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Thursday Wrap-Up

Another great day!

Well, not so much for me as my neutral stance is now annoying but lots of people seemed to be happy and I had dinner on Wall Street and those guys seemed pleased with themselves (apparently I'm the only one who was ever worried as we dropped 500 points last week).

What scared me about my conversation with some fund managers was the reason they weren't worried – "Bernanke is speaking tomorrow (Atlanta Fed Conference – 8:30) and Yellen is speaking at lunch (Brandeis – 12:30)."  This strikes me very much as a "fix is in" sort of mentality which certainly can't be healthy in the long run.  Is it the job of the Fed to "spin" the economic data to prop up the markets?  Actually, it just might be!

Under the Federal Reserve Act of 1913 and amendments over the years, the Federal Reserve System:

  • Conducts America’s monetary policy.
  • Supervises and regulates banks and protects consumers’ credit rights.
  • Maintains the stability of America’s financial system
  • Provides financial services to the U.S. Government, the public, financial institutions, and foreign financial institutions.

The Federal Reserve makes loans to commercial banks and is authorized to issue the Federal Reserve notes that make up America’s entire supply of paper money so one could say that IT IS the Fed's job to prop up our phoney-baloney monetary system AT ALL COSTS!  So whatever the CPI is tomorrow, Uncle Ben will be there to tell us every little thing's gonna be all right.

  "It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." — Henry Ford

I've been looking for some good news to latch on to – something that would make me feel good about getting back on the buy side and tonight I see that Chinese Factory Output rose 18.1% in May, even faster than April's 17.4% gain.  That's not a bad thing, that's our factory over there making stuff we use, often enough making them for American companies.  In the grand global economy a productive China is almost as good for us as a productive Detroit used to be.  This production growth should also lead to rate hikes which may lead to another dip in the Chinese markets but, as I said the other day, I'm not looking at them any more…

Of course rates going up in yet another part of the world can't be any help for our Treasury Market but neither does the Wall Street Journal's list of 80 (so far) subprime mortgage lenders that "have closed shop since the end of last year as clients defaulted on payments and banks cut off the funding required to make the loans."

So how about those markets?!?  Woo hoo – another great day - Yipee!

Oil went flying all the way through $68 and looks ready for $70 but if the markets don't care – why should we?  Gold held flat so they don't care and the dollar broke over 83, which means oil, relative to the dollar, is now up a solid 10% for the month.  Thank goodness it's not part of the CPI!

I couldn't bring myself to pull the trigger today as this whole thing doesn't feel right to me but the Dow is breaking out , as is the S&P and the Nasdaq so we'll have to respect the charts but it's the SOX I'll be watching closely.  As Happy Trading's chart points out, they have every reason to rally:

 

 


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  1. Group: Diet Drug Alli Linked to Colon Cancer
    http://www.foxnews.com/story/0,2933,282617,00.html


  2. BA in the news more than usual and we can thank the Paris airshow for that. Im bullish on BA but worried about tommorows CPI and the Federal Reserve Bank of New York will announce its Empire Index for June.

    The week-long event, one of the world’s biggest aviation shows, is expected to feature more frenetic deal-making for Boeing and European rival Airbus when it kicks off on Monday. European jet maker Airbus admitted last week that it was lagging Boeing in orders so far this year. Airbus is owned by Franco-German aerospace firm EADS.

    6/14/2007 11:34:15 PM The Bank of Japan left key interest rates unchanged on Friday. The central bank maintained uncollateralized overnight call rate at 0.50%. The decision came in line with economists’ expectations. The nine-member policy board unanimously voted to hold overnight call rate.


  3. Wang’s World
    new post: an Addendum!


  4. Asia Markets : Friday, June 15, 2007

    Japan*

    17971.49
    129.20
    0.72%

    Hong Kong*

    21017.05
    149.79
    0.72%

    DJ Shanghai*

    433.58
    2.44
    0.57%

    S.Korea*

    1772.26
    3.08
    0.17%

    India

    14288.36
    84.64
    0.6%

    * at close

    Sources: Dow Jones, Reuters


  5. NMX

    looking to sell itself, next will be ICE


  6. nmx up $ 10 in pretrade. hope nobody is selling calls in June!!!