I heard a lot of the latter today all over the financial media but what is never mentioned is that these companies borrowed most of that cash in expectations of using it during the “recovery.” So why haven’t they spent it yet? Oh, and if they borrowed the money; are they really flush with cash, or simply biding their time before it must be paid back? Big difference, isn’t it?
The smoke and mirrors part of the economy is running strong. Week, after, week, after multiple weeks economists, analysts, and the White House have been telling us that the jobs market is on the mend and any time now it will be getting better. Then again, the White House had been saying it already was getting better. Yeah, not so much!
Well look at this, “green shoots” and “recovery Kool-Aid” for everybody – the weekly jobs number is in. Oh wait, it wasn’t good – and of course this type of drivel is the smoke & mirrors nonsense I alluded to earlier. Today’s terrible weekly jobs data was the 11th consecutive weekly initial jobless claims to be greater than 400,000. It is miserable. It is not a recovery.
Expectations for the morning’s report were a poor reading of 415k, but it was much worse at 429k. Moreover, the prior week’s bad data was ONCE AGAIN REVISED WORSE this week, so as not to spook the market last week with the truth. Continuing claims were also worse than expected.
It was this report and earlier economic data out of China that its economy is slowing that caused the market to gap open as low as it did Thursday morning.
There were also global political shenanigans coordinated by the White House before the open: a portion of the Strategic Petroleum (oil) Reserve (SPRO) will be released to force the oil market lower, which is the will of the president. Margins have already been raised multiple times, and that didn’t work. Bernanke wasn’t about to end QE2 early and his POMO operations will continue so the president released the SPRO, rather than force Bernanke to stop his madness - free market be damned.
The whiplash began early as the market fell then became choppy. The whiplash resumed to the upside with more news out of Greece. Greece again? Already? Really?
Just a few days ago we learned that the banking mafia twisted enough arms in the Greek Parliament to avoid taking losses on its Greek bond debt. Greece had accepted another bailout. Thursday’s news was that Greece had agreed with the banking mafia on how it would gut its citizens of cash, savings, and other capital – nothing more. So one wonders why Thursday’s news caused such a massive move higher, which caused said whiplash.
Oh yeah, there is no truly bullish fundamental news so I guess this will have to do. How pathetic is that?
Trade Date: 6/23/11
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E-Mini S&P Trades*
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