…we had one heck of a pep talk at the half…but on the opening kickoff (overnight markets), we took it on the 20 yard line, fumbled and the punt returner dove on it…on the 2 yard line…it will be tough in the early going (short trading week) and injuries will make us rely on the second string. Hang tough!
TB is frustrated as he commented on yesterday that there is a total lack of action on the commodity crisis…and the credit crisis continues today with more rumors on Lehman even though they just raised capital. Do you know how many IPO’s were done in the first quarter? ZERO…worst on record! That is a sign of how tight things are..venture capitalists are grumbling. In Europe the bad news continues as housing worsens there too. If the CFTC doesn’t restore the balance between producers and speculators by putting limits on investment banks who are effectively hoarding…this is the Hunt brothers all over again only worse as they only did it with silver…this is the backbone of our economy: food and energy! They didn’t wait this long to do something then…and by their procrastination they have created a real mess (like Greenspan did with mortgage lending and ignoring banks capital). Now to institute controls and limits could cause serious losses to the bankers who wrote the commodities swaps and ultimately to the investors in the commodities index fund: mainly public pension funds! But if somebody isn’t hurt now hundreds of millions of Americans…and even globally will be slowly eaten up by the rising cost of survival. Yet TB continues to hear…yesterday it was Dennis Gartman on Bloomberg saying that the high commodities prices are simply a function of global demand…Dennis you are WRONG! That is only partially true! Today it was Peter Schiff (who now sounds like a fanatic) and Brian Wesbury) on how the Fed needs to tighten and tighten fast and if some (a lot according to Schiff) of companies are bankrupted so be it…utter insanity. Is the cure for malnutrition starvation??? We have taken leave of our senses.
At the risk of depressing readers as much as he is, look at the trend in returns over the past year:
(w/div reinvested) 12mos 6mos 3mos
Dow 30: -16.1% (-14%) -14.4% (-13.3%) -7.4% (-6.9%)
S&P 500: -15.8% (-14%) -12.8% (-11.9%) -3.2% (-2.7%)
NDQ 100: -6% (-5.5%) -11.9% (-11.7%) +3.1% (+ 3.2%)
Transports: -4% (-2.8%) +8.3% (+9%) +3.4% (+3.7%)
NYSE Energy: +16.9% (+19.7%) +7.6% (+8.8%) +18.3% (+19.1%)
Do you see how bad this is…unless you are in energy. Now look at bonds and note how the pattern is similar…after performing well they are not providing any protection again equity declines:
2 yr Tsy: +7.5% +2.1% -1.1% June: +0.09%
10yr Tsy: +12.5% +2.0% -3.5% +0.11%
30yr Tsy: +14.6% +1.0% -2.6% +0.12%
TIP ETF: +9.0%(+15.3%) +1.9% (+4.8%) -1.9% (-0.1%) +1% (+1.8%)
Look at that deterioration….and we all know what commodities prices have done…let’s hope we pull out of this very soon.
Overnight Global Markets (7:15am EDT) and Monday’s market highlights:
(Europe 10yr +5/16): 3 mo T-Bill 1.53%, 1 mo Bill 1.48 both unched and a flight to quality; 2 yr 2.59% +3/64; 5 yr 3.31% +3/32; 10 yr 3.95% +3/16; 30 yr 4.50% +3/8; 30 yr TIP 1.98% +7/16. Yield on 5 yr TIP 0.64% to the inflation rate, +1/8, while 10 yr is 1.4% +7/32. Stocks weak globally, no exceptions: UK’s FTSE -2.5%; France CAC 40 -2.6%; German DAX -2.10%; Nikkei -0.1%; Hang Seng closed (Shanghai -3.1% and Shenzhen -2.1%, -21% and -24% respectively since 6/6/08), Korean KOSPI -0.5%; Indian SENSEX -3.7%!!!…also fell 2.4% Monday! down 30% since 5/2/08. Globex very weak: DOW -111; SPX -14;What a time for this to be happening…with campaign rhetoric, and an Administration that has done absolutely nothing to regulate financial problems for seven years and is now in its dying days.
Data as of 7:15am EDT:
Dollar Index 72.18 -.28…on support, next stop the lows. Yen 105.33 weaker by .34…40 day m/a is 105.63 really looking like deleveraging.; Euro $1.5798 +.0043; Sterling $1.9975 +.0052. Aug Gold $932.80 +$4.80. Aug Crude $142.27. +$2.27. Bonds rallying modestly
Keep the faith!
TB
NDQ -28…coming back a bit since but not much…ouch!
