Monday, July 26, 2010

News Bad - Market Good - What's New?

So what's new? It appears the worse the news gets the more the market ramps. Go figure.

The MSM pumped the "good" housing numbers this morning (after CNBS missed the announcement being "on commercial break" at 10:00 - wonder why?). coverage is broad, but one thing stands out, the revisions and how these "good" numbers were calculated. As usual we'll start with Zero Hedge's coverage Atrocious New Homes Sales Data Sufficient To Force Another Algo Mediated Short Covering Frenzy where you get, "So let's get this straight: this was the worst June on record, following the worst month on record in new home sales ever, the beat was completely drowned out by 57k worth of prior revisions, the average new home price slid another 1.4% to $213,400, yet just because the new home supply is down to "just" 7.6 month from 9.6 in May it is enough to push stocks to the moon". Nice, worthy of a ramp job I'd say. Their slight of hand is getting easier to spot. It won't be long till we're all pricing in multi-period revisions and taking advantage of all this fine economic data the way the HFT bots do.

Denninger covered it this way - New Home Sales: They Sucked.Calculated Risk report some insightful information in Survey shows house prices falling in June, but long wait for house price indexes, "That is why Popik is saying the price declines will not show up in house price indexes until October of November." which makes sense, so plan your investments accordingly. 

For those of you into comparing the past to present here are a couple of views. First from Denninger, the bears will love this one - Fractal Update, 7/26/2010 a timely little video that I may actually  buy into. On the other side (I found a bunch of shit today that was deep into the recovery being on and bout puked) - here is one of those posts (via The Big Picture) Sixteen Dow Recoveries: Update compares how does the current Dow recovery compare with major recoveries in the past? Of course you have to be in a recovery to make a legitimate comparison, right?

Money supply? Yup, you got some? Nope, well you better go get it. Weimar? did Shanky say Weimar? Yup. This may be one of the most important adds to a post I have ever done. It was sparked by a running WARNING I have going against the availability of your "deposits", deflation (massive) and two things I ran across today. My mentor/buddy (never an intern - that was a bad joke) Rich Cash of Jubilee Prosperity sent me this today The Death of Paper Money where we get, "There is a clear temptation for the West to extricate itself from the errors of the Greenspan asset bubble, the Brown credit bubble, and the EMU sovereign bubble by stealth default through inflation. But that is a danger for later years. First we have the deflation shock of lives. Then -- and only then -- will central banks go to far and risk losing control over their printing experiment as velocity takes off. One problem at a time please." Then I found that Mish posted this really long and drawn out post on Money Supply Divergence - TMS1 vs. TMS2 vs. M2 - What does it Mean?  I'm bringing it to you because you should read it and understand what the hell is happening and understand that, "Bear in mind, the Fed has so distorted the system that "It's all credit". There is nothing backing any of this, including checking accounts." That should scare you to death.

What would a Shanky post be without a little doom and gloom? Thanks to Mish, I can supply Edge of Financial Chasm. As usual Mish is focusing on the State level, and he states, "When it comes to state budgets, the low lying fruit has been picked. Indeed all the fruit has been picked and next year's harvest has been spoken for as well. Thus it's the end of the line for state's ability to kick the can down the road in a meaningful way, if employment does not dramatically pick up soon." Another statte related issue that could effect the health of you or a loved one is Warren Pollock Warns Of Emergency Drug Shortage As EMTs Told To Go To "Alternate Protocols"

I'm overdue for a rant. this shit is getting way out of hand. The lies and misrepresentations and fraud and pure criminal actions are getting a bit much to bear (again - for like the 1,000th time), so expect an implosion on my part soon.

Gl out there and thanks for all the views. Have a great evening.