We haven't gone anywhere on the Dow, S&P or NYSE since early March and we've lost 6% on the Nasdaq and 8.3% on the Russell yet, to hear the mainstream media tell it – there's no better time to invest.
Nazi propagandist Joseph Goebbels said: "If you tell a lie big enough and keep repeating it, people will eventually come to believe it." Clearly that's the template being used today by the MSM and even our politicians these days.
As you can see from Dave Fry's SPY chart, we got a very exciting pop into the close on Friday for no particular reason and now, for no particular reason the Futures have given back most of those gains. But don't worry, into the open, while the volume is still low, it's sure to get jammed back up again – just in time for the Funds to dump their shares on the retail crowd.
We don't care IF the game is rigged, as long as we can figure out HOW the game is rigged and play along. This morning I posted to our Members that Silver Futures (/SI ) were a long at $19.50 and that Gasoline Futures (/RB) were a short at $3. Already silver hit $19.65 for a $750 per contract gain and gasoline fell to $2.985 for a $630 per contract gain – and the Egg McMuffins are paid for!
We KNOW it's rigged and we KNOW the moves were fake so, when they hit good resistance points, we knew it was very unlikely they'd get past them. If they did get over the resistance, we'd take small, quick losses and be done with the trade. Of course we went over the news and the data from around the World to make sure our premise…
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $360.2 billion, a decrease of 0.5 percent from the previous month, but 4.8 percent above June 2009.
Total sales for the April through June 2010 period were up 6.8 percent from the same period a year ago. The April to May 2010 percent change was revised from -1.2 percent to -1.1 percent.
Retail trade sales were down 0.6 percent from May 2010, but 5.0 percent above last year. Nonstore retailers sales were up 12.1 percent from June 2009 and gasoline stations sales were up 8.8 percent from last year.
The only believable number in the report is gasoline sales. Otherwise the problem is in Census Bureau methodology.
The advance estimates are based on a subsample of the Census Bureau’s full retail and food services sample. A stratified random sampling method is used to select approximately 5,000 retail and food services firms whose sales are then weighted and benchmarked to represent the complete universe of over three million retail and food services firms. Responding firms account for approximately 65% of the MARTS dollar volume estimate.
The methodology misses stores that went out of business and have no retail sales. Circuit City is a prime example but also note that thousands of small strip mall stores are now shuttered as well. Some of that volume went to the surveyed stores making it appear sales went up.
The only accurate way of computing retail sales is to look at state sales tax data. Even then, tax data can be misleading because one needs to factor in changes in tax policy, notably states increasing sales tax rates.
For example, a rise in the sales tax rate from 7% to 8% would result in a 14% increase in sales tax collections (all other things being equal).
The Rockefeller Institute reports "The growth in state tax revenues is not an indication of broad state fiscal recovery, but is mostly driven by legislated changes [massive tax increases] in two states — California and New York."
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for December, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $353.0 billion, a decrease of 0.3 percent (±0.5%)* from the previous month, but 5.4 percent (±0.5%) above December 2008. Total sales for the 12 months of 2009 were down 6.2 percent (±0.2%) from 2008. Total sales for the October through December 2009 period were up 1.9 percent (±0.3%) from the same period a year ago.
Now remember, Census has some funny methodology in that they don’t count sales unless both the prior and current month is returned by the same store. This means they overstate sales during declines in the economy, and understate them during expansions.
Looking inside the report we see a number of surprises in the year-over-year numbers.
Electronics were down – so much for the so-called "strong Christmas sales" in that category that everyone on ToutTV has been crowing about.
Food and beverage purchases were up – price inflation?
Gasoline was up huge, accounting for a huge percentage of the year/over/year increase all on its own. Gee, that happens when the gas price goes up a lot, right?
Indeed, while there were positive changes in other categories (online was up 10%, as just one example) gasoline sales increased in dollar volume by thirty-four percent and accounted for a stunning $8.7 billion of the total $17.9 billion increase – roughly half.
What’s there to like in here? I say "little or nothing" – gas sale increases are not positive, they’re negative as most gasoline demand is inelastic (you need it to get to work) as is food.
The bright lights, such as they were, had clothing up 5% and general merchandise up 2%, both annualized.
Rather uninspiring when one considers that the inelastic components were the big movers on the positive side and that’s not good for discretionary spending capacity.
On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months the index increased 1.8 percent before seasonal adjustment, the first positive 12-month change since February 2009.
Most of the change was due to energy; gasoline was up sharply (as we saw yesterday in the PPI.)
Core was a literal zero.
Food was up a bit, but I continued to be puzzled by the difference between gasoline and "fuel oil."
Why? Because "fuel oil" (that is, heating oil) is exactly the same thing as #2 diesel – that is, road diesel fuel. The only difference is the tax (and the presence of dye in the heating oil to denote that the tax has not been paid.) But for the legal (tax) issues you can run "heating oil" in your diesel car or truck, and vice-versa – they are identical products.
Used vehicles were also up materially – a reflection of the distortion from "cash for clunkers" still present in the data (it hit its maximum in October at +3.4%) Prices for new vehicles were also up (again, the maximum was in October) – again denoting the "back-door" bailout of the automakers from cash-for-clunkers. Unlike the new vehicle deal however, which you got a tax credit for, the buyer of a used car just got plain old-fashioned screwed through price-jacking caused by constraints in supply. (Just wait though – in the new year when people can’t make the payments on those CFC deals, you’ll see what happens to used car prices…. supply and demand you know.. )
Medical care was up as usual (gee, how come it keeps rising faster than overall inflation?) and shelter costs were down (remember, this is not "housing", as that would expose reality – it is "owners equivalent rent")
All in all a blah report – but given the PPI that’s expected – the fun and games in the CPI report resulting from yesterday’s PPI should show up in a month or two.
Colonial Pipeline Co., which operates the largest pipeline linking U.S. Gulf Coast refiners and East Coast markets, will limit shipments of gasoline because orders exceed the company’s ability to deliver fuel on time.
The Alpharetta, Georgia-based company issued the requirement, known as an allocation, in a bulletin to shippers for the 70th cycle. The restriction applies to shipments on Colonial pipelines north of Collins, Mississippi.
Companies will be able to ship a pro-rated portion of their original nomination, based on their shipping history over the past year, according to Colonial.
With the assistance of Jane Van Ryan at API, I contacted to Steve Baker at Colonial Pipeline, to find out what is happening. I discovered the oversubscription seems to be related to refinery shutdowns in the Northeast.
Many of you will remember that Colonial Pipeline is the big pipeline that carries finished oil products from the Gulf Coast up to the Northeast part of the United States.
Map showing route of Colonial Pipeline
I live in the Atlanta area, so I remember when there have been gasoline disruptions because of inadequate supply. This has happened twice: once following Hurricane Katrina in 2005, and again in September 2008, following two gulf hurricanes.
When I inquired, I found out that there are really two parallel pipelines. One carries only gasoline products; the other carries distillate products. The line that is running short of capacity is the gasoline pipeline. (If only one is running short of capacity, it is not too surprising that it is the gasoline line. Distillate products like diesel fuel are now in very abundant supply; gasoline is at closer to normal levels.)
When I asked why demand was so high for gasoline pipeline capacity, one of the reasons mentioned was that shutdowns in refinery capacity in the
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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Note from dshort: I've updated the accompanying charts with the latest Personal Consumption Expenditures price index from the Bureau of Economic Analysis. The annualized rate of change is calculated to two decimal places for more precision in the side-by-side comparison with the Consumer Price Index.
The BEA's Personal Consumption Expenditures Chain-type Price Index for July shows core inflation below the Federal Reserve's 2% long-term target at 1.47%, but for the past four months this indicator has hovered above its narrow range of the previous 12 months. The latest Core Consumer Price Index release, also data through July, is higher at 1.86%. The Fed is on record as using PCE as its primary inflation gauge.
Buffalo Wild Wings Inc. (Ticker: BWLD) shares are in positive territory in early-afternoon trading on Thursday, reversing earlier losses to stand up 0.50% on the session at $148.50 as of 12:15 pm ET. Options volume on the restaurant chain is running approximately three times the daily average level due to heavy put activity in the October expiry contracts. It looks like one or more traders are buying the Oct 140/145 put spread at a net premium of roughly $1.45 per contract. As of the time of this writing, the spread has traded approximately 3,000 times against very little open interest at either striking price. The put spread may be a hedge to protect a long stock position against a roughly 6% pullback in the price of the underlying through October expiration, or an outright bearish play anticipating a dip in BWLD shares in the next couple of months. The spread makes money at expiration if shares in BWLD decline 3.3% from the current price of $148.50 to breach the breakeven point...
Gradient Senior Analyst Nicholas Yee reports on six companies that are using a variety of techniques to shift pretax profits to lower-tax areas. Featured in this USA Today, article, the companies include CELG, ALTR, VMW, NVDA, LRCX, and SNPS.
Mt Gox may be long gone in the annals of bankruptcy, but its founder refuses to go gentle into that insolvent night. And, as CoinDesk reports, the disgraced former CEO of the one-time premier bitcoin trading platform has decided to give it a second try by launching new web hosting service called Forever.net and is registered under both Karpeles’ name and that of Tibanne, the parent company of Mt Gox.
Author Helen Davis Chaitman is a nationally recognized litigator with a diverse trial practice in the areas of lender liability, bankruptcy, bank fraud, RICO, professional malpractice, trusts and estates, and white collar defense. In 1995, Ms. Chaitman was named one of the nation's top ten litigators by the National Law Journal for a jury verdict she obtained in an accountants' malpractice case. Ms. Chaitman is the author of The Law of Lender Liability (Warren, Gorham & Lamont 1990)... Since early 2009, Ms. Chaitman has been an outspoken advocate for investors in Bernard L. Madoff Investment Securities LLC (more here).
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Well PSW Subscribers....I am still here, barely. From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.
First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices. Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment. Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer. For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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