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A couple of readers reckon I was too harsh on the CEO of Wachovia that reported a $9bn dollar loss, and then had the front to claim - with a straight face - that the bank was adequately capitalised and would not have to raise more capital.
I don't think it was harsh at all - anyone who has been remotely awake in recent months will have seen CEO after CEO claiming that there was no need to raise new capital, then turn around and raise billions less than a month later.
Citigroup and Merrill Lynch both pulled this stunt: selling new stock to foreign sovereign wealth funds, claiming that this equity raising meant there was no need for further raisings, and the - within a month or two - undertaking another capital raising.
So let's get this straight. The SEC is going to take a tough line with anybody who starts negative rumours about a company. Would the SEC have gone after people who called "Bullshit" on the claims of Merrill and Citi at the time if the new SEC rules had been in place?
Furthermore, given that the CEO's statements were transparent bullshit at the time, on what basis ought people have been discouraged from shorting ML and C stock? Why is it not illegal to bullshit in an attempt to manipulate your own stock upwards?
The answer is simply that these Titans think that they deserve to be indemnified from the results of their own stupidity and hubris. The think this on the basis that these shitbags have bought and paid for the Congress, the SEC, and anyone else who thinks that tax receipts are for something other than transferring to political cronies.
So shut up and watch this re-run of the murder of some white girl 5 years ago.
Economic News
A fairly awful set of economic data today
- Initial Jobless Claims were much higher than anticipated - 406k versus consensus of 380k; and
- Existing Home Sales at 4.86m units as compared with a consensus guess of just under 5m.
Fed Open Market Operations
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The Fed's Open Market Operations desk performed 3 repurchase operations:
- a 1 Day repurchase totalling $ 5.5bn, with $231m in Treasury-backed collateral, undertaken at a weighted average rate of 2.022%.
- a 7 Day repurchase totalling $14.0bn, with $13.595bn in Treasury-backed collateral, at a weighted average rate of 1.943%; and
- a 14 Day repurchase totalling $5bn, entirely in Treasury-backed collateral at with a weighted average rate of 1.992%.
Headline Indices
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The Dow Jones Industrial Average lost 283.1 points (2.43%) to 11349.28 points - closing as near as dammit to the session low. The index high for the day was 11634.49 a minute or two after the open, while the low was 11345.37 a few minutes prior to the close.
Within the index, 4 issues rose, with aggregate volume of 32.56m units; 26 issues fell, with aggregate volume of 652.69m units. Overall the 30 Dow components traded a total of 685.3m units.
Ford's massive loss weighed heavily on GM, which was by far the worst Dow component in percentage terms. Financials were also very weak as investors start to reject the mindless journalistic pablum of recent days, and also reject the efforts at propagandising by Goldman's Man at Treasury.
- General Motors (GM) -1.62 (11.1%) to $13 on volume of 10.89m shares;
- Citigroup (C) -2.06 (9.8%) to $19.06 on volume of 95.96m shares;
- AIG (AIG) -2.67 (8.9%) to $27.43 on volume of 23.59m shares;
- Bank Of America (BAC) -2.8 (8.4%) to $30.64 on volume of 101.84m shares; and
- American Express (AXP) -2.93 (7.4%) to $36.41 on volume of 14.74m shares.
The S&P500 Index lost 29.65 points (2.31%) to 1252.54 points. Total volume traded in the index was 3.6bn units. Within the index, 68 issues rose, with aggregate volume of 513.1m units; 428 issues fell, with aggregate volume of 3063.89m units.
The main decliners (in percentage terms) were -
- MEMC Electronic Materials (WFR) -11.57 (21.5%) to $42.23 on volume of 15.77m shares;
- MGIC Investment (MTG) -1.39 (20.1%) to $5.51 on volume of 2.52m shares;
- Fannie Mae (FNM) -2.98 (19.9%) to $12.02 on volume of 72.96m shares;
- Federal Home Loan Mtg. (FRE) -1.99 (18.4%) to $8.81 on volume of 68.56m shares; and
- Lennar Corp. (LEN) -2.47 (18.2%) to $11.07 on volume of 4.95m shares.
The Nasdaq Composite lost 45.77 points (1.97%) to 2280.11 points; the Nasdaq100 lost 28.58 points (1.55%) to 1816.98 points. Total volume traded in the Nasdaq100 index was 1120.53m units. Within the index, 7 issues rose, with aggregate volume of 184.91m units; 92 issues fell, with aggregate volume of 933.07m units.
The main decliners (in percentage terms) were -
- Cadence Design Systems (CDNS) -3.16 (30.8%) to $7.11 on volume of 33.5m shares;
- UAL (UAUA) -1.9 (20.3%) to $7.45 on volume of 21.73m shares;
- Sirius Satellite Radio (SIRI) -0.26 (9.7%) to $2.42 on volume of 61.89m shares;
- Broadcom (BRCM) -2.53 (9.6%) to $23.71 on volume of 34.22m shares; and
- Hansen Natural (HANS) -2.22 (8.4%) to $24.13 on volume of 2.13m shares.
2996 tickers traded today on the Nasdaq exchange; total Nasdaq volume was 2.47 billion shares. A total of 884 stocks posted gains for the day, with aggregate volume of 0.46 billion shares trading to the upside. The red zone of the Nasdaq exchange was populated with 1999 losers, which accounted for a total volume of 1.99 billion shares. 53 Nasdaq-listed stocks hit new 52-week highs, while 105 shares dipped to new 1-year lows.
The CBOE Volatility Index advanced +2.24 points (10.51%) to 23.55 points, and the CBOE Nasdaq100 Volatility Index advanced +0.54 points (1.97%) to 27.98 points.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 11349.28 | -283.10 | -2.43% |
| S&P500 Index | 1252.54 | -29.65 | -2.31% |
| Nasdaq Composite | 2280.11 | -45.77 | -1.97% |
| Nasdaq100 | 1816.98 | -28.58 | -1.55% |
| CBOE Volatility Index | 23.55 | +2.24 | 10.51% |
| CBOE Nasdaq100 Volatility Index | 27.98 | +0.54 | 1.97% |
Of the 30 Dow components, 4 gained ground for the day, with total upside volume of 32.57m units. 26 Dow components suffered losses for the day, with total volume in declining index components of 652.81m units.
The 4 Dow advancerswere
- Merck (MRK) +0.45 (1.4%) to $32.22 on volume of 11.8m units
- Johnson & Johnson (JNJ) +0.39 (0.6%) to $68.66 on volume of 9m units
- IBM (IBM) +0.48 (0.4%) to $130 on volume of 8.4m units
- 3M Co (MMM) +0.25 (0.4%) to $71.05 on volume of 3.4m units
Major Decliners in the Dow were
- General Motors (GM) -1.62 (11.1%) to $13 on volume of 10.9m units
- Citigroup (C) -2.06 (9.8%) to $19.06 on volume of 96m units
- AIG (AIG) -2.67 (8.9%) to $27.43 on volume of 23.6m units
- Bank Of America (BAC) -2.8 (8.4%) to $30.64 on volume of 101.9m units
- American Express (AXP) -2.93 (7.4%) to $36.41 on volume of 14.7m units
Most Traded Dow stocks were
- Bank Of America (BAC) --2.8 (8.4%) to $30.64 on volume of 101.9m units
- Citigroup (C) --2.06 (9.8%) to $19.06 on volume of 96m units
- Microsoft (MSFT) --0.99 (3.7%) to $25.44 on volume of 79.3m units
- Intel (INTC) --0.63 (2.8%) to $21.67 on volume of 59.9m units
- General Electric (GE) --0.62 (2.1%) to $28.71 on volume of 59.7m units
Precious Metals
Precious metals futures have kept in line with our expectations - Platinum continues weak, and will do so for a while yet. When it is time for the Precious Patch to recover, the early signs will come from a sharp fall in the Dumb Bull Ratio in the CoT reports for Platinum.
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 927.8 | 5 | 0.54 |
| Silver | 17.475 | 0.017 | 0.1 |
| Palladium | 383.5 | -8.65 | -2.21 |
| Platinum | 1725 | -35.8 | -2.03 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 57.53m units. Within the index, 4 issues rose, with aggregate volume of 9.48m units; 12 issues fell, with aggregate volume of 48.05m units.
Today the index fell by 3.08 points (1.76%) to 172.25 points. The main decliners (in percentage terms) were -
- Kinroos Gold (KGC) -2.33 (11.2%) to $18.4 on volume of 8.53m shares;
- Agnico Eagle Mines (AEM) -4.79 (7.5%) to $59.11 on volume of 4.01m shares;
- RandGold Resources (GOLD) -2.26 (4.6%) to $46.7 on volume of 1.19m shares;
- Freeport McMoran (FCX) -4.2 (4.3%) to $94.54 on volume of 5.93m shares; and
- Harmony Gold (HMY) -0.39 (3.6%) to $10.38 on volume of 1.12m shares.
Energy Complex
Energy futures were slightly firmer on the Oil side, but manifestly weaker as regards Natural Gas.
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 125.33 | 0.89 | 0.72 |
| Heating Oil | 3.59 | 0.012 | 0.34 |
| Natural Gas | 9.31 | -0.478 | -4.88 |
| Gasoline RBOB | 3.05 | 0.0156 | 0.51 |
| Ethanol | 2.341 | 0.041 | 1.78 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 87.72m units. Within the index, 4 issues rose, with aggregate volume of 18.48m units; 11 issues fell, with aggregate volume of 69.24m units.
Today the index fell by 4.12 points (1.32%) to 306.83 points. The main decliners (in percentage terms) were -
- National Oilwell Varco (NOV) -3.09 (4.1%) to $72.68 on volume of 7.84m shares;
- Smith International (SII) -2.73 (3.4%) to $76.95 on volume of 3.36m shares;
- Rowan Co (RDC) -1.29 (3.1%) to $40.2 on volume of 3.9m shares;
- Noble Corp (NE) -1.26 (2.4%) to $51.5 on volume of 4.66m shares; and
- Nabors Industries (NBR) -0.93 (2.4%) to $38.28 on volume of 5.31m shares.
Bellwethers
The nine-stock group that makes up the Rant bellwethers declined on average by 6.6%. The fallout occurred as follows:
- General Electric (GE) -0.62 (2.11%) to $28.71 on volume of 59.73m units.
- Citigroup (C) -2.06 (9.75%) to $19.06 on volume of 95.96m units.
- Wal-Mart (WMT) -1.12 (1.93%) to $56.97 on volume of 17.67m units.
- IBM (IBM) +0.48 (0.37%) to $130.00 on volume of 8.38m units.
- Intel (INTC) -0.63 (2.83%) to $21.67 on volume of 59.88m units.
- Cisco Systems (CSCO) -0.41 (1.85%) to $21.76 on volume of 44.44m units.
- Google (GOOG) -13.6 (2.78%) to $475.62 on volume of 3.46m units.
- Fannie Mae (FNM) -2.98 (19.87%) to $12.02 on volume of 72.97m units.
- Freddie Mac (FRE) -1.99 (18.43%) to $8.81 on volume of 68.56m units.
Other Indices of Interest...
The Banks index (BKX) contains 24 components; the total volume traded in the index was 857.61m units. Within the index, 0 issues rose, with aggregate volume of 0m units; 24 issues fell, with aggregate volume of 857.61m units.
Today the index fell by 4.48 points (6.55%) to 63.91 points. The main decliners (in percentage terms) were -
- Regions Financial (RF) -1.64 (13.9%) to $10.16 on volume of 14.27m shares;
- Washington Mutual (WM) -0.62 (13.3%) to $4.03 on volume of 328.53m shares;
- Wachovia (WB) -1.96 (11.1%) to $15.69 on volume of 103.61m shares;
- Comerica Inc (CMA) -3.38 (10.6%) to $28.44 on volume of 2.9m shares; and
- Citigroup Inc (C) -2.06 (9.8%) to $19.06 on volume of 95.96m shares.
The Semiconductor index (SOX) contains 18 components; the total volume traded in the index was 246.83m units. Within the index, 0 issues rose, with aggregate volume of 0m units; 18 issues fell, with aggregate volume of 246.83m units.
Today the index fell by 14.8 points (4.22%) to 335.58 points. The main decliners (in percentage terms) were -
- Teradyne (TER) -1.31 (12.5%) to $9.17 on volume of 6.52m shares;
- Broadcom (BRCM) -2.53 (9.6%) to $23.71 on volume of 34.22m shares;
- Sandisk (SNDK) -1.05 (7.2%) to $13.52 on volume of 12.99m shares;
- Advanced Micro Devices (AMD) -0.3 (6.4%) to $4.37 on volume of 14.6m shares; and
- Infineon Tech (IFX) -0.46 (5.8%) to $7.5 on volume of 2.26m shares.
The ChildKiller ("Defence") index (DFX) contains 17 components; the total volume traded in the index was 88.3m units. Within the index, 1 issues rose, with aggregate volume of 0.59m units; 16 issues fell, with aggregate volume of 87.71m units.
Today the index fell by 6.05 points (1.66%) to 359.43 points. The main decliners (in percentage terms) were -
- FLIRr Systems (FLIR) -2.85 (6.7%) to $39.93 on volume of 4.69m shares;
- Boeing (BA) -4.19 (6.3%) to $62.53 on volume of 9.04m shares;
- ITT Corporation (ITT) -2.65 (4.1%) to $62.67 on volume of 0.79m shares;
- L-3 Holdings (LLL) -3.21 (3.4%) to $92.44 on volume of 0.78m shares; and
- Rockwell Collins (COL) -1.46 (3%) to $47.71 on volume of 0.66m shares.
Currency Futures
Currency futures performed as follows -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 73.04 | 0 | 0 |
| Euro FX | 1.5616 | -0.0017 | -0.11 |
| Swiss Franc | 0.9646 | 0.0016 | 0.17 |
| Australian Dollar | 0.9509 | -0.0036 | -0.38 |
| Canadian Dollar | 0.9864 | -0.0027 | -0.27 |
| Japanese Yen | 0.9342 | 0.0048 | 0.52 |
| New Zealand Dollar | 0.7352 | -0.0085 | -1.14 |
