Laughable

by Larry Levin


Recent economic reports have not been good; neither this week nor the last several. The small bit of news that we have received this week, however, has been lauded by the financial press, which in my opinion is laughable. In order to make any of it sound good on television or in print, one must willfully ignore the full picture in order to skew the data as positive.

Take for example yesterday's so-called huge housing sales "success" story. The lame stream media regurgitated the same bile all day long: New Home Sales surged by nearly 24%. Did they tell you the whole story? Of course not.

The whole story is that the near 24% increase from the prior month was only possible because the prior months data had been massive revised - LOWER, of course. (Don't you just love the much later lower revisions that nobody seems to care about? That's one of the way the market is "rigged" to do as the central planners wish.) In fact, 57,000 heretofore prior new home sales were stripped away from the data.

The May number was revised lower by 33,000 to reach the WORST EVER SALES DATA IN HISTORY...and April was revised lower for the SECOND time by an additional 24,000 sales. So we have colossal revisions of 57,000 worse than reported sales but yesterday's data point was better than expected by 20,000...from the worst level in history...and this is good news? Home prices also fell 1.4% according to this report.

Any reporting short of the full story is laughable, yet the headline is probably all that you heard.

The Dallas Fed's manufacturing report was also released yesterday and showed business activity in that part of the country crashing. Last month's reading was -4 but July was supposed to improve to a -2.5 print. Not so much. It crashed to an abysmal reading of -21.0! By the way, a reading below zero is bad.

Today wasn't much better. The poor folks in the lame stream media who have to wear a happy face every day had more BS (read: manure-like substance) to spread around this morning. The Case-Shiller Home Price Index (HPI) was again lauded as marvelous, but again the full truth was kept from you. Did you know that the Case-Shiller HPI is a three month average and is released with a two month lag? Therefore, one wonders if the folks in the lame stream media bothered to remind you that today's "3-month average" included the time that folks were receiving their $8,000 government cheese to buy said houses; which does nothing but pull demand forward I might remind you.

The headlines read something like this: "Case-Shiller HPI rises 4.6% with economic recovery." Really?!? According to the National Association of Realtors the median home value is $180k. The government cheese giveaway therefore represents 4.44% of the median home value. Hmm, did home values really rise 4.6% because of an economic turnaround or did homeowners just raise their house prices that $8,000 because they knew the buyers were coming in with extra cash? Another government boondoggle if you ask me.

Finally there was the consumer confidence report. It was worse than expected - nuff said.

Despite the real news, the stock market algorithms and dark pool players drove the indices up 4% in just a few days. Oh yeah, that was also done on less...and less...and less volume with each passing day.

Healthy market --- or laughable?



Previous Day's Trading Room Results:

Trade Date: 7/27/10

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


1) VA buy @ 9:17am at 1110.00 = +1.50 & +1.50 (2 lots)

2) OTF sell @ 11:09am at 1110.25 = -1.50 (1 lot)

3) Algorithm positions (11)

4) “Reading the Tape” positions (5) …combined Secret’s, Algo, & “Reading the Tape” total -1.50



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