(See also parts 1 and 2, and coming up soon on Talk Nation Radio, an interview with David Swanson about Occupywallstreet and why he will be in Washington D.C. in October 2011.
A Day at the Races, apologies to Groucho Marx
8:10 a.m. October 3, 2011:
The horses are in the starting gate after prancing up and down and chomping at the bit. Their spirits seem high. Yet, what is happening in the news about “futures” and Greek debt? Plus how’s the U.S. Super Committee set up to implement America’s austerity programs doing? News teams that cover Wall Street are steering clear of the U.S. side of things. Congress isn’t exactly succeeding, but more shuffling around the paddock, as the horse’s grooms are preparing to try to calm things down a bit, feed them more oats and corn from the nation’s fat reserves..some of the more feisty members of the House and Senate may use some old racetrack tricks. They may drug things some by agitating. Or, they could bring the mares out of the stable to entice the stallions on the track. --This is as good a description as any for what happens on Wall Street between 7:00 a.m. and 9:30 a.m. when markets officially open in Eastern Standard Time.
The Gold and Silver ETF's are going up as much as a dollar and a half over all of the excitement. They include GLD, SLV, IAU, SVM, and many others. People may be actually poised over the 'track', the trading platforms they store in their computers. (Photo by KentuckyDerby.com) (Postscript... if you have managed to pull up Kitco.com's real time charts you know that Gold and Silver are retreating again... At 10:42 it looks like this is nothing but a bump on the screen, as traders say. A blip, a hiccup, a fake out. Hope you didn't lose any of your retirement money.)
One thing we can know for sure. A trade war has started between East and West, and throughout Europe, that will impact the globe. Lots of horses, (corporations, online trading houses, mining firms, and small businesses) could be sent back to the stable or put out to pasture entirely. The hedge funds will be stabilizing their gigantic assets into a holding pattern. Some will continue to rake in profits from contrary funds like the VIX, volatility index. During 2008 it shot up to $100.00. Right now its half way there.
For trade houses, Goldman Sax, and major global banks, plus the markets themselves, the index trade houses, markets are ALWAYS open. If they want to spruce up the economy on a given day they all share the same inner peace over the idea that well, they can ALWAYS RAISE the PRICE OF OIL by a few bucks and kick start the horses, get out the whip, until they begin to bolt up up and away...
So what is really going on though? In the news we see evidence of pure fear in the markets. That despite the tentative efforts of some trade analysts we heard from over the week end who claimed the "worst was over for Greece" and markets. Now some of the analysts are also saying that Gold has found it's "bottom". Who is right? Who is wrong? Nobody really knows for sure, and so the trading begins as average people search out the right answers for their own failing bank accounts.
There is a headline up on Market Watch this a.m.. It reads: "Greek deficit and gold in the spotlight". The crowd at the track twists their heads around as one to read it. Will that mean further drops in the US market toward the record we saw in 2008? Potentially, it will. Greece could actually head into "default" officially, though some believe it is a kind of default to get that close to complete economic failure.
Meanwhile, Bank of America had trouble with their web page. Was it a trial run? Were they trying to prevent the crowd from rushing to get their money as the bank begins to list like the Titanic? More of an update at 9:30.
Hi Ho Gold and Silver to the Rescue?
The truth about the precious metals is ever elusive. No one ever knows at any split second in time what their value will be because it is all speculative, it all depends on investing, not real value. For some of the analysts, they believe it has to go up because so many of the world's horses, traders, are ready to burst out of the gate and pop it up. They WANT it to go up. They could WILL IT TO GO UP.
Possibly Gold and Silver have probably reached a temporary low as the news cycle begins anew on the first day of the month. Equally possible... the price of oil stays below 80.00. Gold and Silver tank downward.
In China, there are efforts to lower growth and punch up inflation. Sound crazy? It's a tactic and the USA is engaging in it as well. These are efforts to stabilize economies. Meanwhile members of Congress are offering a solution. Just tell the Chinese they have to stop keeping their currency values "artificially low" as a way to provide cheaper costs for U.S. buyers of goods. That wrinkle could affect currency markets and the price of Gold and Silver today. The reason is complicated, but on any given day the world's most frightening super computers will be trading in currency values at the speed of light, or something close. World monetary systems will heave and crack open in big earthquake like movements, but it is all typically for the beginning of a month. Furthermore, the Chinese backed their currency with Gold a few months back. Didn't know about that? Well during the time they were accumulating the precious metal it nearly topped $2,000. Then came the "short sell" and prices went down $300.000. Many see the price as leveling off this week.
Mining companies have expanded to the extent that their stock values may actually be falling, that according to Kitco.com's news page where you can see a chart that moves in "real" time along with Gold, Silver, Platinum and Palladium prices as well as Copper prices.
Some of the larger stables have abruptly reported some BUY OUTS of other stables.. Carlyle Group is to buy Pharmaceutical Product Development Inc. at a per share price that would normally send traders rushing to buy buy buy. But trade is closed. Carlyle Group has loads of friends who are now getting in on the "inside" track, and they can buy while everybody else is shut out. Their stock ticker, PPDI, shot up 26%, but most people had no way of profiting. It seems likely that Carlyle Group itself managed to buy, and help others buy, at a key moment in the company's history. Now they could push the stock back down... it's all part of the game. Bodies lying on the ground, financially speaking, are no big deal to the world. But, do you think this could have anything at all to do with the present drug shortage that has led doctors in Massachusetts to ration a Calcium compound necessary for normal metabolism....and a lifesaving drug for premature infants? We will see how much worse things can get in the health care 'industry' before it's all over).
A Chinese interest offered to buy Yahoo this morning, and the company's stock went up about half a buck. Soon, however, came the news that Yahoo had entered into an agreement with ABC to provide combined news and information as well as video.
These news releases are all planned. The buy offer caused Yahoo to jump, and those working for the company on the global markets hoped that would give things a boost during the all important pre market trading hours when the market is being set up to rise or fall. Set up is a good word to use for those small investors hoping to catch a break. They want to avoid falling for a set up, but they have no way of knowing which story is true, or near the mark, or completely ridiculous. Reporting on stocks is a form of 'poker' journalism. They could be telling the truth about their "hand" or "bluffing", either way, nobody is ever going to hold them accountable for providing information that costs investors millions.
9:45: When you study the global markets you can see immediately what the problem is for New York today other than the visitors at Liberty Plaza. Oil has fallen from 78.00 to 77.00 bucks. The Hang Seng fell nearly four and a half percent over fears that Hong Kong's major banks were not solvent. In Japan the Nikkei went down some more. It had already collapsed after the March tsunami and nuclear disaster at Fukushima Daiichi. London's markets fell over 100 pounds but the jazzing up of the numbers has begun. It is 9:40 a.m. in Connecticut. What we are seeing is a calculated use of capital to buy up shares and keep prices from falling. There are people known as "market managers" flailing about in New York City and before the week is out some of them may pick up the keys to the trader's lounge, box up a few documents, and run outside into Liberty Plaza with open arms. The park and its OccupyWallStreet movement is the real "safe haven" in a global economic crisis where those created by speculative traders have fallen off a cliff.
This piece at techpresident.com by Micah L. Sifry, October 1, 2011, provides a good overview of Occupywallstreet and their growing national movement. In coffee shops and malls, at factory break rooms, and smoker's huddles outside the door of social service agency offices.... people are talking about the folks who dropped what they were doing and showed up at the heart of the nation's financial crisis, Wall Street. It is 2011, a year that the world's market movers and shakers will tell their grandchildren about.
10:15 a.m. ET WAIT! Hold on to your bet tickets, a few of the horses are nearly half way round the track and there are some surprises today. Some of the younger colts have become energized over a rising manufacturing index... its only a fraction, the older veteran runners would sneeze at it, but these young boys are hot for victory. The Dow jumps up $33.00, and wait someone in the oil industry just put in a magic oil dollar! oil up from 77.00 and the Dow is rising to $41.00 and now $51 and upward!! Vwalla! It's just after ten in the morning at Wall Street and they managed another fake out. Traders are in heaven now, they can manipulate their shorts (not those shorts) and actually make a few bucks off of the heat coming off of the track. Stimulation, as well as growth, keep all of this going. Sometimes they have to pump it up, artificially, and its definitely one of those days.
By 1:30 we may see another $100.00 or even $300.00 dollar drop. Who knows? The excitement has people drinking coffee and stuffing their pockets with bet cards. During the past few years a Military PR man nicknamed Bing West, took a bunch of Marines to Wall Street for a visit. They came away saying, hey, this is where the real war is going on. Still, it seems so predictable. Some people win, they're on the inside track, some people lose, this goes on day after day, and in the end things always go up or at least stabilize right? I'm not so sure, and neither are a whole lot of people. From my point of view this is all leading to disaster for societies all over the globe. But the horses will keep running, and the numbers will be manipulated, and the tickers will move... and most of the capital will wind up in the coffers of the hedge fund managers and speculators who know what's really going on. (P.S., the Marines are now at Occupywallstreet, and they say they want to protect the protesters, a rallying cry that the Tea Party supporters paying attention to the issue were happy to pick up and run with...there will be a lot of that going on as people try to 'own' this movement, though it seems the core group engaging in the Occupywallstreet protests have little interest in being defined by any of the usual political terms. They have broken free from the chains of debate framers in Washington and elsewhere, and are reclaiming the language of protest, as they reclaim the territory on the streets of New York and other U.S. cities.)
More at 1:30 P.M. ET, expect to see more language about how the ISM manufacturing index numbers have "soothed" and yet "stimulated" and helped the U.S. Stock Market on Wall Street. For the trading world it's the equivalent of Reverend Billy singing out "Revalleluia". Everybody smiles. Everybody smiles. The loading up of ammo for the Tues/Wed shoot up has just gotten started. Traders are accumulating. Soon there could be a recovery, and a crash... in that order.
1:30 P.M. ET Markets trending downward, large blue chip companies on the Dow (-222) and also stocks on the Nasdaq, (-60) and S&P 500, (down -24) are "in the red" as they say on Wall Street. Gold and Silver are about the same or lower too. And then there is the 'other' Wall Street, the one that is part of the whole universe of investing globally, and that is the Wall Street that is impacted hour by hour as the "Global Dow" moves up or down. Like Oil, the prices on the "Global Dow" are a big indicator (indices) for what might be coming up in the U.S. stock, bond, commodities, and even currency numbers. We are fully globalized, and those traders who make U.S. markets move must constantly look at global indices for information about what to do.
The hiccup in America's markets earlier today did inject some capital into London's FTSE and other exchanges in France, Germany, and even Asia. Markets moved upward, even if they stayed in the losing realm of the spectrum.
However, by 1:40 P.M. ET, things had shifted downward. What is the problem for investors? It's the whole picture of defaults, lower values in terms of quarterly earnings, downgrades by ratings agencies like Standard and Poors, but it is mainly because the price of oil has fallen some more and that is also keeping Gold and Silver prices down. If you go to one of the trading sites on
These are the kinds of daily bail outs that markets give to one another. That's why the Deutsche Börse decided to go ahead and buy the New York Stock Exchange, NYSE on Wall Street! If you didn't know about that don't worry, you are not alone. The story got only a small amount of coverage. Still, given the stakes, and that such mergers and acquisitions in the global markets will likely continue, this story could one day become the lead story of the decade... much like #Occupywallstreet itself!
This is how the significance was summed up by Dealbook, a publication of the NYT. On February 9, 2011, Michael J. De La Merced and Jack Ewing, wrote that, "A merger would potentially let customers trade stocks in New York, options tied to those shares in Paris and derivatives linked to them in Frankfurt. --A combination, after the mergers of other exchanges, would be another illustration of how globalization and technology have changed marketplaces. The New York Stock Exchange is a giant among exchanges, yet in a world of around-the-clock trading and rapid-fire algorithmic programs, its significance to investors has diminished. Once known for chief executives who were prominent cheerleaders for the stock market, the exchange now has a more muted public presence."
In other words, markets would likely be more volatile, America's oldest stock exchange would become less and less influential. As far as I know, no American voted for this change that might impact their retirement funds, nor did they get members of Congress to vote on it for them. There will also be a major shifting of leaders who will affect the markets globally, and in New York. Check out this Wall Street Journal story on what happened during the trade wars recently as Russia's oil "oligarchs" shuffle for power. "At the heart of Boris Berezovsky's lawsuit is an allegation that Mr. Abramovich intimidated him into selling his 21.5% stake in the Russian oil company OAO Sibneft for much less than its real value," notes writer Guy Chazan. Berezoveky wants $5 billion in damages.
These types of battles will be raging over oil and other commodities for the duration of our natural lives. The question is, will we continue to lose all ability to have a voice in what the corporations, and their friends in U.S. governments, do on our behalf? Furthermore, as we see protests in Germany, Greece, France, the UK, Canada, and America, how much can we know at this point about which forces, and in which countries, will dictate the terms of our financial futures?
2:30 P.M. ET: After the a.m. merger activity, the markets sorted out who had the controlling influence for today, October 3, 2011. They decided which news story, which traders, and what monetary forces around the globe, would be leading the markets. We cannot know if it is the news, or the trade activity itself that is leading markets. Stories about defaults in Greece are definitely having impact, but couldn't this be just another cover for another process that is far more predictable... for a certain class of society. The 1 percent, and their super computers.
We used Nasdaq.com, Market Watch, Nightly Business Report, Seeking Alpha, Yahoo Finance, Google Finance, Twitter, Facebook, and Occupywallstreet analysis! We'll take a look at biases such as location, Market Watch is published in Israel by News Corporation, home to the Murdoch family. PBS hosts commercials, and relies on trade analysis from some of the very same companies they are reporting on. Etc. Overall, there is typically a lot of posturing and bluff, with most of the news sites about markets trending positive, even when markets are in deeply negative territory.
And remember what we said in part 1 about Raymond James, how they charged $80.00 for a trade, and didn't necessarily tell people how to buy stocks at the "best" rates of the day or month? Here is their web site just FYI. We are trying to be fair, and not show preference for any company, trade information or news outlet, or online trading service. We can confirm that FINRA, the The Financial Industry Regulatory Authority, has in fact fined Raymond James & Associates, Inc. $425,000. The company has been ordered to return some $1.69 million to investors, as excessive commission fees.
See more on SUPER COMPUTERS in Part 4.
