Thursday, March 24, 2011

Morning Update/ Market Thread 3/24

Good Morning,

Equity futures are higher this morning with the dollar down, the Yen spookily quiet ever since G7 intervention was announced, bonds down, oil is higher and just about to break to new highs, gold closed yesterday at a new all-time closing high and is higher this morning, silver is running to new record highs now just under $38 an ounce, and food commodities are also rising.

There was a very small change in the McClellan Oscillator yesterday, thus we can expect a large move in price today or tomorrow.

The SPX has now clearly broken out of its down channel which means that the prior wave 4 count is probably incorrect. McHugh is thinking this to be a wave 2, but we’ll have to see as it’s not a definitive read for me at this point. The 50dma is at 1303 and is acting as resistance for now:

Speaking of McHugh, I want to share a snippet of his from his recent update regarding the housing industry – it is a good summary of the recent data:
It is time to get real. The fact is, we are now in a housing market depression. Almost every economic recovery in this nation's history has been started by the housing industry. That is not happening at this time. Just the opposite, Housing is disintegrating into the Great Housing Depression. Check out these numbers: First of all, housing prices have fallen 26 percent since their peak a few years ago, the largest price decline ever in our nation, worse than what occurred during the Great Depression of the 1930's. We just learned this week that New Home Sales fell 17 percent month over month in February 2011 versus January 2011. The gross number of New Home Sales in February 2011 annualizes to 250,000, which is the worst on record, ever. This number is less than half the number of sales in 1963, which saw 560,000 New Home sales - but with 120 million fewer people then than now live in the U.S. Think about that. February's number is abysmal. Families dependent upon the Housing Industry are headed for economic ruination. The construction industry is going to see a ton of small builders go belly up. When we consider the February 250,000 sales figure, we need to understand that 700,000 annual sales is normal for a healthy economy. Up to this point, the worst sales year ever still had 323,000 New Home sales. This February figure is dreadful. Banks have tightened lending standards, making it so difficult to qualify for a mortgage that a third of all sales are now 100 percent cash deals. In other words, a third of all sales are occurring without a bank. Collateral values are sinking. Short sales are rising. This is a spiraling black hole of coming economic devastation, a contagion that will spread throughout the entire economy (except of course the protected Wall Street folks, who get to enjoy the Fed's fraud on America, taking all the liquidity the Fed can print and trading markets with the printed cash for self-gain, a corruption right up there with Nero fiddling while Rome burned). Existing Home Sales were no better, falling 10 percent in February, with prices plunging on existing homes that get sold. All the above will contribute toward significant increases in the value of precious metals as folks flock to a financial instrument that has no counterparty, is real and physical, and not subject to corporate mismanagement.

Yep, that about sums it up. Entirely different read than you get from the mainstream and shills whose livelihood depends upon you being a sucker.

Weekly unemployment claims fell by a paltry 3,000 in the prior week, falling from 385,000 to 382,000 with 385k the consensus. Remember, it requires readings below 350k to give an indication that jobs are actually being created. Here’s econospin shilling away:
Fewer and fewer Americans are claiming unemployment benefits in a developing trend that will boost expectations for accelerating payroll growth. Initial jobless claims fell 5,000 in the March 19 week to 382,000 (prior week revised to 387,000). The four-week average edged lower to 385,250 to show a more than 15,000 month-ago improvement. These are the best readings of the recovery.

Continuing claims are also posting the best readings of the recovery, down 2,000 to 3.721 million in data for the March 12 week. The four-week average of 3.755 million shows a nearly 150,000 month-ago improvement. A total of 8.766 million claimed unemployment benefits in data for the March 5 week, an improvement of more than 187,000 from the prior week.

Another week, another revision higher, and another opportunity to make the false claim that the number fell further than it actually did (from what was originally reported – remember, you must compare apples to apples and the media does not do that, and always in the direction that makes the economy somehow look better than it actually is). There are still 3.6 million people drawing Emergency Unemployment, and that rose by 85,712 in the past week.

While we’re on the subject of Unemployment benefits, I have been reading several articles lately about how states are looking at cutting back benefits, both in terms of the duration and amount of benefits. The truth is that this program went bankrupt and that the Treasury has been covering up the insolvency of the program – thus ultimately requiring more false money from the “Fed” to keep the anti-revolution program going.

Durable Goods Orders fell by .9% in the month of February, against a consensus looking for a positive 1.7%. This comes, if you recall, on the heals of a 2.7% print in January due solely to aircraft orders (and mostly from .gov). Here’s a surprised Econoday:
Today's durables report is a quandary relative to all of the good news in earlier released manufacturing surveys. New durables orders were unexpectedly down and with just over half of the major industries declining for the month. Overall durables orders in February dipped 0.9 percent, following a revised 3.6 percent rebound in January (previously estimated at up 3.2 percent). Excluding transportation, new orders for durable goods decreased 0.6 percent after a 3.0 percent drop in January.

Transportation led February's drop, slipping 1.9 percent after a huge 29.6 percent jump in January. The decrease was primarily due to an 18.4 percent fall in defense aircraft orders. On the positive side within transportation, motor vehicles rose 1.9 percent while nondefense aircraft & parts increased 26.7 percent.

Outside of transportation, the numbers were mixed. Declines were seen in primary metals, down 2.1 percent; machinery, down 4.2 percent; and in "other," down 0.6 percent. Gains were seen in fabricated metals, up 2.1 percent; computers & electronic parts, up 0.6 percent; and in electrical equipment, up 2.6 percent.

Business investment in equipment has softened after strength late last year. Nondefense capital goods orders excluding aircraft in February decreased 1.3 percent, following a 6.0 percent drop the month before. Shipments for this series edged back up 0.8 percent, following a 2.3 percent fall in January.

The durables orders series is one of the most volatile that there is on a monthly basis and that may be the focus of analysts as the worst-than-expected number was outweighed by a marginally lower-than-forecast number for initial jobless claims. On the news, equity futures edged up on the jobless claims.

LOL, the bull flows nonstop. Always a reason to justify the movement in stock prices – never understanding for a second how fully captured the markets are and how they have been taken over by HFT computers and hot money. Durable goods are measured in dollars. We don’t manufacture much, so when a multi-billion dollar aircraft order is processed, it causes the data to swing wildly. The only reason this data was positive in January was due to aircraft orders from the government – how sustainable is that? And they act surprised.

Of course the government has no money to buy anything, much less new aircraft. Thus the debt is simply piled high nonstop while the REAL interest expense explodes causing the “Fed” to have to spend trillions to artificially keep rates down. And as they spend, confidence in our “money” wanes, and gee, silver at new record highs, gold at new record highs, oil to the moon, and food prices that result in starvation for those around the globe who are on the margins. It’s a great system of never ending “growth,” brought to you by you know WHO.

This morning the media is downplaying the radiation hazard in Japan, now stating that Tokyo water is safe once again to drink for infants as the measured amount of radioactive iodine has fallen to “acceptable” levels. Uh no thanks. It’s what they aren’t telling you that is most significant. What concerns me most is not only the radioactive iodine or even the cesium particles, but what I would really like to know is where the Plutonium particles are going. Once you understand that ingesting these particles is far worse than simply having them in the environment, then you’ll understand that the numbers being bandied about in the media are meaningless as being in a contaminated area makes it nearly impossible not to ingest those particles.

My heart truly goes out to those still in Japan… the wealthy, of course, are long gone leaving the rest to suffer the effects. And it’s shocking how the governments of the world, including ours, are failing to step in and demand that containment become the top priority! Finally, there was evidence admitted to yesterday that the reactors were probably breached, but they still won’t come out and say it in plain language. Meanwhile radiation continues to pour from those devastated plants, with some estimating that the amount of cesium released into the atmosphere now exceeds that of the Chernobyl disaster. Let’s face it, there is FAR more material here than in Chernobyl. These particles are lethal, and this disaster is being totally downplayed.

The following link takes you to a must read interview of a worker who helped to “liquidate” a town nearby Chernobyl – she is one of the few surviving workers, her thyroid gone, the description of what she went through is shocking and the cover-up/ denial sounds awfully familiar. I think everyone in Japan needs to read her account, and if you live anywhere near that region, you needed to be gone a long time ago:

Chernobyl Cleanup Survivor's Message for Japan: 'Run Away as Quickly as Possible'

What message do you have for Japan?
Run away as quickly as possible. Don't wait. Save yourself and don't rely on the government because the government lies. They don't want you to know the truth because the nuclear industry is so powerful.

That is a message I truly hope the people of Japan act upon – I know that it’s hard, but the enemy is completely invisible and the effects are insidious over time. Humanity should be screaming out to evacuate the citizens of Japan, and we should be screaming to get busy with containment NOW.

Again, this is not happening because we are letting a special interest manage the disaster in their own self-interest, not in humanity’s self-interest.

And what's happening in Tokyo, one of the world's most "advanced" cities? Shelves are empty, just like that:

Oh yeah, the Portuguese government basically collapsed yesterday over the government’s proposed austerity measures. They are headed directly to the same circumstance of Iceland, Ireland, and Greece – that is the loans of “salvation” are coming. And the pressures of debt stream like the river Nile, and no one seems powerful enough to just say “NO” to the pushers of this most toxic drug.