U.S. Markets: A Week of Inexplicable Events

You can excuse the average investor if, this week, he found himself and his thoughts drifting, perplexed and panicky. The inexplicable was found lurking everywhere starting with the normally spineless Democrats handing President Obama a historic legislative victory on healthcare reform, Sunday. Opponents feared that the $1 trillion price tag, and the disputable commandeering of 17% of the annual national budget was too ambitious, and that the increase in taxes necessary to cover an additional 32 million Americans health insurance would impede economic growth.

The stock market continued rising into the close; on Tuesday, up 102 points, on below average volume. The respective 17 month highs were 10,752.41 on the Dow Jones Industrial Average; 1,174.17 for the Standard & Poor’s 500 Index, and 2,415.24 on NASDAQ. Some call this a melt-up rally, a term describing a short squeeze in search of a pullback, which never comes, especially during end of the quarter window-dressing buying. If you don’t take any profits now at least buy SPY or QQQQ puts for portfolio protection in April.

But another inexplicable event occurred. Bloomberg reported that the 10-year US treasury swap spread closed negative for the first time ever. Ft.com/Alphaville provides a concise definition:

“A negative swap spread means the Treasury yield is higher than the swap rate, which typically is greater given the floating payments are based on interest rates that contain credit risk, such as the London interbank offered rate, or Libor. The 30-year swap spread turned negative for the first time in August 2008, after the collapse of Lehman Brothers Holdings Inc. triggered a surge of hedging in swaps.”

The negative spread widen on Wednesday accompanied by a below average 5-year treasury auction priced at a 2.605%. The 10’s and 30’s sold off by the close at 3.83% and 4.72%, respectively. The treasury auction calendar is stuffed with offerings as far as they can see. At some point, the market will lose its appetite for governments. It may be happening now, if so, buy puts on TLT.

Another head-scratcher Wednesday was Pimco’s bond maestro Bill Gross comments on CNBC professing his affection for equities: “Let's suggest the economy looks good, that risk assets— whether it's high-yield bonds or whether it's stocks—have a decent return relative to the potential of declining bond prices," he said in an interview. "I'll go with the stock market."

We also learned what we already knew when S & P lowered Portugal’s credit rating, that the western world is broke. Before I forget, this day also included Google (GOOG) and Go Daddy quitting China, the US accusing China of currency manipulation, and financial regulation reform disappearing into a Washington DC black hole.

But enough about inexplicably strange; let us return to good old-fashion butt-ugly economic data. Negative housing data again filled the landscape pointing towards a funky economy in 2010 for the average citizen. The Mortgage Broker’s Association purchasing index, ending March 19, rose 2.75% while its refinancing index fell 7.01%. The average 30-year mortgage increased 10 basis points to 5.01%.

February new home sales fell 2.2%, to an annual rate of 308,000. Two years ago, the annual rate was above 600,000 homes. Supply swelled to 9.2 months while the median price of a home rose 6.1% to $220,500 and the average price up 5.1% to $282,600. The first-time home buyer tax credit ends in five weeks.

Finally, the US Census Bureau, 2009 State Government Tax Collection Data was released. State revenue was down in 2009 versus 2008 some $66.9 Billion dollars. Fourteen states saw their tax revenue fall 10% or greater. The fourth quarter figures are available at the end of March.

GOOD PEOPLE OF ATS, ECONOMIC RECOVERY HAS ARRIVED!!!

reply to post by TheCoffinman


the Market (DOW, NYSE) is approaching 11,000 (either tomorrow 26 March or Monday 29th)because we are captivated by the 'Promise' of a revived economy, despite the vultures of WallStreet, banks, hedges, investment houses...

the health care reform is the new growth arena, there will be 10s-100s of thousands of new opportunities for all levels of health providers & personnel all across the board,

from new local clinics as an adjunct to GP doctors & staff, to local 'wards' that will replace costly hospitals for the masses, the vanguard of 20,000 health assistants was approved in the Reconciliation Bill (56Y-43N)
there will be thousands employed as caregivers and other health related duties which up until the economic crises were neglected or just under staffed fields of endeavor.

Yes there will be 2 distinct classes of health care providers, but ALL ships rise with an incoming Tide... & that tide is the HCR Law along with the $1Trillion in growth over the next decade



there's no surprise to my sensibility... this is the prelude to the 2012 change in humanity, the paradigm shift, from wars & capitalist greed, to actually helping & healing our neighbors.
greed is out, deed is in

I just can't buy the idea that greed is out and deed is in. That truly sounds like a sucker move.

Do you think the Democrat government, which likes to dis-empower you and control you, is suddenly going to manipulate the stock market up so everybody gets easy money and lives happily ever after? LOL!

No. This market is in for yet another massive correction before it resumes steady growth. The little people don't win so easy. The big people tease them. We have yet to see the bottom of this cycle.

Originally posted by St Udio
reply to post by TheCoffinman

 

the Market (DOW, NYSE) is approaching 11,000 (either tomorrow 26 March or Monday 29th)because we are captivated by the 'Promise' of a revived economy, despite the vultures of WallStreet, banks, hedges, investment houses...

Don`t you mean, we are captivated by the "promise" to continue propping up a money system that will never work, and will only make things worse when it does fall?

the health care reform is the new growth arena, there will be 10s-100s of thousands of new opportunities for all levels of health providers & personnel all across the board,

Yep, it will be a "growth arena" alright, just watch those government offices grow. As for those 10s-100s of thousands of new opportunities, this makes it sound like a health care funded economy. So, instead of being called a nation that manufactures products, what will we be called then? A nation that manufactures health care?

from new local clinics as an adjunct to GP doctors & staff, to local 'wards' that will replace costly hospitals for the masses, the vanguard of 20,000 health assistants was approved in the Reconciliation Bill (56Y-43N)
there will be thousands employed as caregivers and other health related duties which up until the economic crises were neglected or just under staffed fields of endeavor.

Ok, this is fine, but, see my statement above. What ever happened to putting a few billion dollars into the growth of our products manufacturing? Health care isn`t the only area that needs a boost remember.

Yes there will be 2 distinct classes of health care providers, but ALL ships rise with an incoming Tide... & that tide is the HCR Law along with the $1Trillion in growth over the next decade

Yep, that`s a good look at it. We will be able to take care of the thousands who are still without jods and no money. We will be able to watch the manufacturing side of our economy die off, as we watch the health care side grow. Logical thinking.

there's no surprise to my sensibility... this is the prelude to the 2012 change in humanity, the paradigm shift, from wars & capitalist greed, to actually helping & healing our neighbors.
greed is out, deed is in

Yep, no surprise in that logic. So, by your last statement we can safely say that humanity will grow for the good by taking something away from one person, then giving to another? By doing this humanity will grow?

As I said before, no surprise in that logic.

[edit on 25-3-2010 by FiatLux]

reply to post by TheCoffinman



Now this is what I call an Inexplicable event..... Wish I would have been there, heck here's another thread for ya, I'm feeling generous....

More than $100,000 spilled out the back of an armored car in Whitehall yesterday, and most of it is still missing.

Police urged anyone who couldn't resist temptation to reconsider before officers come calling.

Whitehall Sgt. Dan Kelso said a Garda armored car was eastbound on E. Broad Street at 8:20 a.m. yesterday when a bag of cash fell from the back into the intersection at Hamilton Road.

"It hit the ground and split open, and there was money all over the place," Kelso said.









www.dispatch.com...

[edit on 25-3-2010 by freetree64]

reply to post by freetree64


pffft i hope a thousand people took cash out of that bag.. i would love to see the police try to retrieve any of it. this day and age with the tensions at an all-time high like it is, its got the potential to be an explosive siutaion..

Cabaret Voltaire posted on 25-3-2010 @ 09:34 TWO STARS so far


I just can't buy the idea that greed is out and deed is in. That truly sounds like a sucker move.

Do you think the Democrat government, which likes to dis-empower you and control you, is suddenly going to manipulate the stock market up so everybody gets easy money and lives happily everafter? LOL! [...]

...Ahem... no, the Dems, the PPT, the Gov't will not be manipulating the market upward, the strategists who guage the mood and condition of the people can see that there is an opportunity for profits & wealth in the health sector and in many of the associated DOW components which are the businesses who will facilitate in this retrofit of the American economy. ... and more yadda yadda.....

FiatLux posted on 25-3-2010 @ 10:22 ONE STAR so far

Hey, i do not get offended by being youse guys punching bag.

but there's too much to outline, dissect, counter/inform... the spin on the substance makes it clear you won't get convinced by me or a bevy of lawyers clattering away.

Yep, that`s a good look at it. We will be able to take care of the thousands who are still without jods and no money. We will be able to watch the manufacturing side of our economy die off, as we watch the health care side grow.

Am i to take it that you would prefer and even go out of your way to get a dull, dreary, monotonus, job in the Manufacturing Industry (that our fathers wanted to climb away from)... come on ->
most all the USAs manufacturing has already gone overseas...
we are a Service Economy not a industrial /Manufacturing economy.... except for 'building' those big macs, which is actually classified as a industrial application by Government


i am recognizing the first glimmers of a national push to accomplish 'something',
it will not get as parabolic as the race-to-the-Moon, which you've never experienced the public unity and aspiration of the whole nation, as we all felt mobilized in a great cause ~sorry bout that~ but perhaps this time, once the predator capitalists and the vulture banksters and financial elites are given a real short leash....then perhaps the real HCR can blossom



thanks,

[edit on 25-3-2010 by St Udio]

OT:
St Udio posted on 25-3-2010 @ 06:51pm NO STARS so far

FiatLux posted on 25-3-2010 @ 10:22 ONE STAR so far


Hey, i do not get offended by being youse guys punching bag.

but there's too much to outline, dissect, counter/inform... the spin on the substance makes it clear you won't get convinced by me or a bevy of lawyers clattering away.

I`m glad youse weren`t offended, but it`s hard to be convinced by youse guys logic.

Am i to take it that you would prefer and even go out of your way to get a dull, dreary, monotonus, job in the Manufacturing Industry (that our fathers wanted to climb away from)... come on ->
most all the USAs manufacturing has already gone overseas...
we are a Service Economy not a industrial /Manufacturing economy.... except for 'building' those big macs, which is actually classified as a industrial application by Government

I worked for 35 years in the manufacturing industry and never found it dull, dreary or monotonus. So, then there is something wrong with being a laborer? And the way you put it, i can see why our manufacturing industry is going down hill, as you would rather have a country whos entire labor force is made up of nothing but management workers wearing suits and ties. Again, I stand in aw of your logic.

i am recognizing the first glimmers of a national push to accomplish 'something',
it will not get as parabolic as the race-to-the-Moon, which you've never experienced the public unity and aspiration of the whole nation, as we all felt mobilized in a great cause ~sorry bout that~ but perhaps this time, once the predator capitalists and the vulture banksters and financial elites are given a real short leash....then perhaps the real HCR can blossom

Yes, they are "accomplishing something", and I am recognizing it as them taking away what little fruits of labor people try and save just to hand it to someone else. As I don`t mind giving to charities that may help others with hospital bills when I can afford it, but when someone takes my money away without my ok, and at times when I am not able to afford it, then they have crossed a line that they may regret in the end.

thanks,

Oh no, thank you.

The whole idea that we are all going to be healthy and avoid pain and death is just insane.
Are we going to stop spending on missiles and tanks to afford healthiness?
How healthy is it to keep giving stuff away to the bad pets for free?
Why don't we neuter and spay the bad pets?
What has happened to survival of the fittest?
Are we going to health our way to success? Are we all going to grab each other and cough? I want to be a gynecologist!