News Day

by Larry Levin


Thursday was "full of it;" data, that is. Before the open there were four important economic reports. Shortly after the open there was another report - the Philly Fed Survey.

Although there was a great deal of news and one might think that the market would move - either much higher or lower - it did not. The status quo remains: the near term rally is able to withstand all bad news.

* PPI was MUCH worse than expected. (The Fed does not want deflation) * Empire State Manufacturing survey was MUCH worse than expected. * Weekly jobless claims better than expected. OK, but how did that happen? Better or an anomaly?
* Industrial Production; very bad, barely above zero after almost a year of strong gains sponsored by the taxpayer via the Fed and White House pump-monkeys (read: BS stimulus) * Philly Fed Survey...MUCH worse than expected.

Bloomberg said the following of these atrocious reports...The top of the slope is here already for manufacturing, at least this is the indication from this morning's deep run of data. The Philadelphia Fed's general business conditions index came in at 5.1 in July indicating a slower rate of growth than June's 8.0 reading. In an unpleasant warning, new orders fell to minus 4.3 to mark an end to a full year of growth. If new orders extend their contraction in next month's report, the health of the region's manufacturing sector will be in question. If the ISM report for July also shows contraction for new orders, the health of the nation's manufacturing sector will suddenly become a big issue.

Unfilled orders, at minus 8.6, show significant contraction as they did in this morning's Empire State report. Delivery times, like the Empire State report, improved sharply in what is a negative sign for business activity. Shipments slowed to plus 4.0 from 14.2 though employment did show a modest gain at 4.0 vs. June's minus 1.5.

Bloomberg was being too kind.

After a drop due to the Philly Fed gut-punch, the market refused to fall. In fact, it did all it could to rally despite the news. It was almost as if the big boys KNEW SOMETHING WAS COMING.

Something was coming, indeed! Later in the afternoon a 3-lot of hay-makers hit the market with the force of a Mike Tyson uppercut in his prime; FinReg was passed in the Senate, the well was capped in the Gulf, and Golden Slacks got off with a slap on the f$#@!g wrist.

Miraculously this all happened on a day full of terrible news that started a would-be nasty slide. Moreover, the prior rally was on nothing but short-covering and leverage...there was nothing real to it at all. Bad news would certainly start another strong leg down in the market and since this is not good for the Fed or the Administration, the SEC bargain with the financial-devil was revealed. Hurray - the Banksters can go back to raping the public in general and their own customers specifically, with impunity.

The day that the government started its proceedings against Golden Slacks I knew it was in the bag. I said GS would pay a relatively small fine, as well as a possible sacrificial lamb being offered up to the SEC, and it would be over with. I was correct. It was nothing more than bread & circuses for the idiots who believe the government gives a damn about the common American.

Goldman paid a $550 million fine and is once again free to conduct business as usual, as Fabrice Tourre waits to go down as the fall guy. Sorry "Fabulous Fab" (as he called himself), someone had to be the fall guy. But don't worry about either "FF" or Goldman; both will be just fine. After all, you didn't think any real money would be paid or a real employee would go to jail...did you? Naaaah, that's for the peasants like you and me.

If you think I'm being too harsh, please consider the following...

The fine was merely 3% of the recent 2010 "bonuses," which amounted to $16.2 billion. Keep in mind, without YOUR TAX DOLLAR funding of the AIG bailout, there would be no Goldman Sachs today. So it paid out $16,200,000,000.00 in bonuses, yet only pays a $550 million fine for its roll in the blatant mortgage securitization fraud?
When squirming, GS became a "savings" bank and thus was considered "too big to fail."
With its new protected status, Goldman had unfettered access to the Fed's free-money window, unlike in its old days as an investment bank.
With the free money, Goldman buys piles & piles & piles of Treasuries from Tax-Cheatin-Timmy at the Treasury.
Today Goldman gladly settles with the feckless SEC and uses the free interest it made from the Treasury purchases, from the free money from the Fed, after it was bailed out with free money from the moronic taxpayer who keep electing the same idiots who allow this circle-jerk to continue unabated.
Do you still think I'm being too harsh? No way!

If you like getting screwed like this then I implore you to reelect to current s#!t-for-brains that currently "represents" you. If not, vote for the other guy.



Previous Day's Trading Room Results:

Trade Date: 7/15/10

E-Mini S&P Trades*
(before fees and commissions):


1) 80% buy @ 1:37pm at 1086.50 = +1.00 & +.50 (2 lots)

2) Algorithm positions (11)

3) “Reading the Tape” positions (16)combined Secret’s, Algo, & “Reading the Tape” total +21.50



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