- Historic Short Squeeze, Biggest In 3 Years, Sends Small-Caps Soaring; Dow Tops 17,000 (ZeroHedge, Oct 28, 2014):
n a strangely familiar case of deja vu all over again, stocks surged (alone in the cross-asset class world of economic reality) on the day before an FOMC statement. The Russell 2000 has had its best 10-day run in 3 years, best day of the year, and managed to scramble back to its 100- & 200-day moving-average. Dow 17,000 was another key technical level that was achieved. S&P 500 was levitated on volume around 40% below average into the green for October. VIX was banged under 15 and tracked stocks. Away from the equity-vol complex, asset-classes were unimpressed – HY credit, bonds, JPY, and the USD all diverged from stocks. USD weakened slightly, and commodities all gained on the day. TSY yields were up 2-3bps and HY closed practically unchanged. “Most shorted” stocks rose almost 3% – the biggest squeeze since Dec 2011 – smashing the Russell 2000 higher.
- Dow Drops 1500 Points In 3 Weeks, Nasdaq Enters ‘Correction’ As VIX Breaks 30 (ZeroHedge, Oct 15, 2014):
From 17,350 intraday highs “proving the recovery is here,” we are 1500 points down just 3 weeks later. The Nasdaq just fell 10.5% from its highs, officially in correction. VIX broke above 30. Perhaps, just perhaps, the gap to fundamentals is finally about to be filled… Continue reading »
- The DJIA Stock Market Index Is A Hoax (The Burning Platform, March 29, 2014):
The Dow Jones Industrial Average (DJIA) Index is the only stock market index that covers both the second and the third industrial revolution. Calculating share indexes such as the Dow Jones Industrial Average and showing this index in a historical graph is a useful way to show which phase the industrial revolution is in. Changes in the DJIA shares basket, changes in the formula and stock splits during the take-off phase and acceleration phase of industrial revolutions are perfect transition-indicators. The similarities of these indicators during the last two revolutions are fascinating, but also a reason for concern. In fact the graph of the DJIA is a classic example of fictional truth, a hoax.
- Is the Stock Market Repeating the 1929 Run Up to the Great Depression? (ZeroHedge, Feb 12, 2014):
Chart courtesy of Tom McClellan of the McClellan Market Report (via Mark Hulbert)
Hulbert notes that the chart “has been making the rounds on Wall Street.”
On the other hand, Martin Armstrong predicts that a worsening economy – and bank deposit confiscation – in Europe will cause people to flood into American stocks as a “safe haven” for a couple of years.
And the Fed has more or less admitted that propping up the stock market is a top priority.
And now back to reality:
- Unemployment rate falls to five-year low of 7% as 203,000 jobs added; Dow soars 199 points (NY Daily News, Dec 6, 2013):
Employers were hard at work hiring in November, signaling the labor market’s gradual healing continues.
U.S. payrolls expanded by 203,000, the Labor Department reported on Friday, a total well above the gain of 180,000 economists had forecast.
The jobless rate, meanwhile, dropped to a five-year low of 7.0%. It had been expected to tick down to 7.2% from 7.3% in October.
The report also showed about 8,000 more jobs were added to payrolls in September and October than previously thought.
Stocks shot sharply higher on the news, snapping a five-session losing streak. The Dow rocketed nearly 200 points, or 1.3% higher, to close at 16,020.
- Forget The Debt Ceiling, The Dow Just Breached 15,000 (To The Downside)(ZeroHedge, Oct 3, 2013):
The Dow is down for the 9th day of the last 11 since the exuberant Un-Taper spike in stocks. Crucially though, it appears the government’s efforts to fear-monger equity markets into forcing action by the House Republicans is working. The all-important Dow 15,000 level has been breached to the downside and represents a much more important “economic” breach than the debt ceiling to any and every talking head it would seem…
- Dow Jones At New All Time Highs – Here’s Why (ZeroHedge, April 9, 2013):
Curious why the Dow Jones Industrial Average just hit new all time highs? Here’s a partial list of recent economic events:
- Markit US PMI Miss
- ISM Manufacturing Miss
- ISM New York Miss
- Vehicle Sales Miss
- ADP Employment Miss
- ISM Services Miss
- Challenger Job Cuts Miss
- Initial Claims Miss
- Trade Balance Beat
- Non-Farm Payrolls Miss
- Hourly Earnings Miss
- NFIB Small Business Miss
- Wholesale Inventories Miss
And that’s ignoring the absolute economic collapse in Europe, the Chinese slowdown, and the Japanese economic basketcase.
What is there to even say anymore: Stalingrad 4 Eva! Remember: central planning works.
and if pictures are better than words…
- So Much For The Stability Of The Centrally-Banked “Fiat” Era (ZeroHedge, April 1, 2013):
According to some economist PhDs, the end of the gold standard era marked by the arrival of the Federal Reserve one century ago ushered in the era of stability, prosperity and virtually unlimited growth (just ignore the two world wars and millions of casualties immediately following). While that is an amusing way of describing a financial system that is now daily on the brink of a financial apocalypse courtesy of a few good central banks propping up a $1 quadrillion house of derivatives cards, whose collapse would mean an immediate “game over”, and where (rapidly evaporating) confidence in a failing status quo, must be preserved at all costs, the question of post-Fed induced stability is an interesting one, especially when measured in terms of intangible value (in this case the most basic of indicators – the Dow Jones), compared to thousands of years of a real tangible, store of wealth: gold. In the chart below, courtesy of Cambridge House, we ask readers: in which period was there a more stable relationship between tangible and intangible values, and a less exuberant irrationality vis-a-vis that which is purely based on confidence, if not so much reality.
A second logical follow up question is: where is this ratio of intangible to tangible value going next? The chart below attempts to provide some log-based perspective on precisely this.
- 1936 Redux – It’s Really Never Different This Time (ZeroHedge, March 14, 2013):
While chart analogs provide optically pleasing (and often far too shockingly correct) indications of the human herd tendencies towards fear and greed, a glance through the headlines and reporting of prior periods can provide just as much of a concerning ‘analog’ as any chart. In this case, while a picture can paint a thousand words; a thousand words may also paint the biggest picture of all. It seems, socially and empirically, it is never different this time as these 1936 Wall Street Journal archives read only too well… from devaluations lifting stocks to inflationary side-effects of money flow and from short-covering, money-on-the-sidelines, Jobs, Europe, low-volume ramps, BTFD, and profit-taking, to brokers advising stocks for the long-run before a 40% decline.Things look eerily similar eh?
But when we look at the headlines in the Wall Street Journal from mid 1936 to mid 1937 as the market topped out (orange oval), dipped, was bought back, then collapsed 40% in 3 months, nothing ever changes…
Government Bailouts Repaid – Bullish Implications…
N.Y. Central Has Repaid All Government Loans
The Wall Street Journal, 978 words
Dec 1, 1936
WASHINGTON Numerous railroad developments here yesterday were climaxed by the announcement of RFC Chairman Jesse H. Jones that New York Central had repaid all of its government loans, totaling $16,858,950, most of which was not due until 1941. Continue reading »
- Foodstamp Recipients Hit Record, Alongside Record Dow Jones And Record Debt: 20% Of Eligible Americans On EBT (ZeroHedge, March 11, 2013):
Record Dow Jones, record US debt ($16,701,846,937,879.74), and now, once more, record number of Americans on foodstamps. According to the USDA, an all time high of 47,791,966 Americans closed 2012 in possession of the highly desired Electronic Benefits Transfer (EBT) card, managed by who else but JPMorgan. And with a civilian non-institutional population of 244.4 million in December, this means that a record 19.56% of eligible Americans are on Foodstamps. In December an additional 109,924 Americans became reliant on foodstamps for their poverty-level needs, bringing the total to 47.8 million.
Number of US households on foodstamps: also a record of 23.1 million, with the average monthly benefit of $277.09. Continue reading »
- Reality Check: The Dow Jones Industrial Average vs. Bananas (Sovereign Man, March 8, 2013):
Reporting from Santiago, Chile
The Dow Jones Industrial Average, one of the key benchmarks of the US stock market, has soundly surpassed its all-time high. And most of the investing world is toasting their collective success and celebrating the recovery.
It’s a funny thing, really. Most investors only think in terms of ‘nominal’ numbers, i.e. Dow 14,000+ is 40% higher than Dow 10,000 (back in November 2009). But few think in terms of ‘real’ numbers… inflation-adjusted averages.
Everyone knows that inflation exists. We can all look back on prices from the past and realize instantly how much more expensive things have become. Conversely, though, most people don’t think about the stock market like this.
The reality is, though, that when you adjust for inflation, the Dow is well below its highs from over a decade ago. Continue reading »
- The Last Time The Dow Was Here… (ZeroHedge, March 5, 2013):
“Mission Accomplished” - With CNBC now lost for countdown-able targets (though 20,000 is so close), we leave it to none other than Jim Cramer to sum up where we stand (oh and the following list of remarkable then-and-now macro, micro, and market variables): “we all know it’s going to end badly, but in the meantime we can make some money” – ZH translation: “just make sure to sell ahead of everyone else.”
- Dow Jones Industrial Average: Then 14164.5; Now 14164.5
- GDP Growth: Then +2.5%; Now +1.6%
- Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
- Labor Force Particpation Rate: Then 65.8%; Now 63.6%
- Americans On Food Stamps: Then 26.9 million; Now 47.69 million
- Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
- US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
- US Deficit (LTM): Then $97 billion; Now $975.6 billion
- Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
- US Household Debt: Then $13.5 trillion; Now 12.87 trillion
- Consumer Confidence: Then 99.5; Now 69.6
- S&P Rating: Then AAA; Now AA+
- VIX: Then 17.5%; Now 14%
- 10 Year Treasury Yield: Then 4.64%; Now 1.89%
- EURUSD: Then 1.4145; Now 1.3050
- Gold: Then $748; Now $1583
- NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares
- JPM’s Tom Lee Announces His Dow Jones Industrial Average Price Target: 20,000 (ZeroHedge, Jan 28, 2013):
Back in July 2008, just before all hell broke loose and the S&P was trading in the upper 1,200s, everyone’s favorite permabull, JPM strategist famously reiterated his S&P 500 price target for the end of 2012: 1450. Two months later Lehman filed for bankruptcy, and 4 months later the S&P closed 2008 some 40% lower than said price target. Another two months later and anyone who had listened to Tom Lee lost 50% of their investment.
Today, as the Fed’s balance sheet crosses $3 trillion, and the global central banks have pumped a total of some $15 trillion into the markets, Tom Lee ws back on CNBC with what is his most permabullish prediction ever: he now expects the S&P to generate some 150 in earnings to which he applies a 17x multiple. His conclusion “If you put a 17 multiple on $150, the S&P really sort of peaks around 2,400 or 2,500.” In Dow terms, this means a Dow Jones Industrial Average of, drumroll, 20000. He does, caveat it, however: “that’s obviously 4 years away.” And if Tom Lee was off by 40% in 4 months, we can’t help but wonder what the hit rate on his 4 year prediction will be, and if, by using the same ruler extrapolation mechanism he applies to corporate earnings nand multiples one extrapolates the Fed’s balance sheet at some $7 trillion in 4 years, what a loaf of bread will cost just as the DJIA crosses 20,000. For future humor purposes, it may be useful to bookmark this post.
- Dow Jones Industrial Average Celebrates “Four More Years” With Biggest Drop In A Year (ZeroHedge, Nov 7, 2012):
It seems like only last night everyone was celebrating more hope, if not much change. Now comes the hangover. The Dow Jones intraday drop is now 2.23% (and rising), greater than the biggest drop so far in 2012 record on June 1. The last time the market plunged as much: literally one year ago, or November 9, 2011. Sadly, it appears that one can’t have their Dow Jones Industrial Average and redistribute it too.
And if the surge in vol the last time we had moves of this magnitude is any indication, we can solmenly say that the world’s most overrated job for the next 2 months (and 4 years) will be the Chief Redemption Officer, at any hedge fund.
and the S&P futures are at a critical level…below Draghi’s Elbow… Continue reading »
- Mike Krieger Topples The Last Domino (ZeroHedge, Oct 12, 2012):
Whenever you find yourself on the side of the majority, it is time to pause and reflect.
- Mark Twain
I think we’re being run by maniacs for maniacal ends and I think I’m liable to be put away as insane for expressing that.
- John Lennon (watch the video of Lennon actually saying it here)
We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.
- Abraham Lincoln
The Last Domino
With the U.S. Presidential election less than one month away, I think it’s a good time to take stock on what has occurred in 2012 so far and look forward to the period ahead, which I think will be one of increasing social and economic chaos in the United States. Continue reading »
- Next Stop: Dow 100,000 (ZeroHedge, May 15, 2012):
We thought that Jeremy Siegel, Laszlo “the Ruler” Birinyi and Jim Altucher were optimistic with their stock market targets. Sadly, with their equal to or less than 20,000 Dow Jones predictions, the three merely come off as rank amateurs, especially when compared to the forecast of BNP’s head of fixed income Philippe Gijesels, who sees the stock market at 100,000 at some point over the next 25 years. However, unlike the previous trio who bases its forecasts on misguided expectations of economic growth, Gijesels may actually end up being right, because his estimate is predicated on one simple thing: hyperinflation, or specifically 12.2% inflation each year, which for a country like America is tantamount to the dreaded H-word. The other premise used by Gijesels: too much debt which has to be inflated. And actually, he is spot on. The only problem is that when the Dow hits 100,000 due to money printing, which is his underlying thesis, one will needed scientific notation to express the price of any hard asset (and most certainly gold), because if America falls in a two-decade long Weimar republic phase, the Dow may well be 100,000 or 100 googol – the truth is it won’t matter as the money this number translated to would be absolutely meaningless. Just ask the Weimar Germans, who may have had some tremendous monthly increases in their 401(k) statements, but all they really cared about is whether they had the latest and most fashionable wheelbarrow model.
Tags: Barack Obama, Debt, Dow Jones, Economy, Fed, Federal Reserve, Gold, Government, Hyperinflation, Inflation, Obama administration, Politics, Quantitative Easing, Society, Stock Market, U.S., Weimar Republic