Expect a plunge at the opening this morning. Wearing Depends might help if you haven’t followed our ‘flee paper assets’ lead – thinking you’d ‘make some back’. Ha!. Although we get a couple of meaningful economic numbers to ponder this week, such as the Producer Price Index, which ought to be up around the top of tomorrow’s report, along with housing starts, the real question is what will happen to the stock market, since Robin Landry’s latest outlook for colleagues of his in the professional investment world looks decidedly glum, ponders whether 9,200 on the Dow will hold. It’s available for Peoplenomics subscribers.
The main question revolves around whether the market has met the minimums for completion of the 4th wave ‘bounce’ (yes) and if the market could begin its major decline from here (yes, again), then where are the critical support areas? The answer: About 9,200 on the Dow. A couple of days under that and…well, like I said about the Depends….
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The fact that we had the sixth largest bank failure in U.S. history this weekend (Colonial) might be blamed by some pundits for the drop in commodity prices today. BB&T which was on the receiving end of this shotgun marriage is now going to the markets to raise $750-million, which I expect will keep our friends there up to their behinds in overtime. Ain’t it great being on a salary, huh?.
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I trust you also noticed that oil dropped under $67 a barrel in Asia? One view is that the recovery may not be as robust as all the hype would have led the unaware to expect – but no worries about that around here, since my skepticism of the ‘recovery’ and ‘green shoots’ has been matched only by my belief in the mythical ‘free lunch’ and the ‘Easter Bunny.’
So barring a major change in the way modern HF (out of control) economics works out, I would expect today’s action to be initially to the downside. Forget all the hoopla: The gold and silver gang occasionally gets beat up and bloodied at mid-month to scare the longs away. Headlines like “Gold hits 2-eeek low as rick aversion lifts dollar” might make it seem as though there’s a little sanity left, but only so long as you put out of your mind the fact that the Fed is buying Treasuries to keep the whole game of musical chairs going.
Could we see a running of the shorts this week? yes, it’s possible, but from what levels? I’ve decided NOT to play the game because catching falling knives is the financial equivalent of playing on a freeway on a dark and foggy night. Instead, we’ll be putting in more investment grade diesel and working on the house. And if it ever co9ols down, so I can work outside at something less than 100-degree temps, we’ll get back to gardening, since local Master Gardener types have given us some ideas on fire ant control. They’re just too small to pick off one-by-one with the .22.
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Another factor which will weigh on the market is the closure of city government in Chicago today. Although fire and police are still working, non-essential services are closed in the wake of the Windy City’s budget blow-out, I wonder if parking tickets will still be handed out? In all, the partial closure today, the Friday after Thanksgiving, and Christmas Eve day will save about $8.3 million.
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There’s a headline in the Financial Times (UK) recently that summed everything up neatly. They call this “A rally with troubling aspects.” Oh, you mean like the 700 price/earnings ratio that the David Rosenberg of Gluskin/Sheff noticed a while back? Yeah, I guess that would qualify as ‘troubling’.
With a little bit of money in gold & silver, a bit in treasuries, and focusing on buying useable goods for future use, you should be able to understand why this week’s Peoplenomics report was titled ‘Popcorn at the Train Wreck’.
Healthscare Review
If a review of the financial markets doesn’t have you grabbing for a double dose of Prozac this morning, watching the healthscare debate may add a bit of comic relief. Why, there’s so much plain old ‘noise’ around this it’s like watching the Keystone Cops. One Texas democorp says a healthscare bill ‘without a public option would be very, very difficult‘ to pass. Republicorp Dick Armey “predicted that supporters of reform would attempt to win over the “bed-wetters caucus”
Not that the issue isn’t global, however. The incoming head of the Canadian Medical Association says that country’s healthcare system is imploding, too.
With Health & Human Services Secretary Kathleen Sebelius saying that a government run option isn’t essential, I expect this will drag out longer than the TV series Dallas…and leaving us all speculating as to what happened long after the final episode.
The way I have it figured is this:
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Whatever happens, it will cost more federal dollars and that will be an excuse to raise taxes.
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Whatever happens will be watered down by lobbyists in ways that will defend the current paradigm of dollars for healthcare.
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Concurrently, we will see the swine flu hysteria whipped up as a justification despite the headlines like “Swine flu jab link to killer nerve disease: Leaked letter reveals concern of neurologists over 25 deaths in America.“
Can’t have an omelet without a few broken eggs, huh? I have to wonder if the CEO’s of these pharmanical jabbers are taking the same modified-after-trials-are-complete version of the flu vaccine, or if they are taking them at all?
Better question: How come the press hasn’t asked this obvious question of top brass of the pharmacorps? Did any of them volunteer their kids for trials? Volunteered their wives or husbands? I doubt it…but I’d love to learn otherwise.
Mexican Army at Our Border
The story about how the Mexican Army has taken over customs work at the border this weekend in what’s billed as a campaign to root out corruption might seem like a good thing. But, with an army at our border, am I being overly nervous about the sanctity of the border line?
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You see where “Mexico cartels go from drugs to full-scale mafias”? Next thing you know, they will become governments….oh, you say they are already?
Shakin’
Remember the mention from the HalfPastHuman predictive linguistics reports about how we were going to have so many good-sized earthquakes this summer that counting them would be meaningless? 30 + quakes of 5.0 or larger in the past seven days according to the USGS page this morning. Five of those were over 6.0. Busy shaking time with a 6.4 shaker this morning in Japan.
Thar They Blows
The named storms may have been really late showing up this year, but boy, are they making up for lost time. We have Tropical Storm Claudette coming ashore in Florida and our first hurricane of the year is named “Bill.”
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We could use a little rain over here in Texas if you get tired of ‘em in Florida. I’ll pay for the FedEx charges if you can figure out how to pack it.
Texas Politics
I notice where Senator Kay Bailey Hutchinson is running for governor here in Texas. I wonder she’s thought about Rick Perry’s operating leases of publicly paid for highways to foreign corporations as an issue? Or, the constantly resurfacing NAFTA /TransTexas corridor that keeps popping up?
Axis of Missiles
The headline that Japanese intelligence figures that “Secret Syrian-Iranian-NKorean missile-test fails, kills 20 Syrians” is a bad bit of news. North Korea apparently has nuclear weapons technology, and to be married up with the folks in Iran and Syria…well, a little disconcerting since we have that October 25th date range coming up in about 70-days, or so.
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Meantime Kim Jong Il is planning to ease border restrictions…and might that not push gold down toward the ‘last train out $700 level” wonders a reader? Good question. I won’t be selling…I’ll be buying more if it does.
