Monday, November 1, 2010

Morning Update/ Market Thread 11/1/10

Good Morning,

It’s a Monday, so it’s safe to assume that equity futures are higher (eye rolls). It’s also a POMO day (double eye roll). And speaking of intervention in the markets, the Japanese tried their Yen manipulation trick again last night, only this time it lasted all of about 5 minutes – another large spike that just melted as it was quickly laughed off by the markets. The dollar was down but has bounced back to even, bonds are up significantly, oil is higher and gold is flat.

It’s going to be a wild, wild week for certain as tomorrow is Election Day and we’ll be getting a flavor for the new political composition by Wednesday when the Fed will take the opportunity to QE the population to death, a hidden tax on all our earnings and savings. Then on Friday we’ll get the Employment Report for October.

The consensus for the Employment Report, by the way, is calling for +60,000 jobs despite a -95,000 print last month. That sounds overly optimistic to me, but of course if it misses it’ll mean QE3, right? … and so it must be good because the bankers are getting their way. For now, because there is no one there to stop them – no adults. And that’s exactly why the Democrats are going to give up power. The people are looking for adult leadership, but they will be woefully let down once again because both parties are simply extensions of the central banks who finance their campaigns.

Tired of the record number of political ads? You can thank the recent supreme court ruling for that which made corporations super human in terms of being able to “speak freely” with their money. This was dumb as a bag of rocks, as giving a business entity human protections under the law, is like giving a stone those same rights, and this insanity is cloaked under the Constitution and fed to people as being the right thing to do. And thus the people will pay the price for their apathy, they will wind up living in a corporate ruled state as we already do. The real question mark about the elections for me is if the new composition will pushback against the stimulus and bailouts.

Meanwhile Personal Income fell during the month of September, while Personal Outlays increased .2% which is a deceleration from the prior .4%. Personal Income fell to -.1% from the prior positive .5%, a miss from the consensus who was expecting .3% - here’s Econoday:
The consumer sector softened in September on both the income and spending facets. Personal income in September slipped 0.1 percent, following a 0.4 percent boost in August. The headline number came in noticeably below the market consensus for a 0.3 percent gain. Weakness was led by a sharp drop in government unemployment insurance benefits. Also, the wages & salaries component was unchanged, following a 0.2 percent rise in August.

While income growth dipped, spending remained positive. Personal spending rose 0.2 percent, following a 0.5 percent jump in August. The September number fell short of market forecasts for a 0.4 percent gain. By components, durables jumped 0.7 percent, nondurables rose 0.1 percent, and services edged up 0.1 percent.

PCE inflation eased at both the headline and core levels. The PCE price index firmed only 0.1 percent in September after rising 0.2 percent in August. The core rate came in at flat after nudging up 0.1 percent in August. Analysts projected a 0.1 percent rise for September.

Clearly, the consumer sector decelerated in August but part-emphasis on part-of the slowing may be related to coming off strong numbers in August. But without a doubt, the government sector is a negative in terms of wages and unemployment benefits.

Anytime the government takes their foot off the gas even a little the numbers plummet. Incomes going down against a background of Fed induced commodity price manipulation is a very dangerous thing for our nation – it’s already way out of hand.

The Manufacturing ISM and Construction Spending are released at 10 Eastern this morning.

So, what’s going to happen this week in regards to market action? Of course much depends on the manipulation announced by the “Fed.” The markets are way overbought, and yet everyone now expects a sell the news event. The most likely wave count I’ve seen suggests that there could be one more wave higher – perhaps we get a spike higher? I would tend to think that any further movement higher presents a good short opportunity, but we may not get it and front-running turns isn’t a smart play in my book.

The markets are going to come apart when the central bankers are pushed. I’m hearing a lot of talk about their fraud from states and from investors who bought their garbage – that’s where the real pushback is coming from, not from the pansy-assed politicians nor the sold out mainstream media. What that pushback is really all about is the unraveling of their fraud. The fraud is still hidden by even more accounting fraud. But like all Ponzi Schemes, the banks cannot keep the game going forever because eventually they run out of willing suckers – take a look at the diminishing volume in the markets, same thing.

So it’s an extraordinarily dangerous time all the way around, the general population is only partially aware of the dangers that are present. The McClellan Oscillator remains in negative territory telling us that the majority of stocks are currently in downtrends – this, of course, is a divergence against generally rising price, one of many.

Several people have asked me to express an opinion in terms of the election and how to vote… My very cynical take is that at this juncture in history it doesn’t matter how you vote because you are presented with no choice whatsoever. Your choices are between candidates and issues that are all defined by the debt money corporate world in which we now live. Your vote will not change that. It will not change the fact that the central bankers have the real power… the power of money creation. But in general, a message can be sent by removing those who have voted in favor of TARP and in favor of the latest insurance subsidy scheme cloaked as a “healthcare” bill. The more pushback against the banks and their financing schemes the better. By the way, the unions are NOT the cause of the ills of our economy! The seemingly excess they may currently possess is a byproduct of the credit bubble blown by the banks! It is the WHO controls our money that is at the root of all the SYMPTOMS. If you wish to cure the disease, you do not treat the symptoms, you treat the root of the problem.

And thus to me our democracy is broken beyond the ability of the ballot to fix it. Real change will occur when votes are cast with something other than a ballot box.