Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Folks who are not numerate will miss how the shell game works. With the rate of economic growth slower than the rate of population growth, per capita income is falling; furthermore, it is being redistributed upwards as it falls. That is what is known as a 'double whammy' for anyone outside the top 10% of the income distribution (in fact outside about the top 5% almost everyone is going backwards).
Add to this, the fact that GDP is overstated by at least 1.5%, and the actual speed of going-backwards-ness of the average schlub is really quite a thing to behold. Little wonder folks are starting to grumble.
It's a pity that the average Yank is much softer than the average Icelander... it would be fun being able to mention suppression of stories about a Yank invasion of the central bank (have you seen anything in the news about the public outrage in Iceland? about the occupation of the Icelandic central bank and the march on the Althing (the Icelandic parliament)?
You can see them on YouTube... this is why governments all over the world are starting to grumble about censoring the internet... they would prefer that their livestock only got their news from State-run TV stations (or State-controlled through government ad spend) .
You see, politicians are parasites: like all non-symbiotic parasitic organisms, they don't give a flying rat's arse what happens to the host. They have a similar effect on an economy as a scrub tick can have on the family dog... paralysis and death. The tick - having unwittingly been host to parasites of its own - pays no price when Fido dies: the tick is usually long gone before Fido's condition becomes grave. If the dog becomes aware of the tick, the tick risks getting killed. If dogs had access to YouTube they would understand that they ought to check themselves for ticks periodically and be aware of the risks.
There are three main differences between a politician and a scrub tick: first, the political structures take a lot more of our blood than a scrub tick takes from a dog (imagine a tick half the size of a dog and you get the picture); second, ticks don't have armed goons protecting them and enforcing whatever stupid opinions they happen to have formed; and finally, at present it is illegal to douse a politician in highly toxic chemicals in order to remove it from the host and kill it. Hopefully that will change.
Martin Hutchinson pointed out a very interesting thing: that globalisation has now come so far that the world can continue to grow - and global income can continue to be spread somewhat more evenly - withoutrelying on the US.
In fact there is a good case to be made that the US (and Europe) would be the also-rans: their ability to generate capital internally is poor, and foreign capital now has a smorgasbord of investment opportunities around the world.
As capital realises that the rule of law is reliable in developing countries, and given that savings-rich Asians have different home biases to Anglo-Saxons, we could conceivably see a period in which the US and Europe are progressively starved of foreign capital (they are unable to save for themselves, it seems... except the Krauts).
A global realignment of capital would likely be centred on Asia: the 'home bias' would result in greater capital allocation to Asia and a shift of economic growth Eastwards. An interesting thesis, and one which is intuitively appealing: evidence already exists... for example China's forays into Africa (with a cheque book, rather than a carrier battle group) and the increasing propensity of Gulf states to spend petrodollars on domestic infrastructure.
As Hutchison goes on to say, this will likely see falling living standards in Europe and the US - and the political landscape will change. With everyone except the top 5% already being bled white by politicians, a decrease in living standards would be distributed the same way - leading to calls for protectionism (which will of course further reduce the domestic capacity to create capital). Neat.
Economic News
Pending Sales of Existing Homes fell 0.7% - consensus expectations were for a fall of 3%.
Headline Indices
The Dow Jones Industrial Average index (DJI) fell 242.85 points (2.72%) to 8691.33 points. The index high for the day was 8934.10, and was set at about 121:45 a.m. NY time. The low of 8651.74 (let's say 8650) was set at 3:35 p.m. NY time.
Total volume traded in the 30 components of the index was 1.19bn shares. Decliners outpaced gainers by 8.7 to one, with 26 decliners to 3 advancers. Declining volume was greater than advancing volume by 836.1m to 313.93m shares. The main decliners (in percentage terms) were -
- JPMorganChase (JPM) -2.53 (6.9%) to $33.96 on volume of 64.18m shares;
- General Electric (GE) -1.1 (5.8%) to $17.78 on volume of 109.2m shares;
- Disney Corp (DIS) -1.39 (5.6%) to $23.53 on volume of 25.84m shares;
- Bank Of America (BAC) -0.89 (5%) to $16.95 on volume of 114.09m shares; and
- Boeing (BA) -2.03 (4.7%) to $40.82 on volume of 8.01m shares.
The S&P500 index (SPX) lost 21.03 points (2.31%) to 888.67 points. Total volume traded in the 500 components of the index was 4.5bn shares. Decliners outpaced gainers by 3.2 to one, with 368 decliners to 116 advancers. Declining volume was greater than advancing volume by 3.15bn to 1.26bn shares. The main decliners (in percentage terms) were -
- Host Hotels & Resorts (HST) -1.37 (16.1%) to $7.15 on volume of 16.71m shares;
- FedEx Corporation (FDX) -10.78 (14.5%) to $63.65 on volume of 14.09m shares;
- Developers Diversified Rlty (DDR) -0.91 (13.5%) to $5.85 on volume of 8.72m shares;
- Kimco Realty (KIM) -2.46 (13.1%) to $16.29 on volume of 8.43m shares; and
- CB Richard Ellis Group (CBG) -0.56 (11.9%) to $4.15 on volume of 7.3m shares.
The Nasdaq Composite fell 24.4 points (1.55%) to 1547.34 points and the Nasdaq100 declined 12.61 points (1.03%) to 1212.45 points.
Total volume traded in the Nasdaq100 components was 1.05bn shares. Decliners outpaced gainers by 2.3 to one, with 68 decliners to 30 advancers. Declining volume was greater than advancing volume by 647.91m to 397.14m shares. The main decliners (in percentage terms) were -
- UAL (UAUA) -1.58 (13.1%) to $10.52 on volume of 8.67m shares;
- Electronic Arts (ERTS) -2.52 (11.5%) to $19.35 on volume of 9.83m shares;
- Baidu.com (BIDU) -8.59 (7.3%) to $109.36 on volume of 7.03m shares;
- Level 3 Communications (LVLT) -0.0568 (7%) to $0.75 on volume of 14.97m shares; and
- Discovery Holding Co (DISCA) -0.94 (6.3%) to $14.02 on volume of 4.48m shares.
Volatility
The CBOE Volatility Index added 0.42 points (0.72%) to 58.91 points and the CBOE Nasdaq100 Volatility Index lost 0.58 points (1.01%) to 56.59 points..
Breadth and Internals
A total of 3922 issues traded today on the NYSE; today's total volume was 2.11bn shares. A total of 1266 stocks posted gains for the day, and volume in advancing issues totalled 1.91bn shares. Exerting downwards pressure on the index were 2581 losers, which accounted for a total declining volume of 140m shares. 14 stocks made new 1-year highs on the NYSE, while 89 shares plumbed new 52-week depths. {Note - I do not believe those AD volume numbers... I bet they are a stuffup}
On the Nasdaq 2988 tickers traded today; total Nasdaq volume was 2.25bn shares. A total of 962 stocks posted gains for the day, with aggregate volume of 770m shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 1905 losers, and total declining volume was 1.46bn shares. 6 Nasdaq-listed stocks hit new 52-week highs, while 94 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 8691.33 | -242.85 | -2.72% |
| S&P500 Index | 888.67 | -21.03 | -2.31% |
| Nasdaq Composite | 1547.34 | -24.40 | -1.55% |
| Nasdaq100 | 1212.45 | -12.61 | -1.03% |
| CBOE Volatility Index | 58.91 | +0.42 | 0.72% |
| CBOE Nasdaq100 Volatility Index | 56.59 | -0.58 | -1.01% |
Dow Darlings
- Intel (INTC) +0.36 (2.6%) to $14.3 on volume of 86.6m units
- Citigroup (C) +0.07 (0.8%) to $8.54 on volume of 214.5m units
- Du Pont (DD) +0.04 (0.2%) to $26.38 on volume of 12.9m units
Dow Duds:
- JPMorganChase (JPM) -2.53 (6.9%) to $33.96 on volume of 64.2m units
- General Electric (GE) -1.1 (5.8%) to $17.78 on volume of 109.2m units
- Disney Corp (DIS) -1.39 (5.6%) to $23.53 on volume of 25.8m units
- Bank Of America (BAC) -0.89 (5%) to $16.95 on volume of 114.1m units
- Boeing (BA) -2.03 (4.7%) to $40.82 on volume of 8m units
Most Traded Dow stocks:
- Citigroup (C) +0.07 (0.8%) to $8.54 on volume of 214.5m units
- Bank Of America (BAC) --0.89 (5%) to $16.95 on volume of 114.1m units
- General Electric (GE) --1.1 (5.8%) to $17.78 on volume of 109.2m units
- Intel (INTC) +0.36 (2.6%) to $14.3 on volume of 86.6m units
- Microsoft (MSFT) --0.41 (2%) to $20.6 on volume of 78.9m units
Precious Metals
Precious metals futures were mixed -
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 775.9 | 6.6 | 0.86 |
| Silver | 9.81 | -0.165 | -1.65 |
| Palladium | 181 | 5.8 | 3.31 |
| Platinum | 818.1 | -25.2 | -2.99 |
The Gold Bugs index (XAU) advanced 0.78 points (0.82%) to 96.06 points. Total volume traded in the 16 components of the index was 114.95m shares. Advancers outpaced decliners by 1.3 to one, with 9 advancers to 7 decliners. Advancing volume exceeded declining volume by 61.96m to 52.99m shares The biggest gainers (percentage-wise) were -
- RandGold Resources (GOLD) +1.2 (3.3%) to $37.34 on volume of 0.95m shares;
- Newmnt Mining (NEM) +0.85 (2.7%) to $32.23 on volume of 8.82m shares;
- GoldCorp (GG) +0.46 (1.9%) to $24.53 on volume of 11.79m shares;
- Barrick Gold (ABX) +0.5 (1.8%) to $27.75 on volume of 10.47m shares; and
- Silver Wheaton (SLW) +0.05 (1.4%) to $3.59 on volume of 6.13m shares.
Energy Complex
Energy futures were soft -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 42.25 | -1.46 | -3.34 |
| Heating Oil | 1.44 | -0.0504 | -3.38 |
| Natural Gas | 5.611 | 0.045 | 0.81 |
| Gasoline RBOB | 0.9411 | -0.0207 | -2.15 |
| Ethanol | 1.456 | -0.012 | -0.82 |
The Oil Services index (OSX) advanced 2.67 points (2.31%) to 118.06 points. Total volume traded in the 15 components of the index was 109.06m shares. Advancers outpaced decliners by 4 to one, with 12 advancers to 3 decliners. Advancing volume exceeded declining volume by 94.07m to 14.99m shares The biggest gainers (percentage-wise) were -
- Oceaneering International (OII) +2.17 (10.1%) to $23.76 on volume of 1.39m shares;
- Global Industries (GLBL) +0.27 (8.8%) to $3.33 on volume of 2.9m shares;
- Cameron International (CAM) +1.58 (8.5%) to $20.25 on volume of 7.36m shares;
- National Oilwell Varco (NOV) +1.39 (6.2%) to $23.76 on volume of 9.28m shares; and
- Nabors Industries (NBR) +0.47 (3.9%) to $12.6 on volume of 6.85m shares.
Currency Futures
Currency futures were hammered early on, with the Euro and the $A dropping more than a cent. That has stabilised now, and to paraphrase what I said about the USDX back when it was above 88: stick a fork in that beyatch, yo: that mufuh's done. A 2-day break below 85 would put it beyond all doubt, yo.
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 85.95 | 0.35 | 0.41 |
| Euro FX | 1.2918 | -0.0032 | -0.25 |
| Swiss Franc | 0.8296 | -0.0013 | -0.16 |
| Australian Dollar | 0.6589 | -0.0082 | -1.23 |
| Canadian Dollar | 0.7912 | -0.0068 | -0.85 |
| Japanese Yen | 1.0864 | 0.0109 | 1.01 |
| New Zealand Dollar | 0.5397 | -0.0072 | -1.32 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers declined on average by 2.1%. The fallout occurred as follows:
- General Electric (GE) -1.1 (5.83%) to $17.78 on volume of 109.21m units.
- Citigroup (C) +0.07 (0.83%) to $8.54 on volume of 214.46m units.
- Wal-Mart (WMT) -1.75 (3.04%) to $55.81 on volume of 29.67m units.
- IBM (IBM) -2.17 (2.56%) to $82.69 on volume of 8.93m units.
- Intel (INTC) +0.36 (2.58%) to $14.30 on volume of 86.6m units.
- Cisco Systems (CSCO) -0.09 (0.52%) to $17.16 on volume of 66.32m units.
- Google (GOOG) +3.86 (1.28%) to $305.97 on volume of 6.84m units.
- Fannie Mae (FNM) -0.05 (5.95%) to $0.79 on volume of 24.39m units.
- Freddie Mac (FRE) -0.05 (5.95%) to $0.79 on volume of 14.28m units.
Other Indices of Interest...
The Banks index (BKX) dropped -2.7 points (5.41%) to 47.23 points. Total volume traded in the 24 components of the index was 640.23m shares. Decliners outpaced gainers by 22 to one, with 22 decliners to 1 advancers. Declining volume was greater than advancing volume by 425.78m to 214.46m shares. The main decliners (in percentage terms) were -
- Suntrust Banks (STI) -3.72 (11%) to $30.04 on volume of 5.51m shares;
- Bank Of NY Mellon (BK) -3.12 (10.1%) to $27.63 on volume of 14.69m shares;
- Regions Financial (RF) -0.87 (8.7%) to $9.11 on volume of 10.5m shares;
- National City (NCC) -0.16 (7.5%) to $1.98 on volume of 40.72m shares; and
- Fifth Third Bancorp (FITB) -0.58 (7%) to $7.75 on volume of 8.77m shares.
The Semiconductor index (SOX) advanced 9.5 points (4.84%) to 205.65 points. Total volume traded in the 18 components of the index was 329.89m shares. Advancers outpaced decliners by 17 to one, with 17 advancers to 1 decliners. Advancing volume exceeded declining volume by 324.83m to 5.07m shares The biggest gainers (percentage-wise) were -
- National Semiconductor (NSM) +1.36 (13.2%) to $11.65 on volume of 14.67m shares;
- Marvell Technology (MRVL) +0.67 (11.7%) to $6.4 on volume of 23.61m shares;
- Advanced Micro Devices (AMD) +0.17 (8.1%) to $2.27 on volume of 22.74m shares;
- Broadcom (BRCM) +1.08 (7%) to $16.54 on volume of 21.65m shares; and
- Linear Technology (LLTC) +1.3 (6.5%) to $21.44 on volume of 8.35m shares.
The ChildKiller ("Defence") index (DFX) dipped -5.4 points (2.13%) to 248.15 points. Total volume traded in the 17 components of the index was 146.87m shares. Decliners outpaced gainers by 4.3 to one, with 13 decliners to 3 advancers. Declining volume was greater than advancing volume by 138.27m to 8.6m shares. The main decliners (in percentage terms) were -
- Gencorp (GY) -0.25 (8.4%) to $2.74 on volume of 0.46m shares;
- General Electric (GE) -1.1 (5.8%) to $17.78 on volume of 109.2m shares;
- Esterline Tech (ESL) -2.09 (5.7%) to $34.88 on volume of 0.44m shares;
- Boeing (BA) -2.03 (4.7%) to $40.82 on volume of 8.01m shares; and
- FLIRr Systems (FLIR) -1.15 (4%) to $27.56 on volume of 1.71m shares.
