Archive - Oct 22, 2013

While Cramer exclaimed this morning that his 'cult' stocks were unstoppable, the MoMo names were crushed today (for no good reason) with NFLX, FB, P (late saved by AAPL), and TSLA all monkey-hammered (as rumors of a major option algo going pear-shaped spread). Meanwhile, the S&P rose for the 9th day of the last 10 and closed once again at another all-time high above another magical level - 1750. Markets keyed off the weakness in the jobs report (ignoring the construction spending beat) and ran in a Taper-off-related manner across all assets - USD was battered, Bond yields compressed, Gold and silver soared. Oil prices did not follow the pattern leaking to $97.60 (-3% on the week). Market internals today were very "glitchy" though... EURJPY was in charge once again but VIX remains bid (and higher on the day), and while credit rallied, it remains less exuberant than stocks.

For the first time (in the 44 years of polling), the majority of Americans favor legalizing marijuana. As Gallup notes, from a low of 12% in favor in 1969, the latest poll shows a clear majority (58%) now believe the drug should be made legal. Perhaps not so surprising, given the prospects for much of today's youth (67% of 18 to 29 year olds in favor), Gallup adds that a sizable percentage of Americans (38%) this year admitted to having tried the drug, which may be a contributing factor to greater acceptance. Those who identfied themselves as Democrats  were almost twice as 'in favor' of legalization as Republicans.

It would appear that French-owned Fitch, following its rating-watch-negative shift on the US credit rating last week, has got a tap on the shoulder from the powers that be. As Hollande complains about Obama's espionage, Fitch has released a statement explaining how the USA can do whatever it wants and not be downgraded. With only the Chinese ratings agency "able" to openly comment on the creditworthiness of the USA, it is no surprise that Fitch gave itself an "out" on the basis of the USDollar's exorbitant previlege.

Stocks balloon, we’re incessantly told, because revenues and earnings rise. But what if they sag for years, and the stock still balloons?

All in the family, again!

Putting today's 7.2% unemployment rate (which is actually over 11% if using an accurate labor participation rate), here is the chart that puts it into perspective courtesy of the an "analysis" by Christina Romer and Jared Bernstein titled "The Job Impact of the American Recovery and Reinvestment Plan" from January 10, 2009. Oh yes, the ARRA did pass...

Stevie Cohen's beleaguered 'hedge' fund SAC Capital has decided to shutter its London office:

• *SAC SAID TO PLAN CLOSING DOWN LONDON OFFICE BY END OF YEAR
• *SAC SAID TO EMPLOY MORE THAN 50 PEOPLE IN LONDON OFFICE
• *SAC SAYS IT CUT SIX U.S. PORTFOLIO MANAGER POSITIONS THIS WEEK

But perhaps, even more importantly - and some suggested responsible for the collapses in several major tech/momo names this morning:

• *SAC SAYS ITS SIMPLIFYING FIRM, REDUCING CAPITAL ALLOCATIONS

With stock prices held up by the marginal levered hedge fund buyer, SAC's size makes their liquidations as big a threat as anything to this fragile market.

Just when you thought ObamaCare couldn't stoop any lower in its "pitch", it does...

These men are masters of the capital markets. They are voting with their feet and pulling their capital out of them. 

As we’re coming up on the 100th anniversary of the establishment of Federal Reserve, one thing has become abundantly clear - these guys are horrible at their jobs...

The last time employees in the "Food Services and Drinking Places" category experienced a monthly job decline was February 2010. Since then, for 42 consecutive months, the US eating and drinking industry went on an epic hiring spree without a single month of net layoffs, adding over 1 million workers and hitting an all time high 10.334 million workers, even as actual restaurant retail sales have recently tumbled as a result of the middle-class US household once again running on fumes as a result of the Fed's disastrous wealth-transferring policies. Well, as the chart below shows, after 42 months of relentless hiring of bartenders and waitresses, we may have just hit "peak bartenders."

It seems, once again, that Apple shares were bid into the product announcement and sold on the news (though it appears the selling has been front-run a bit). No one really knows what they will show but expectations are for a shiny new iPad which will wow audiences world wide until they start to use it and realize it's the same as the old one... (rumors include iPad Mini 2, iPad 5, New Macro Pro, New MacBook Pros, OS X Mavericks, and even Apple TV again...)

There are no simple solutions to the issues that currently plague the U.S. and, unfortunately, the latest debt ceiling debate/government shutdown did nothing to institute any reforms whatsoever.  The "kick-the-can" solutions by fiscal policy makers continues to show little understanding about the drivers of real economic growth, the need to reduce governmental dependency or a real "wealth effect" that impacts more than just 1% of the population.

You May Think You Have Nothing to Hide ... But You Are Still Breaking Laws Which Government Spying Could Discover and Use Against You

All of these things are not like the other... except one!