Thursday Thump Wrap-Up

As I said this morning – what a friggin' mess.

They ran oil up to $140 so what can you expect?  The market cannot survive $140 oil or $130 oil for that matter but NYMEX traders already bought July $150 contracts and MS has already predicted $150 on July 4th and, since Congress has already named them as a market manipulator, why should it surprise us that oil is being manipulated to hit $150 on July 4th.

Morgan Stanley doesn't care about the damage this does to you, or the markets – as long as they get right, and rich, it's all good in George Bush's America.  We allow the people who are found to be manipulating the markets to continue to not only participate in the markets but to to continue manipulating it because, according to Congressional investigators: "It's not that they are doing anything criminally illegal…they are taking advantage where no one has ever looked before and when someone does take a look, there may be something illegal."

That has been the great moral lesson that this administration has passed on to this generation of children – as long as it's not "technically" illegal – then feel free to do whatever you want.  Immoral is "A-OK" for the party of the Moral Majority.

So let's review how much damage has been done to the Big Chart this week as oil climbed from $132 to $140 in the past 5 days:

Wow!  That's pretty bad!  We fell out of our "Feeling Better" zone in the Dow, Nasdaq, S&P, NYSE, Russell and the FTSE while the Transports and the Dax have already fallen more than 20% off their highs of last fall.  The SOX were already doomed to the firey pits of pitiful, as was the Hang Seng and the BSE and I will point out that we continue to look less sucky than either Europe or Asia but, with the Dow dropping 6% in 5 days – we may be catching up soon.

The Hang Seng and the Nikkei actually held up well for the week, especially as this chart includes tonight's terrible action on those exchanges.  Europe is off about 5% across the board and, other than the Dow, which has been assassinated by Goldman Sachs, our other indexes are off about 3%. 

Will the Dow test the 20% rule tomorrow?  I dont' see why not.  Oil is even higher after hours than it was at the close and the S&P still has a long way to go before they hit resistance while the other indexes are also floating in that zone.  On a Friday, it's going to be very difficult to get the market "Feeling Better."

The last two times we had dips like this, the Fed stepped in and reversed the downtrend.  At the time(s) I thought it was a bad idea as we would have been better off cleaning house at whatever bottom we hit and now, in retrospect, I think I've been to bullish as we are simply getting what we deserve after pursuing some of the stupidest economic policies in the history of government.

All it would have taken is for Ben Bernanke to say the Fed WOULD raise rates to combat any further rise in inflation.  He wouldn't have to actually do it, just threaten to do it and we could have lowered commodity prices.  All it would have taken is for Congress to pass strong measures to restrict speculation and the energy markets would have gone the other way.  All it would have taken is for George Bush to say he would release 20M barrels from the SPR ahead of the July 4th weekend to make sure Americans were not crushed by gas prices over the holiday weekend.

None of this happened and we reap what they've sown.