Wednesday, May 4, 2011

Morning Update/ Market Thread 5/4 - Dollar Approaching All-Time Lows Edition…

Good Morning,

Hey, when you can’t be good, at least look good, right? That would be the theme for the United States as the only way to add still more fluff into the markets is to just keep adding more fluff and to never stop.

Equities were lower overnight, that is until the dollar fell out of bed once again and now equities are up slightly. The dollar now back into the 72.7ish range is in the area of support where it’s all time lows are located:

Oil is slightly higher on this action, gold is higher, but the silver take down continues for now. Importantly, food commodities remain extremely elevated in mixed action today.

The rise in the cost of living is becoming glaringly apparent to almost everyone. Here in Washington State the State Ferry System just raised rates 35%. Talking to my son last night he was telling me that the cost of driver’s education for beginning drivers has doubled from the $250 we paid about 6 years ago to now $500 for the beginning driver course! This was free and taught in school when I learned to drive.

Are incomes keeping up with the dollar devaluation? Absolutely not. And that’s why the fantasy of inflating away debt will remain a fantasy forever. That’s because the system created by the narcissistic bankers benefits only them and not everyone else. That’s exactly why you saw the focus of the bailout attention on them and not on your family. And it’s why you see margin hikes on silver, but not on oil or food. It has everything to do with WHO controls the production of your money… A broken record, I know.

Of course stocks can’t go down while there is literally billions being poured into the banks… right? That is definitely the consensus as this chart of Rydex Bull/Bear sentiment shows an extreme in bullish sentiment never before seen:

Historic bullishness should be screaming at you… but then again I can hear the whir (roar) of Bernanke’s computer cooling fans.

The conflicted and hypocritical Mortgage Banker’s Association Purchase Index rose in the past week by .3% compared to a 13.6% plunge the week before. It’s spring and sales are expected to increase, but numbers like this certainly don’t point to any recovering for housing. Here’s Econopray:
After four very volatile up-and-down weeks, the Mortgage Bankers Association's purchase index was steady in the April 29 week with a 0.3 percent gain. This index has been too wild to offer much of a handle on April, an important month for housing. Rates are an increasing plus, reflected in a 6.0 percent rise for the refinancing index. Thirty-year fixed loans averaged 4.76 percent in the week, down four basis points.

This index is volatile and “too wild” because the MBA intentionally broke it. They are nothing but narcissistic shills attempting to warp your perception of reality – now go and take another Prozac.

The Challenger Job-Cut Report is indicating fewer mass layoffs for April, falling from March’s 41,528 to 36,490. Keep in mind that this report only tracks announced corporate layoffs and does not include layoffs in the governmental sector which is exactly where the latest rounds of layoffs are occurring.

The mostly worthless ADP Employment Report came in much lower than expected at their guess of 179,000 jobs created. Of course this report is notorious for being wrong or at least out of synch with the BLS. Still, knuckleheads in the fantasy fluff world of trumped up markets use this data point to “set expectations,” which is code for “manipulate the market and set you up to take your money with our HFT machines and insider information later down the road.”

Yep, I’m just a little bit skeptical of the whole charade, and I am finding it harder and harder to take the markets or world events at face value. Let’s face it… you can’t unswallow the red pill.