Like Captain Kirk calling to his engineer on the starship, Enterprise, 'Beam me up, Scotty'. Get me out of here. I can't take any more. The world is filled with idiots and zombies. No one has even the first clue about what is happening in the economy. And worse, our government representatives are unconsciously clueless. When any of them open their mouths, I think, 'what?' It's almost like they speak by stringing random words together to make a sentence. At this point, I think our only hope is for the government to disband. Just go home. Leave us alone. Board up the White House and the Capital building. Just look at the past week.
The fellow that sleeps in the White House is still running around blaming everything from the current recession to the extinction of the woolly mammoth on the previous resident incompetent. And somehow, Obama takes credit for the stimulus and bank bailout and saving the economy from depression. But, didn't all that stuff get started under Bush? Have I been dreaming for ten years? But take credit for what? Bankrupting the country? Continuing the eradication of individual liberties? The massive expanse of government control? And he brags about these deeds?
On Tuesday of this week, the Fed met and and left the Fed Funds rate at zero. They also said that the supposed (my word) 'recovery' was weak so they would boost it by buying US Treasury bonds. Only, they were going to buy all the intermediary stuff and leave the 30-year maturity and the 2-year maturity alone. Why? They want to keep the so-called yield spread nice and wide. Even as dumb as Bernanke is, he has learned you don't mess with the yield curve. If it inverts, it signals recession. How does buying bonds help? It doesn't. What did the stock casino do? It jumped higher. Look at the chart below. You can see the jolt given to the casino with a powerful boost of volume no doubt supplied by the PPT.
Pelosi and her corrupt minions of nation destruction passed more legislation consisting of some $26 billion of state aid. Of course, the government doesn't have $26 billion to pass out but Pelosi and her pals don't care. They just think its magic. Write legislation. Pass out money. Reap the votes of the free money recipients.
By the end of the week, consumer confidence was reported to be ever so slightly up while real spending was down. All this babbling idiocy has made the stock casino impossible to navigate. As you can see from the chart below, every day now produces a gap at the opening of trading. In other words, whatever level a major index ended at on the previous day, it will no doubt start the next day at a much different level. Every day is completely different from the previous day. Government manipulation is pronounced and the Fed is determined to grease the indexes. What will they do next?
Several observations. Earnings don't mean a thing anymore. Besides, accounting is simply molded to meet the desired results. Lies are reality. The government tells us everything they want us to believe. All that matters is momentum. And now, that momentum has turned negative. When will it turn positive? I will tell you the exact moment. It will be when the Dow falls a few hundred points below 10,000. At that point, the Fed will unleash a trillion dollar buy program. Most likely, it will happen at 3PM. Watch for it.
SPY - last five days, 10 minute bars.
Chart courtesy StockCharts.com