We have read, and written, all of this before (and speaking of, since 2012 is still a carbon copy of 2011, we could so easily just repost articles from February 2011, change the year, and nobody would notice - we could even save on robo-posting costs) but there is always something just so enjoyable in hearing the Chairman of the Fermentation Committee point out the glaringly obvious to the vacuum tubes in charge of a market which is now a 6-8 week lagging indicator to reality.
While the government propaganda machine chugs along and tells us to move along, there is nothing to see in the plunging labor participation rate, it is just 50 year olds pulling a Greek and retiring (fully intent on milking those 0.001% interest checking accounts, CDs and 3 Year Treasury Bonds for all they are worth - they are after all called fixed "income" not "outcome") there is more than meets the eye here. Yet while we will happily debunk any and all stupidity that Americans actually have the wherewithal to retire in droves as we are meant to believe (with the oldest labor segment's participation rate surging to multi-decade highs), there is a distinct subset of the population that migrates from being a 99-week'er to moving to merely yet another government trough - disability. Art Cashin explains.
On Friday, Zero Hedge presented an extensive refresh on the one latent hotbed of troubles that everyone has conveniently forgotten about, yet which is getting worse by the day: the Mediterranean region, in "What Lies In Store For The "Cradle That Rocks The World" - A History Lesson In Crisis" and specifically Egypt -that most populous Arab nation, which last time we checked, is still Israel's neighbor (and which still controls the Suez canal). Still, for some of our more attention troubled readers who may have passed on the Friday piece, here is a much shorter version from Art Cashin which focuses on just one of numerous variables in play - the relationship between the controlling military and the resurgent Muslim Brotherhood. In other words, in deposing of Mubarak, the US has once again done its bull in a china shop approach to foreign relations and replaced one quite predictable dictator with a bevy of far more dangerous unknowns. Cashin's conclusion is traditionally cryptic and ominous: "The most populous Arab nation on the Earth and Israel’s closest neighbor is on the verge of something dramatic and potentially very, very dangerous. Watch carefully and constantly."
Two days ago we learned that when MF Global goes bankrupt, billions in cash can just "vaporize" (no, really - see here, and of course, in the passive voice. can't say something like Jon Corzine vaporized $1.2+ billion in client money now can we). Next we have Art Cashin explain why it is that the US economy is about to see several hundred thousand jobs "vaporize" as well. Perhaps "vaporize" should be the motto of the current Administration: confidence "vaporized", hope "vaporized", and "evaporation" you can believe in, as it condenses on the teleprompter...
The Chairman of the Fermentation Committee takes the fizz out of the market once again.
So far today's market action appears to be reasonably tame, with no economic data on the horizon, no real update out of Europe, rumors largely ignored at this point, and all signs indicating a quiet trading session for the rest of the day. But will it be? The only market veteran whose opinion actually matters, Art Cashin, says not so fast, especially if one looks at historical precedent, with a focus on 1987 (which incidentally is the last year in which the S&P moved up as much as it has YTD, only to culminate with Black Friday). Could it be that the quietest day ends up surprising everyone?
Though it won't come as a surprise to too many who have seen us point to US equity outflows and the dreadfully declining volume on the NYSE, we leave it to UBS' Art Cashin to uncover where the real action is - and more importantly where it really is not. The experienced Cashin points to the early excitement as Asia and Europe remain active and the dramatic ebb as both of these markets head off to supper, leaving just US traders (and investors we assume) sitting on their hands, twiddling their thumbs, and generally not playing the game (aside from the general rumor-mongery that appears to be rising day by day).
While it is already known that the first Friday the 13th of 2012 will be very memorable, at least for France, a bigger, and more philosophical question is, whether Friday the 13th is in general unlucky for stocks. UBS' Art Cashin provides the veteran perspective, as well as unravel some false myths about the term Triskaidekaphobia.
While economic data may be manipulated daily, and markets can be pumped in any of many different ways (such as the ongoing preparation by the ECB to accept any collateral for the upcoming LTRO which will bring the ECB's deposit facility usage to $1 trillion), there is one true indicator of economic prospects: immigration. Long a target for immigrants from all over the world, something has changed very drastically for Italy in recent days. Art Cashin explains why the one indicator that matters - Italy's desirability for immigrants from countries such as Afghanistan and Bangladesh, means everything has changed now.
Despite the barrage of geopolitical headlines involving Iran, and as of today, the US and Israel, especially as pertains to wargame exercises in the Straits of Hormuz, a different, and potentially much more important story is to be found in the country's capital markets, and specifically its currency, which has continued to tumble ever since Obama signed the Iran financial boycott on New Year's Day as reported here. And, as we predicted, it is the aftershocks of the boycott which may have the most adverse impact on geopolitics. Because if the Iran regime finds itself in a lose-lose situation with its economy imploding and its currency crashing, the opportunity cost of doing something very irrational, from a military standpoint or otherwise, gets lower and lower. Then again, something tells us the US administration has been well aware of this sequence of events all along. Here is Art Cashing explaining it all.
We are always amused by technicians trying to predict what the market will do based on something that may have happened some time in the past, when in reality the only thing that matters is the distinction: "Pre-Central Planning" and "Post-Central Planning" or PCP (for both) - in other words, anything prior to 2009 is completely irrelevant when it comes to analyzing the market. Yet people continue doing it. And while the predictive pattern of such formerly "self-fulfilling prophecies" is now gone, courtesy of whatever side the Chairman wakes up on, traders habits die slowly. Here is Art Cashin with his summary of what trading patterns are relevant for the new year. That said, we remind readers that the first trading day of 2011 saw the S&P rise from 1257 and close at 1272, something which #CarbonCopy2012 seems dead set on imitating. After all, with central planning, why recreate the wheel - Brian Sack can just hit the "repeat 2011" program button and all shall be well. All the way up to a 2012 year end close at 1257.
It may not be iambic pentameter or Shakespearean sonnet-worthy but the venerable Art Cashin delivers his now traditional year-end poetic summation of all things newsworthy - old and new.
Now that we have had a day to digest the move from yesterday, we go to the only voice in the market worth listening to, that of Art Cashin. Not surprisingly, he doesn' tell us anything we did not already report or know, but good to hear the confirmation nonetheless.
Think "all is fine" in Europe after today's largely irrelevant Italian bill auction (the auction was for 6 month debt - even Greece can raise that kind of money)? Think again. Here is the Fermentation Committee Chairman explaining why Europe is so hard pressed to create a fake sense of calm, allowing those who know the real story to take advantage of the situation while they still can, and sharing the behind the scenes truth you won't get anywhere else. Certainly not SWIFT.
As the year grinds to a close, we bring you the most poetic ending possible. That of the veteran trader artiste-cum-fermentation committee chairman himself...