strong, continuing a robust gain the month before and indicating that we may have passed the bottom in housing. Starts increased 3.6 percent, following a huge 17.3 percent spike in May. The June pace of 0.582 million units annualized was down 46.0 percent year-on-year and came in well above the market forecast for 0.530 million units. The boost in June was led by the single-family component which advanced 14.4 percent after rising 5.9 percent the month before. However, the multifamily component gave back some of May's surge, falling 25.8 percent after a very strong 65.9 percent boost the month before.

By region, the June gain in starts was led by a monthly 33.3 percent jump in the Midwest, followed by a 28.6 percent boost in the Northeast. The West and South declined 14.8 percent and 1.4 percent, respectively.

Importantly, permits posted a healthy increase, indicating that the strength in starts over the last two months may not be that much weather related. Permits came in with an 8.7 percent increase in June, following a moderate 4.0 percent rise in May. The June pace for permits at 0.563 million units annualized was down 52.0 percent on a year-ago basis.

Today's report shows unexpected improvement in housing and we have another indicator suggesting that we are getting closer to the end of the overall recession. Equities should like the numbers and bond yields should firm.

Anyone calling bottom on a two month bounce when an indicator has COLLAPSED 46% in the past year is certifiably nuts – especially when that timeframe is its seasonal peak. And I’ll take it further and state that there is just simply too much inventory available and building more new homes into a still oversupplied market is an economic negative, not positive.

Housing Happiness

Welcome the mass psychosis of wave c up of B up. I guess to celebrate the banks robbing us blind we all run to our broker and buy stocks instead of running for the pitchforks and rope!

Talk about being overbought! 100% of DOW stocks are above their 5 day moving average. The DOW closed above it’s upper Bollinger band on lower volume with an oversold daily stochastic and RSI, with everything on the shorter timeframes extremely overbought.

I care not, that’s because I’m heading out ASAP this morning to go riding through the hills of Idaho and western Montana for a few days. Trust me, I need it, but hope you enjoy another Options Expiration day of manipulation and billion dollar profits for the criminals who are “running Wall Street.” Of course by that I mean those who are robbing Americans of their money and of their futures.

Have a good day and weekend, I’ll be back most likely on Tuesday. If I get to civilization at some point I’ll make a quick post, otherwise it’ll be the early part of next week.


Styx – Suite Madame Blue (America Patriotic):