Friday, November 12, 2010

Morning Update/ Market Thread 11/12

Good Morning,

Equity futures are lower again this morning, selling began after the close yesterday on another report that wasn’t so good, this time it was Disney (DIS). The dollar, however, is down this morning with the Euro up, bonds are down again, and oil, gold, and most food commodities are also lower.

Just wait until they get a kick in the rear by the new POMO schedule. The new POMOs on average are twice as big, and they are happening nearly every day – 19 of the next 20 trading days will have POMO operations. Does that scare you? It should. Its outright thievery of your money, as each money printing operation robs you of your purchasing power.

And note that on non-POMO days, like yesterday, that the selling continues and it continues on volume. Below is a daily chart of the DOW that I captured just after the open this morning. Note the higher volume yesterday despite it being Veteran’s Day. But also note that the current uptrend has yet to be broken here like it has been in the NDX, this morning it is resting right on the uptrend line - OH POMO, PLEASE SAVE US! (lol)

Volumes were lower elsewhere, a lot of the DOW volume was related to the massive selling in CSCO:

So, what you are seeing is pressure, both revenue pressure and margin compression. This is a result of a debt saturated economy at the base, and the pushing of hot money on top. The hot money isn’t used to pay down debt, it’s used to speculate around the globe, running up the price of commodities. Higher commodity price equals higher input costs for businesses who were inappropriately building inventory due to bad signals given off by the “Fed” and their bad data. Now we’re seeing the effects in a few stocks – it’s showing up in Dean Foods, in Campbell Soups, in Cisco, and now Disney. This will continue to bleed from one company to the next.

In the meantime, bonds yields are moving higher with prices moving lower – especially on the long end of the curve. Borrowing costs should be higher, but debt saturated government, business, and populace cannot handle higher rates – especially the government who has borrowed short – they MUST keep the short end low.

Of course the entire process of the government of the people borrowing money from private banks, which they make from thin air, and paying them interest on it is so ridiculous a concept as to make the mind boggle in the fact that this practice is accepted by the people who must labor to pay for that nonsense. In effect the citizens of this country labor just for the “privilege” to use the money system – a system that does not belong to the banks, it belongs to the people!

The people were sold out by Congress – plain and simple.

And that’s why any solution presented to help “solve” our debt saturation problem is either tax more or spend less. WHAT NONSENSE!

Let’s see, Consumer Sentiment is released at 9:55 this morning – color me pissed off, frustrated, and amazed at the stupidity of it all. But most of all, color me ashamed that we have failed to stand up for ourselves.

But just like a Stockholm Syndrome captive, we were spooned “Hope” and “Change” and so we simply voted for the latest incompetent child-minded puppet whose morals drift like a willow in the wind. The wind being the breeze of passing trillions in paper confetti we call dollars but will one day call toilet paper.

Meanwhile over in Europe CDS for the PIIGS has blown out to new all-time highs. Yet the Euro is higher compared to the dollar – what’s that tell you? Problems in Europe are the same as they are here, they were created by the same people in the exact same manner.

And since those debt pushing problem creators are running up commodities to uncomforting levels, they must then turn around and attempt to put out their own fires. First it was changing margin requirements on silver, yesterday it was raising margin requirements on Sugar, cocoa, coffee, and cotton. These changing requirements are STEP TWO OF PRICE CONTROLS. Step one being to prop the price higher to create inflation – but oops, not that much. And yet that’s not enough inflation, so we’re going to throw $110 billion a month on top. Look for new margin requirements soon on Gold, and don’t be surprised to see outright price controls on things like gasoline in the future as the “Fed” attempts to manage every facet of the economy. Sure, like they can set prices for everything, like any of this has anything at all to do with the real problem in the first place – absolutely nuts.

And the stinky turds still swirling in the toilet bowl of foreclosuregate have a special smell indeed. What a mess, and the smell I’m getting is that the administration is going to attempt to sweep it all under the carpet. If they do, forget the rule of law – it will be a free-for-all as if it isn’t already.

Bring on the Revolution – I’m ready.