To recap:
On Monday we were down 600 points, Tuesday down 200, Wednesday up 600 and Thursday the Dow is up 200, at this point.
We’ve ended up in the same place, so far, that we began on Monday.
Still: volatility. Mixed with emotions.
BZ
Today is Wednesday.
Today, NYSE stocks “shot up” 600 points.
It’s being termed the “best day” since 2011.
One possible reason for today’s performance may be:
In addition to an oversold bounce, some analysts also attributed the gains to comments from the Fed’s William Dudley that a September rate hike looks “less compelling” and a strong durable-goods report.
Monday was termed the “worst day” since 2008.
And here’s another interesting point:
U.S. economy looks better than the stock market
The recent American stock market tumble stands in sharp contrast with sentiment about the U.S. economy.
Further evidence of that was received on Wednesday. The government said orders for big-ticket items like appliances and cars jumped by 2% in July from June. That was significantly more than economists had anticipated.
Clearly, you’d best buckle up for the continuous stock market rollercoaster ride. Because I don’t think we’ve seen the end of this at all. Down up down up down up.
This may be the start of a “new normal.”
On the other hand, don’t take a cavalier attitude. Don’t place all your rocks in stocks. Diversify. And moreover, be prepared for the Mysterians to step in at any time and kick the slats out of the stock market.
BZ
[Apologies for being late with today’s post; I had to go qualify at the range before the temperatures reached a post-apocalyptic 100-degrees. -BZ]
Yesterday, Monday, the stocks dropped over 1,000 points then rollercoasted a bit until, at the close of the day, they were down 588 points. That’s some pretty serious shite.
Some people were saying that, because of it, Janet Yellen did some yellin’ of her own, to the tune of possibly considering a QE 4.
Today, Tuesday, the market rallied a bit until, again, the close of the day when selling took precedence and the market dumped its earlier gains, down over 200 points to 15666.
Get it? That evil 666.
Time for pants-shitting-hysteria, or is this something of a correction?
I’m favoring the latter, for the reasons I explained yesterday.
The NYSE tried self-correction and it began to work. Stock sharks picked up some good buys. Then the Mysterians stepped in and kicked the slats out of the stock market.
Above, Mysterians step in and kick the slats out of the stock market.
That’s as sage and cogent an amount of analysis as I’ve heard from anyone today attempting to explain the behavior of this week’s stock market.
BZ
P.S.
China is not done with us yet.
China is in terrible shape.
Essentially, the feelings about the economic turmoil in China is having its way with the NYSE and the Dow.
The Dow dumped over 1,000 points in the first five minutes of the market opening on Monday the 24th. The numbers rollercoasted and the day ended at -588.
Nine “big” stocks today, including Walmart, Dupont and Apple, went down 20% on Monday. That’s a pretty large chunk of cash in a rather disconcerting event.
So if you’re the Fed, what’s to do?
Janet Yellen raising your rates? In September? Some are saying — Barclay’s — that this plan may be pushed back to March of 2016.
Others, like ZeroHedge, are indicating there may possibly be a QE 4 in the offing.
From Tyler Durden:
Forget Rate Hikes: Bridgewater Says QE4 Is Next; Warns World Is Approaching End Of Debt Supercycle
That’s where we find ourselves now—i.e., interest rates around the world are at or near 0%, spreads are relatively narrow (because asset prices have been pushed up) and debt levels are high. As a result, the ability of central banks to ease is limited, at a time when the risks are more on the downside than the upside and most people have a dangerous long bias. Said differently, the risks of the world being at or near the end of its long-term debt cycle are significant.Leading to the conclusion that “We Believe That the Next Big Fed Move Will Be to Ease (Via QE) Rather Than to Tighten“
Today meant: households just saw about $1.8 trillion dollars of wealth disappear.
And what about Mr Obama, his administration, and China itself? Donald Trump said:
“I’m the one that says you better start uncoupling from China because China’s got problems, and they have big problems, and they’re bringing us down.”
The US is more dependent on China’s economy now than when Obama became president. Our trade.deficit with China is on track to be more than double what it was in 2009. US trade with China occupies a greater percentage of our total foreign trade than it did then. Exports to China make up a greater percentage of our total exports than they did six years ago. Chinese holdings of our Treasury Bonds have almost doubled since 2009, and direct foreign investment by China in the US has doubled under Obama.
“Experts” say that the US is staying at about a 2% growth scenario. Some people say that’s a load of crap. It’s worse. Many are pointing their fingers at China for the entire schmeer. Some people say that too is a load of crap, and can be traced back to George Bush and his TARP program, the beginning of the massive, massive bank and industrial bailouts continued and exponentially increased by Obama.
Some people say those entities should have been allowed to fail and, having done so, we would now be mostly out of our own fiscal woods and much more readily able to deal with China and Greece, in terms of strength and resiliency.
That said, what’s ahead?
I’m listening to Gordon Chang.
And he says: you ain’t seen nothing yet from China in terms of fiscal problems. Further, the Chinese government is ill equipped to smooth things out. Like because they’re, you know, Communists and all. Which means their ability to “correct” is, well, not good.
In the meantime, Hillary says — in response — to increase capital gains.
Sure.
QE 4, here we come?
BZ
People across the United States seem to want a $15 per hour “minimum wage.” This is literally twice the current federal minimum wage.
They don’t just want it, they are protesting (bankrolled by organized labor) and in some cases being arrested for it.
These persons believe that working at, say, a McDonald’s should be offered what is termed a “living wage.” That is, a person should be able to possess a job at a McDonald’s and live on that wage, raise a family.
I suppose, in a world dotted with purple skies, a $15 “minimum wage” is a good place to start, coupled with free health care and various forms of additional welfare.
The problem becomes three-fold, however:
1. Few consider the actual consequences of various acts, and
2. Who pays and how much?
3. What are the societal results?
In terms of unintended or unforecasted consequences, they may already be occurring. From the BusinessInsider.com:
Wal-Mart suddenly closed 5 stores and laid off thousands of workers and no one knows why
by Hayley Peterson
Wal-Mart suddenly closed five stores in four states on Monday for alleged plumbing problems.
Some employees believe that the stores were closed because of worker protests for higher pay.
Employees of the Pico Rivera store were among the first to hold Black Friday protests in 2012.
“This is the first store that went on strike,” an employee told CBS Los Angeles. “This is the first store in demanding changes for Walmart.”
I don’t doubt for a moment that Walmart is closing these stores because they’re uninterested in catering to those persons seeking to fleece the company, by either wages or unionization. They are of sufficient size that they can take the fiscal hit. For a time.
Walmart is the largest single employer of persons in the United States, at 2.2 million. Leftists despise “big” and they despise “corporations,” but fail to make the links between Capitalism, profits and freedom. They fail to understand the concept that, as costs increase, businesses either pass these costs on to the consumer or they fail. When businesses fail they stop providing jobs. To you and me, this is a simple and obvious concept. Not to Leftists, who believe that businesses have an obligation to lose money if such loss “benefits” certain strata of persons, as a societal onus.
Further, unionization is a desired outcome. When unions flourish, the first thing they do is enable a closed shop and force union dues. When you’re an undersea welder making $26 to $50 an hour, or a port crane operator making $82.15 an hour in NYC, you can pretty much afford your dues. But with a cheeseburger icon prodder or a burger wrapper making the desired $15 an hour, dues are going to hurt. And you’re not going to get a choice.
In Seattle, a bastion of Leftism, businesses are shuttering doors in anticipation of the minimum wage boost. Why? Because small businesses can’t, literally, afford it.
Further, just why is it that commuter airline pilots make roughly $15 to $20 an hour and — yet — unskilled workers pushing the CHEESEBURGER icon at McDonald’s expect to be paid a similar wage rate? I find that a ridiculous disparity on any number of levels.
Let’s be frank for just a moment, shall we?
Minimum wage positions were meant to be nothing more than introductory jobs, easing new workers into the ranks of the employed, getting them used to punching a time clock, appearing for work on time, being dependable, responsible, answerable to a higher authority, learning a preliminary skill, basic societal and business competence.
Let us also admit that not everyone was issued precisely alike from the factory. Some persons — and I’m sure you know your fair share — simply don’t have the inclination or the capability to perform certain jobs. In other words, they’re blithering idiots. Perhaps it’s your brother, your nephew, a co-worker or even your boss. You wouldn’t trust them to clean your toilet reliably and with acumen, much less what they’re doing now. Unless they are doing nothing.
Therein lies another rub. Actors ask: what is my character’s “motivation” in a certain scene, movie or play? There exists a strata of human clotted clag that simply lacks motivation, goals and aspirations. They are perfectly satisfied with doing nothing, accomplishing nothing, and expect to be paid and comforted for it. These people are drones. Their numbers are increasing daily because, for no other reason, various governments encourage such behavior — such as the federal government and your state government. In my case, Fornicalia. Fornicalia is a Drone’s and Illegal’s Paradise. It is also a psychologically-damaged and developmentally-disabled magnet.
Many people now say, however, that these unskilled workers are working two or three like jobs in order to provide for their families. Taken off these jobs or kept at a lower wage, these workers would actually cost the taxpayer more than if businesses would simply ante up to a $15 per hour scale.
This is a false argument.
Minimum wage jobs were meant to be introductory jobs only, not jobs for life. The wages for these jobs were and are commensurate with the skills and education necessary to perform them. I made $5.79 an hour as a deputy sheriff in Fornicalia in 1978, putting my life at risk every day. I considered myself lucky to have the job at all. And yet, at the time, the minimum wage was $2.90. There was no way I could afford a house in that coastal county — they were beginning at $100,000. Way over my capability to purchase.
So guess what? I didn’t purchase a house. I didn’t purchase an ATV, a motorcycle, a recreational vehicle, a motorcycle, and I didn’t carry a balance on my credit card. And yet, oddly enough, I survived and then thrived because I stuck it out. Yes, ladies and gentlemen, I stuck it out. I refused to extend myself and place myself into a budgetarily-precarious position.
Self control.
What a concept.
So pass that $15-per-hour minimum wage, Leftists, and let’s just see where it gets those workers it was meant to “protect.”
It is not business’s job to lose money.
BZ