The Market Ticker

Well let's see now...

Oil over $80
Employment reasonable (if slowing somewhat)
Consumer Confidence (if you listen to the 10:00 AM report Friday) was ok
Retail sales reasonable
Business spending reasonable

Rate cut? Hmmmmm... me thinks maybe not.

And Bucky thinks maybe not too. Think he's sending a signal - "you cut rates you stupid bastard and the inflation monster is going to come out of the closet and eat you"?

I think so.

And by the way, unlike the monster that you thought was under your bed when you were a tyke - this one is real!

So where'd this attempted rally back come from? The XLF - Financials. Heavy volume showing up at about 1:30 CT - one good spike, but it was sufficient to lift the SPX.

Justified? Hmmmm... me thinks not. But that's not my decision - that's the choice of buyers and sellers in the market, and the market says "yes" - for today.

Ok. Let 'em get a nasty surprise. This smells like a lot of people are pretty confident that the broker/dealer earnings this week won't be a complete bust, and the PPI won't come in hot tomorrow morning.

What if either of those wishes turn out to be just that?

Got a Hard Hat?

Will rate cuts help? No. Consumer mortgage rate resets will still happen, and will still reset up. MEWs are still over, as house prices are coming down or remaining stable at best. Take the hundred billion a year out of the consumer's pocket that this will remove with absolute certainty and then tell me how it all works out ok..... I'll be waiting for that one.

So what's to like here going into tomorrow? Absolutely nothing, and Equities appear to have priced in two "realities", both of which cannot be true at once:

• The economy is slowing and a recession is coming but The Fed will save us.
• The economy is just fine but The Fed will save us.

The prescription for a coming recession would indeed be rate cuts. But - the prescription for the economy being fine but rapidly rising commodity prices is actually rate increases, because the key there is that with commodity price increases you get inflation, which inevitably shows up in everything, and once that cycle starts to get out of control it is very difficult to shove back into the bottle.

So which is it?

This spells huge disappointment, and considering that the entire retrace of the plunge in August has been on the back of "The Fed Will Save Us", this one could be epic.

Oh, and over in England? They've got a full-on run on the bank over there with Northern Rock! But its all contained eh? Honest? Hmmmm..... yeah, its contained all right - to the Planet Earth!

Price action today? Down, but muted. Volume was extremely light - lightest of the year - nobody's committing anything in front of the Fed tomorrow. Lots of "burn 'em" games in both directions but no follow-through either way. It was quite amusing to watch, actually, as the market see-sawed backed and forth. Difficult to make money on though because the moves weren't big enough to really generate a good profit, but it did give me a decent place to stick some collars on, so heh, the purpose of the day was served.

Tomorrow, something violent this way comes, and we'll have economic data to go with it in the morning. Oh boy.

Oh boy....

Well, let's start with consumer non-confidence.

"Consumer confidence tumbled to its lowest point in nearly 1 1/2 years as a deep housing slump and a credit crunch made people more worried about the country's economic health as well as their own."

I'd say so. 71.1, down from 89.3 last month?! Holy shit! Oh, and you don't want to know what the expectations component was. Ok, you do - 14. Yeah. 14. 50 is "even". Ow.

Oh, then at 10:00 we got a different consumer confidence index - older - that came in ok. Of course the market ignored this one, which was more current, and paid attention to the second.

Remember what I've said about the Equity Markets riding the short bus? You saw that today - in spades. Just wait until they wake up. Hoh hoh hoh Merry Grinchmas!

Oh, and you know the huge pop that GM got yesterday? Hope you sold into that shit. Why? Well, it seems the UAW thinks they're a great strike target if they don't get what they want.

"United Auto Workers President Ron Gettelfinger picked General Motors Corp. as the union's strike target after arguing with the automaker's North American head over funding for a proposed union-run retiree health fund, people with knowledge of the situation said."

What a bunch of crybabies.

In the interest of full disclosure, I have absolutely zero love for the UAW. Zero. They've been responsible for their own problems, along with a big part of what ails GM. When you buy a GM product you actually pay more in the cost of that car or truck for the UAW Retiree's health benefits than you do for steel!

Now perhaps its just me, but the last time I checked this is part of the "debt slave" issue, where our nation has turned into a bunch of plasma-tv-buying idiots who think that Big Brother (whether in the form of a Union or government - oh, is there a difference? - will take care of you when you get old and gray.) No personal responsibility for your life, for your investments, for anything. Its all someone else's fault - and responsibility.

Remember yesterday I said that the UAW's (and GMs) intent was to offload their health care costs to the US Taxpayer? Guess what - here comes Hitlery with Round #2! Told 'ya so.

Oh, and Northern Rock - a huge British housing lender - came dangerously close to imploding. The Bank of England bailed them out with emergency funding:

"Northern Rock shares plunged as much as 26 percent to a six- year low after the company said today the central bank will provide an unspecified amount of credit. The Newcastle, England- based bank is the U.K.'s third-biggest lender by gross mortgages with loans worth 17.4 billion pounds ($35 billion) as of June 30."

Unspecified eh? Why don't I like the sound of that?

Oh, Hovnovian says that the bottom of the housing market is "very near". This is why you're kicking off a "huge sale" on your properties this weekend, right? Because the bottom is "very near", so you're just throwing money away? Heh Ara - your nose is growing you TOOL!

Retail sales printed kinda bad..... up 0.3%, ex-autos down 0.4%. But this really isn't that bad of a number. Problem - the street wanted either a really BAD number (big rate cuts) or a really strong number (no need for a cut; Chucky is doing great!) They got neither.

The other problem in the numbers is that import prices went down net-on-net, but from China, they went up. This is a potentially huge problem because we've been exporting our inflation to them for years - now, as it always does, its starting to boomerang on us. This is likely the start of a trend, and it will flow through directly to the lower end of the consumer spectrum - everything at WalMart, etc. The consequence of this coming back on the lower to middle end of the consumer spectrum just as we start to see real softening in the consumer is likely to end very badly for us.

So the market did a big fat..... zero.

Yep.

Were FedsDay not two trading days off I'd say that the technicals are bearish, because they are. But - the Fed can do damn near anything to the markets. Hell, they can cheat like they did last time! They can tip The Pigmen to what they're going to do. Would they? Why would I believe they wouldn't?

In any event here we sit with an assload of economic data due early next week and of course the FOMC, along with the primary broker/dealer's earnings reports. Goldman, Lehman, Merrill, Bear. That ought to be fun.

We'll see if Bernanke and friends have the balls to do the right thing. The Paul Volkler thing.

Here's your evening technical.... enjoy!

First, here is our jobless claims numbers...... 319,000..... up four thousand. But.... 4-week moving average down 1,000.

Hmmm..... and the futures go.... up?

Cognitive disconnect guys. You want a rate cut and bake it into the cake eh? What makes you think you're going to get one given this "high frequency" data? People think that perhaps retail numbers will be strong too?

Yeah, ok. Let's see - data that supports a rate cut, the market goes up. Data that says "no rate cut", the market goes up.

Is it just me or does anyone else see the same thing I do here - that people are cheering their book, trying like hell to unload to their "audience"..... after which, well.....

Oh, the DJ Business Barometer came in down 0.2%. Hmmmm.... down eh? Cccccooooonnnnnnttttrrrraaaccctttiiioooonnnnn?

And what did I saw a few months ago about energy?

Eight handle on oil! And did we get it today? Oh hell yes!

Cut rates eh? Uh...... no. Into strong commodity prices, decent employment numbers, ISM isn't awful, retail sales decent (but not great)? Hmmmm... how?

My guess? Discount window gets cut again. FedFunds? Not a snowball's chance in hell is my "best guess", with an outside chance of a 25bips cut - both of which won't satisfy the market.

1490 held. That's the important level from the perspective of "is the market going higher." I ain't buying it - we didn't even get through it intraday! So from where I sit the 1489.58 today was a gift, because it gave you a gorgeous (and very low risk) short entry point - if we go over 1490, what's your risk? Just the gap in the morning (assuming we get one); if we roll here you win big, if not, you're out in the morning. Works for me.

Countryslide got a big pop going into the close; no real news behind that I can find. Whassup with that one? Hmmmmm..... this morning they had an announcement, so why in the last hour and a half?

Oh, and Hovnavian! They're doing a "huge sale" on new homes. Hmmmm.... why do I think they're out of money and need liquidity - badly?

Anyway that's what we got - here's the technical; this one's suitable for all audiences..... :)

Have a wonderful evening!

Put the kids away again.

The insanity of The Pigmen has to be seen to be appreciated.

And today, we saw it on display.

Full-scale.

Folks, overnight the dollar went totally to shit. This is a really big deal and those who ignore it deserve what they get.

What are we going to get?

The complete and utter destruction of the economy of this nation.

BEN BERNANKE, YOU NEED TO FUCKING RESIGN RIGHT NOW. RIGHT GODDAMN NOW.

You have an OBLIGATION under the law to manage INFLATION. It is your PRIMARY LEGAL RESPONSIBILITY.

NOT "Inflation expectations".

ACTUAL INFLATION!

Allowing The Dollar to go straight in the shitter, which you are doing, is a pure abdication of that responsibility. It is an active act of fraud, deception, and destruction aimed at the American Economy, the American Consumer, and American Business.

Cut this shit out right now before we provoke foreign capital flight and our nation's economy goes straight in the fucking toilet!

You think its not starting?

THE HELL ITS NOT!

Look at our bond market! Look at foreign custody holdings! THEY ARE DOWN! You know why?

Because you assholes at The Fed have devalued those foreign holdings by ONE FIFTH OF THE ANNUAL COUPON ON THOSE TREASURIES IN THREE FUCKING DAYS!

CNBS, of course, fiddles while Rome Burns.

The Pigmen - including CNBS - are running around handicapping not whether the Fed will cut but by how much.

As they talk, the Dollar craters.

You need to take a lesson from The Bank of England, which has grown a big fat pair of STEEL BALLS and told their speculators to fuck off:

"The key objectives remain, first, the continuous pursuit of the inflation target to maintain economic stability and, second, ensuring that the financial system continues to function effectively, including the proper pricing of risk."

I can't believe that fucking England gets it and we do not.

Time to buy The British Pound? It sure sounds like it. Un-fucking-believeable.

Paulson starts spouting off too. How about telling your buttbuddy Bernanke to quit fucking around and defend the dollar eh Hank? You DO know that your Pigmen Buddies are going to get assfucked if the dollar collapses, right? Yes they are! Don't you believe for a second they won't, because you know better.

"He said the uncertainty in credit markets would last longer than the turmoil that followed the Asian crisis and the Russian default of the 1990s or the Latin American debt crisis of the 1980s."

The "uncertainty" is going to last longer because you and your buddies at The Fed are trying to bail out your Pigmen friends! The problem here is that in the process of dicking around you are imperiling the entire American economy - and not just in terms of a recession either - a potential full-on DEPRESSION.

Goddamn it, cut that shit out!

To the US House, Senate, President Bush - Goddamn it, stop this shit before Ben, Paulson et.al. DESTROY this nation's economy!

Your legacy is being written RIGHT NOW. As the dollar swirls the bowl you think it is all ok because "the stock market looks all right and is 5% off all-time highs."

In the meantime everything we buy in this country is going up in price at a double-digit rate. Your "official" inflation statistics intentionally ignore food, energy, and actual housing prices and have for years, which are REAL things that REAL people all have to buy. In REAL terms the middle class has LOST PURCHASING POWER for SEVEN STRAIGHT YEARS.

Meantime, these assholes backdoor rape the American Economy while protecting their fucking bonuses, AND The Fed waives Fed Reserve regulations intended to PROTECT THE BANKING SYSTEM!

What does THE WORLD think of this?

The world thinks you're all a bunch of fucking morons which is why The Dollar is going down the bowl - FAST.

Guys, you need to - right now - call, write, fax your Senators and Representatives. NOW.

Here's the letter I sent on the matter - to both Senators and my Rep.

And here's the video rant to go with it...

Oh, on the market? It did nothing today. See last night's Ticker for the technicals - D-day was pushed to tomorrow with what was literally a flat day.

I will open with this - those of you who are asshats about this nation, about the United States going after the fuckers who believe that you get to Heaven by killing innocent men, women and children, about our attempts to rid the world of this sort of vermin: You are welcome to renounce your citizenship any time you'd like.

Ok, enough politics.

ICSC Chain Store Sales came in up 0.3%, Redbook up 1.1%. No big shocker there. Back to school in there big, which actually is quite negative, as it was "shifted" which means it should have been stronger. The market didn't seem to think much of it one way or another however; I don't think its a big mover either.

The economic impact (that be the "R" word again) will show up in the next few weeks and months; it takes time for ripplethrough to show up in the economic numbers.

And this, by the way, is something that a lot of folks who are on the "bearish" side need to remember - along with the Bulls: Recessions can only be called in retrospect, not prospectively, and both GDP and economic results are measured in the rear view mirror.

Trade Deficit came in inline, $59.25 billion ($59.2 was expected)

Oh, and then Ben speaks in Germany, and his "prepared speech comments" say that global interest rates need to and will go higher.

Heh Mr. Equity Market who thinks that rate cuts will save your bacon -

YOUR ROOF IS ON FIRE!

So what was this rally about this morning?

Well, let me put it this way:

• The FX markets have an IQ of about 130
• The Credit Markets have an IQ of about 100
• The Equity Markets ride the short bus, and on a good day have an IQ of about 70.

Really.

You have to be amazed at people buying into this bullshit. There's nothing - and I do mean nothing - that came out today that suggests that "all is ok." We had two more hedge funds lock down redemptions ("Jolly Roger"?! Boy, that one was well-named!), the Commercial Paper market has thrown out all of the fraudsters who stuffed their conduits with derivatives (as well they should), and there's still no market for liar loans (as there never should have been) in the mortgage space.

Oil. OIL! We're talking about pushing that 8-handle. Closed over $78. Yeah. Oh, Ben wants to cut rates and send the dollar down FURTHER eh? $150/bbl oil anyone?

Cuntryslide is looking for yet more money. Apparently $2 billion wasn't enough. Told 'ya so. I believe this will kick off repricing of the former $2b deal, which will turn that preferred offering into "death spiral" financing, which will ultimately lead to the destruction of common stockholder equity.

This is so familiar a pattern; it happened to dozens of firms in the "tech wreck."

Yet hope springs eternal, and the "buy the dips" mentality is alive and well. For now.

"U.S. stocks rose for the first time in three days on speculation consumers will weather an economic slowdown and spur profit growth."

Be careful becoming a part of it kids. Credit Crunches don't go away in a week or a month, they don't leave quietly, and they don't leave equities unscathed. Further, we have almost certainly topped in the profit growth cycle, which couldn't have come at a worse time.....

Recessions aren't kind to equities either, and we're going to get one. A nasty one.