Most of today’s news was not just bad, but shockingly bad. Thank Bernanke that doesn’t matter any more.
What happened today?
In its truly rigged fashion, the US equity market saw nothing wrong with any of this and rallied into the close. As long as the market believes Bernanke is a bigger put option than Greenspan, and he is by orders of magnitude, the market can ignore reality and rally further.
What happened today?
- There was no excuse of low volume due to a snowed in New York. Volume was again abysmally low; so low that even CNBC anchors were stunned. Of course, when the market is 100% backstopped by the Fed, it just keeps going up.
- Consumer confidence was well below expectations.
- Housing prices dropped across the nation in the S&P Case-Shiller HPI. Housing analysts are all but guaranteeing a double-dip in home prices. Note to analysts: it has already begun!
- Tuesday’s 5-YR Note auction was horrible. It was such a shock to the bond market that interest rates spiked as Treasuries dropped like a rock.
- China had its second failed auction in a month on Tuesday…and it was only the equivalent of $3.2-billion.
- The Eurocurrency dropped like a rock from its intra-day high. Why? The Europeans also had a FAILED AUCTION! The European Central Banks (ECB) tried to sell off all of its recently purchased toxic junk that it had bought from Ireland and Greece (to name a few), and the market told the ECB to go pound sand. The ECB was left holding the bag with 13.5 BILLION Euros unsold – thus a failed auction.
- Allstate PROVED that Bank of America’s real estate prospectuses (CDOs, MBSs, etc) were riddled with wanton fraud (that it sold to Allstate) and filed a major lawsuit. More insurance giants, hedge funds, and pension funds are sure to follow.
In its truly rigged fashion, the US equity market saw nothing wrong with any of this and rallied into the close. As long as the market believes Bernanke is a bigger put option than Greenspan, and he is by orders of magnitude, the market can ignore reality and rally further.
Trade Date: 12/28/10
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