Bear Mountain Bull

On Thursday this week.

Thanks to Mat for getting us started in the comments section. I see we have a couple more ‘entries’ from Illinois:

First State Bank of Winchester, Winchester IL
John Warner Bank, Clinton IL

Let’s make it a trio from the Land of Obama Lincoln:
Rock River Bank, Oregon IL

Hmm. Looks like some real ‘fireworks’ this week. So far, it’s a six-pack, five from Illinois:
Millennium State Bank of Texas, Dallas TX
First National Bank of Danville, Danville IL
Elizabeth State Bank, Elizabeth IL

Wow. Seven, six from Illinois. Were they saving theirs up or what?
Founders Bank, Worth IL

Those groups we said looked vulnerable a couple of days ago broke down today — energy and defense:

Other areas to watch for signs of more trouble: steel/metals, chemicals, financials, REITs, housing and retail:

Charts courtesy of StockCharts.com

The late wrap — a rather interesting day, very uncharacteristic of a pre-holiday session. Stocks started weak, never caught much of a bid at all, and sagged into the close:

Internals were negative. Volume was still light, but not as light as the usual holiday, and was nearly even with yesterday on the Nasdaq. Advances/declines were 1 to 5 on both exchanges, with up/down volume 1 to 15 on the NYSE and 1 to 6 on the Nasdaq. New highs/lows were 16/5 on the NYSE and 13/10 on the Nasdaq.

When the day’s ‘leaders’ are all red, you know it wasn’t a good day:
Leaders — Defense (-0.10%), Semis (-1.15%), Airlines (-1.90%), Internet (-2.19%), Software (-2.19%), Health Care (-2.31%), Paper (-2.32%), Health Care Products (-2.40%)
Laggards — REITs (-5.46%), HMOs (-4.97%), Oil Services (-4.57%), Natural Gas (-4.19%), Retailers (-3.83%), Hospitals (-3.69%), Oil (-3.67%), Homebuilders (-3.48%)

Treasury Yields — 6-Month: .29%,  2-Year: .98%,  5-Year: 2.42%,  10-Year: 3.49%,  30-Year: 4.32%

Energy Prices — Crude oil: $66.73/barrel,  Gasoline: $1.7908/gallon,  Natural Gas: $3.615/mmBTU

US Dollar Index — 80.297

Precious Metals — Gold: $928.80/ounce,  Silver: $13.35/ounce,  Platinum: $1183.00/ounce

BMB Note:  
The magnitude of the move down today is fairly surprising — makes you wonder if the bears might actually start to gain some traction here soon. Today’s breakdowns in energy and defense, are not good news, and breakdowns are being threatened in the financials, housing and retail as well.

If you’re still long, make sure you’re honoring your stops. We will continue to look for opportunities on the short side.

For those here in the states, have a safe and enjoyable 4th of July holiday. We’ll have our usual weekend fare here at BMB, so feel free to drop by.

We already know the media is biased. I guess they figure that they may as well make it official, and make some money off of it. Now their bias will be for sale:

For $25,000 to $250,000, The Washington Post has offered lobbyists and association executives off-the-record, nonconfrontational access to “those powerful few”: Obama administration officials, members of Congress, and — at first — even the paper’s own reporters and editors.

The astonishing offer was detailed in a flier circulated Wednesday to a health care lobbyist, who provided it to a reporter because the lobbyist said he felt it was a conflict for the paper to charge for access to, as the flier says, its “health care reporting and editorial staff.”

With the newsroom in an uproar after POLITICO reported the solicitation, Executive Editor Marcus Brauchli said this morning that he was “appalled” by the plan and said the newsroom will not participate.

“It suggests that access to Washington Post journalists was available for purchase,” Brauchli told The Post’s media reporter, Howard Kurtz. The proposal “promises we would suspend our usual skeptical questioning because it appears to offer, in exchange for sponsorships, the good name of The Washington Post.”

Bill King via The Big Picture:

The WSJ: Wall Street Pay Approaches 2007’s Records Will Ben, Hank, Little Timmy and Congressional leaders explain to the American people how it is possible for Wall Street to have near record remuneration AFTER the US taxpayers were put on the hook for about $12 trillion of guarantees to The Street? And will they explain to Americans that while Street insiders ‘earn’ record pay they must suffer a severe recession or depression, possibly record future inflation, collapsing home values, job losses and an income contraction?

—

More from Zero Hedge on Government Sachs: Is Goldman Legally Frontrunning Its Clients?
Everyone who is anyone on Wall Street has at some point used the Goldman 360 portal whether for research, news, keeping a track of prime brokerage portfolio or, disturbingly, for trading, via the REDI Plus 9.0 platform (now loaded with enhanced algo trading features to make life for you, dear soon to be frontran Goldman client, so much easier). A second widely accepted Wall Street concept is that a disclaimer is the last thing that anyone reads, if ever. Yet after taking a close look at the Goldman disclaimer for the 360 portal, which is an umbrella waiver or all downstream websites, including REDI, one discovers the following gem:

Monitoring by GS: Your use of the products and services on this Web site may be monitored by GS, and that the resultant information may be used by GS for its internal business purposes or in accordance with the rules of any applicable regulatory or self-regulatory organization.

One second: by using Goldman 360 a client voluntarily allows Goldman to provide keystroke by keystroke data of everything the client does, even if that includes launching trades via REDI, to Goldman for the internal business purposes. The third thing everyone on Wall Street agrees on is that “internal business purposes” usually (and in Goldman’s case, almost exclusively) means proprietary trading.

—

Bloomberg News: JP Morgan Raises Credit Card Monthly Minimum Payments [Thanks for the bailout; here’s your lovely parting gift, Mr. & Ms. Taxpayer.]  Citibank has already hiked credit card rates. The cost of credit is increasing for consumers. Is this how recoveries start? Is this a sign that the worst is over?

For those that believe any of the government numbers: NFP down 467,000 in June, unemployment rate ticked up to 9.5%.

…and the recession will go away.

From Americablog:

For the umpteenth time, CNBC is declaring an end to the recession. That’s right, we’ve turned the corner again. For those following CNBC we’ve turned so many corners that some might say we’re going in circles. In the minds of the Wall Street cheerleaders, a few positive signs are enough to stand up and say “mission accomplished” and start promoting the next run. It’s really cute and the new varsity letter that CNBC will receive from Wall Street will surely look nice but there’s a lot more reason for concern than celebration these days.

This ongoing theory that the economy is can be magically improved with a few smiles is ridiculous. Absolutely, the market can be moved with sentiment but to cherry pick a few small positive points and overlook the fact that the banks were on life-support a few months ago is quite a stretch. They are only alive because of massive government intervention and the pumped up numbers by a few may not last. The market needs more than a smile to move forward in any meaningful way.

I think not. All this spin is just a bunch of BM-BS.

From Yahoo:

U.S. car and truck sales showed signs of stabilizing in June after a year of sharp declines, but every major automaker except Honda Motor Co. reported lower sales than in May.

From The Big Picture:

Auto sales for June:

• Ford Motor smaller-than-expected 11%;
• Chrysler Group 42% decline;
• General Motors slipped by 33.4%
• Toyota Motor reported a 32% drop;
• Honda Motor slid almost 30%;
• Nissan reported U.S. sales fell 23%;
• Hyundai reported an 18%;
• Volkswagen sales fell 18%;
• BMW June U.S. Sales Down 20.3%
• Mercedes-Benz sales fell 22.6%

Note that June had 25 selling days, one more than a year ago.

I wonder if these writers would be saying that their paychecks were ’stabilizing’ if they were falling 30% YOY.

We’re from the gov’t, and we’re here to help you stay underwater…

And they call it the “Home Affordable Refinance” program.

Feds to refinance mortgages up to 125 percent of value

Bizarre action in the REITs. They’ve been trading all over the place for weeks, even months. Then, suddenly, we see very narrow range bars to the upside 9 of the past 10 days.

Charts courtesy of StockCharts.com

At Calculated Risk.

6. Will my financial institution honor a registered warrant?
Recipients of registered warrants should contact their financial institution to determine whether they will honor the registered warrant before the redemption date.

7. What happens if my financial institution will not accept the registered warrant?
You may decide to open an account at another financial institution that will accept registered warrants, or you will have to hold the warrant until it matures on October 1, 2009.

Yeesh.

Stocks made another mad dash up this morning, with the indices hitting their highs in the second hour of trading. They held near those levels for a couple of hours before starting to slide, and by closing time, had given up more than half of the initial gains.

Internals were positive, but volume looks to be lighter. Advances/declines were 3 to 1 on the NYSE and 2 to 1 on the Nasdaq, with up/down volume 13 to 7 on the NYSE and 7 to 3 on the Nasdaq. New highs/lows were 38/0 on the NYSE and 39/5 on the Nasdaq.

Leaders — Gold/Silver (+3.82%), Hospitals (+2.79%), Airlines (+1.94%), Insurance (+1.94%), Disk Drives (+1.70%), Network (+1.67%), Semis (+1.47%), HMOs (+1.45%)
Laggards — Biotechs (-1.42%), Steel (-1.03%), Banks (-0.71%), Retailers (-0.29%), Oil Services (-0.19%), Natural Gas (-0.14%), Defense (-0.10%), Health Care Products (-0.07%)

Treasury Yields — 6-Month: .31%,  2-Year: 1.05%,  5-Year: 2.51%,  10-Year: 3.54%,  30-Year: 4.34%

Crude took a big intraday dive after a morning pop:
Energy Prices — Crude oil: $69.31/barrel,  Gasoline: $1.8590/gallon,  Natural Gas: $3.795/mmBTU

US Dollar Index — 79.641

Precious Metals — Gold: $940.30/ounce,  Silver: $13.70/ounce,  Platinum: $1199.00/ounce

BMB Note:  
Let’s get this holiday stuff over with. Tomorrow promises to be a real snoozer — that is, unless the morning jobs number shakes things up. We’ll find out in the morning.

Zero Hedge has an interesting video of Joe Saluzzi from Themis Trading on Bloomberg yesterday, discussing the current market and the predominance of ‘high frequency’ trading.

ZH quotes Saluzzi:

“I have a feeling one day the door is gonna close, everyone is going to be running for the exits, there is going to be a major move in the market and everyone is going to wonder “what happened?”

There is problem structurally in the equity markets that nobody wants to talk about. There is intervention, there is manipulation going on. No one has exact proof of what is going on but it’s out there, and the real liquidity has been gone for a while. People don’t understand, the liquidity is not coming back.”

Apostrophe Abuse.

Link via Instapundit.

From Michael Kahn:

Never before have I seen so many polar opposite forecasts as I am seeing now. I agree with people with whom I never agree (or respect, in some cases) and I disagree with people with whom I usually agree (and respect a lot). But then again, not all of them on both sides.

—

What the deal? Who knows? Nobody knows but that is no excuse for investment paralysis. I called it “retreating into an investment cocoon” on another website. Do your homework, follow some respected analyst’s analysis (but make your own conclusions) and then control risk.

As was mentioned in a previous post, it really is all about money management - make your bed and lie in it and control the heck out of risk. A good trader can make money no matter what portfolio he is given because he will cut the crap out right away and let the correct decisions ride. Trite but true.

Steve Nison, aka Mr. Candlesticks, likes to push a trading triad - Eastern Technicals, Western Technicals and Money Management. Everyone knows how to buy but few really master the art of selling.

From Frank Barbera tonight at Financial Sense:

While we would love to try and see the ‘silver lining’ in today’s economy, at the moment, it is very hard to see which sectors of the economy are going to lead the US out of the current economic malaise. A close examination of any number of economic reports shows that without the help of government spending, most of the data ex-Uncle Sam is still scraping along the bottom or in decline. While it is true that in the past employment has been a lagging indicator, it is also true that going forward it is hard to see where new employment will come from on a scale needed to turn a global contraction back into global growth. In addition, President Obama’s “Cap and Trade” Bill looms as a giant new energy tax, something that is hard to see will help struggling businesses at the current time.

—

The question for the US now becomes — if growth does not return, will foreign capital continue to flow toward the US markets, or will foreign capital slow its pace of investment? Without even contemplating what would happen if capital starts to withdraw for US markets, even a mere slowing in the flow of foreign capital could easily send US interest rates sharply higher, and if the US economy can not turn the corner now with record low rates, then what will happen once the entire yield curve begins to shift upward across the maturity spectrum? In my view, a funding crisis could well be the next major event, characterized by a weakening Dollar and surging US interest rates, forcing Uncle Sam to issue even more debt as the rate of interest on debt rolling over continues to soar. By comparison to the recent crisis seen in 2008, a funding crisis that questions the quality of U.S. government debt will make everything that came before it look like child’s play with huge additional downside risks to both Real Estate and Equity markets. For now, the sun is still shining on the equity markets, but at these levels the equity markets are fully priced for a reasonable recovery, and if the months ahead show more dismal news and an economic relapse, then the equity markets could come under fire all over again. For now, conservative investors should be in a defensive posture and should only be looking to perhaps trade into the market on a set of major oversold conditions, conditions which at the present time have yet to be seen.

…our ‘leadership’ becomes.

GOP’s Coleman concedes, sending Franken to Senate

Al Franken in the Senate. I already thought they were a bunch of clowns. This just confirms it.

Call it what you’d like: a lack of momentum, a trading range, sideways chop. The S&P hasn’t gone anywhere in eight weeks.

Amongst the groups, defense, chemicals and energy still look vulnerable:

Charts courtesy of StockCharts.com

Zzzzzzzzzzzzzz. I sure do hate these holiday trading weeks.

The market made its move in the morning, and then shut down at lunch for the remainder of the day. Well, and worked its way a little higher into the close, but by now, that goes without saying.

Internals were negative, and volume was up a bit from yesterday. Advances/declines were about 8 to 11 on both exchanges, with up/down volume 3 to 7 on the NYSE and 2 to 3 on the Nasdaq. New highs/lows were 27/4 on the NYSE and 31/4 on the Nasdaq.

Leaders — Paper (+4.04%), REITs (+0.64%), Comp. Hardware (+0.50%), Disk Drives (+0.38%), Semis (+0.09%), Software (-0.03%), Defense (-0.05%), Insurance (-0.06%)
Laggards — Gold/Silver (-3.22%), Hospitals (-2.39%), Metals (-2.24%), Steel (-1.87%), Airlines (-1.56%), Oil Services (-1.47%), Banks (-1.46%), Commodities (-1.35%)

Treasury Yields — 6-Month: .35%,  2-Year: 1.11%,  5-Year: 2.54%,  10-Year: 3.52%,  30-Year: 4.32%

Energy Prices — Crude oil: $69.89/barrel,  Gasoline: $1.8972/gallon,  Natural Gas: $3.835/mmBTU

US Dollar Index — 80.126

Precious Metals — Gold: $926.90/ounce,  Silver: $13.51/ounce,  Platinum: $1175.00/ounce

BMB Note:   I’ll be glad when this week is over. At least I think I will be.

As if there was any in the first place…

So much for any hopes of knowing any more of what’s going on in the markets anymore, and who’s behind it.

As ZH puts it:

In an information memorandum released on June 24 (09-31), the NYSE Regulation team has announced the Decommissioning of the Daily Program Trading Report (DPTR).

—

Basically this is the beginning of the end of unmodified data transparency. Going forward the NYSE will provide whatever data it feels comfortable, after sufficient internal “audits,” and media outlets such as Zero Hedge, which had presented its millions of readers the only data point about Goldman’s complete encroachment of not only NYSE but Program Trading, will be henceforth unreliable and likely will present no useful information at all.

This is a travesty, as well as a complete obliteration and a mockery of the move for transparency that the Administration, Regulators and Exchanges have been posturing they support.

Make sure that the big players in the casino — the ones that are there to do the gov’ts bidding and fleece the little guys along the way — are able to stay behind the two-way mirror, and cannot be seen.

It’s getting to be time for us little people to just give up and walk away — and let the big guys just trade amongst themselves.

Update:   The NYSE responds.

Prime mortgage delinquencies more than double YOY.

Consumer confidence slips, surprising all the ‘green shooters’.

Home prices drop 18 percent YOY. But ‘less bad’ is the new ‘good’:

There is a clear trend home prices declines are moderating — another sign the beleaguered housing market is stabilizing, according to data released Tuesday.

While the Standard & Poor’s/Case-Shiller index of 20 major cities tumbled by 18.1 percent, it marked the third straight month the decline was not a record. And yearly losses in 13 metros improved compared to March.

So an 18 percent decline is a sign of stabilization. That’s news to me. Here’s that old psychology/sentiment thing again. When home prices were first declining at an 18 percent rate, the world was ending. Now that they’re declining at only 18 percent, down from a 19 percent record (in a data series that’s less than 10 years old), people are cheering.

Not much earth-shattering stuff out there from what I can tell. Maybe you guys can dig up something interesting.

Here’s an open thread for submissions, and anything else that’s on your mind.

There ain’t no way the recession is over — if Dennis Kneale is saying it is.

From Peter Navarro:

Short Takes

1. Last week’s attempt to deify Fed chairman Ben Bernanke turn my stomach. From the pundits and politicians to sages like Warren Buffett, what all of these Bernanke apologists forget is that whatever steps Bernanke might’ve taken to “get us out of the mess,” Bernanke had a huge role to play in getting us into the mess to begin with. His easy money policies helped fuel a housing bubble at the same time that these policies debased the dollar and killed the European economy and ultimately harmed our export growth. At a critical time, Bernanke ironically was also slow to cut interest rates as the 2007 recession neared.

2. While Bernanke should be fired, there’s no way in hell Larry Summers should be his replacement. Any damn fool or defrocked Harvard president can spend his way out of an economic crisis but it takes a calm clear head to resist that siren song and Summers is incapable of that. That’s why my vote would go to Martin Feldstein — Summers’ onetime mentor and one of the few people who might be able to lead us back to the promised land of prosperity.

3. To my good friends in pundit land, when you’re talking about how the American savings rate is rapidly rising, please remember that the savings rate is a bogus statistic. It only includes wage income. When savings rates were “low” during both the housing and tech bubbles, people were making capital gains hand over fist so that their effective savings rate was actually probably higher.

4. “Cap and Trade” is flat out stupid. If you legitimately want to address the carbon issue, the best way to do it is with a carbon tax that also includes a carbon tax on any goods imported into the United States. By taxing imports into the US, you solve the problem of China and India not wanting to play the global warming solution game.

And yes, any solution to the global warming problem will raise the price of fuel and electricity in every kind of energy we use. If global warming is real, the cost of solving that problem will be a reduction in the income levels and lifestyles of everybody that lives on the planet. Ergo, we have a big decision to make.

Using current economic conditions as an excuse not to make that decision is almost as bad as implementing a “cap and trade policy” that won’t reduce emissions and will simply line the pockets of whoever is smart enough to game the system. This is just one more chapter in the “Obama promised us smarter government that seems to be incapable of delivering it” book.

A piece running in Rolling Stone magazine — “From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they’re about to do it again”