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08May2015 Market Close: Averages Closed Near Session Highs As Did Oil And The U.S. Dollar, Something Has To Give

Written by Gary

By 4 pm today's session ended higher on low volume, with many investors seemingly waiting for the other shoe to drop.

Last minute trading actions saw some big volume selling in an already weak market. Are today's higher gains going to spill over in Monday's session, 'Volatile Monday"?

Todays S&P 500 Chart

'Good' jobs report? 15 million unemployed people want to work

WASHINGTON (MarketWatch) — There is good news in the jobs market, just not enough of it.

The Bureau of Labor Statistics reported Friday that the U.S. economy continued to create jobs at a healthy pace of nearly 200,000 per month in the first four months of the year, and the unemployment rate dipped to 5.4% in April, the lowest since May 2008.

But we are still far from achieving an economy that offers a job for everyone who wants one. And wages are barely growing for the 148 million who do have a job.

Nearly 15 million jobless people say they want to work, but the Federal Reserve seems nearly ready to declare victory, figuring that the unemployment rate can't go much lower without setting off a harmful inflationary spiral.


The April Jobs Report Doesn't Really Change Anything

The reaction to this month's jobs report was rather muted, as few of the numbers offered much of a surprise against expectations. The number of jobs added, earnings growth, and the participation rate, were right about where people expected. Revisions to previous months were down, but largely stuck to the theme of a first quarter ruined by bad weather.

The one thing people do seem to agree on is that this report is unlikely to alter the timing of an interest rate hike by the Federal Reserve. While there had been some talk that a very strong April payrolls report could put a June interest rate increase back on the table, the vast majority of investors are pricing in a rate hike for later this year.


The Market in Perspective

Here are the headlines moving the markets.

This Time It's Different for Investors? No---and Yes

The lessons to be learned from â€'the four most dangerous words' in investing.

Dismal Data Delivers Stock-Buying Frenzy

With a 'record number of Americans not in the labor force' and Wholesale Inventory data that strongly indicates a recession was enough to drive stocks up near all-time highs, there appears only one clip that is appropriate...

Jobs data was all that mattered and it appears it was just crap enough to warrant moar easy money... but it is clear FX and gold/silver traders appeared to get the news early...

But Stocks were what mattered...Today was The Dow & The S&P's best in over 3 months!! on shitty data!

And here are the cash indices from yesterday's lows...

As the greatest buying panic in 3 years hit at the open...the opening TICK count was extreme to say the least...

Visa in talks to buy former subsidiary Visa Europe for up to $20 billion: Bloomberg

(Reuters) - Visa Inc is in preliminary talks to buy former subsidiary Visa Europe Ltd, in a deal that could be valued at up to $20 billion, Bloomberg reported, citing people with knowledge of the matter.

Home Flipping Profits Hit Record As Wall Street Drives Speculation (Again)

Back in March, we were thrilled to discover that becoming a real estate speculator is easier than we thought. Although bank financing may have dried up post-crisis, it turns out BlackStone and a whole host of other PE firms will gladly loan credit-worthy borrowers money to accumulate distressed single-family properties. These newly-minted "investor-landlords" will likely have no trouble locating renters thanks to the fact that many former homeowners lost their residences in foreclosure during the crisis, and have found little economic respite in the anemic US â€'recovery.' The PE firms who make this all possible are themselves driven by a desire to securitize the loans they make, meaning that in relatively short order, we should begin to see landlord loan-backed paper in the ABS market.

Today, we get what is essentially the same story, involving the exact same PE firms (BlackStone, Colony, and Cerberus) but with the wrinkle that instead of lending money to prospective landlords, the borrowers are house flippers. Here's Bloomberg:

Real estate buyers seeking money to renovate and flip U.S. houses are getting help from some of the world's biggest investment firms.

Colony Capital Inc., Blackstone Group LP and Cerberus Capital Management are among the companies that have started making bridge loans to investors who buy homes to sell them quickly for a profit. Borrowing costs -- traditionally the highest in residential lending -- are tumbling as the firms compete for customers.

Gasoline Prices Rev Up for Summer

Gasoline prices have been rising, spurred by a rebound in crude oil and also in anticipation of strong demand this summer. Despite recent gains, prices at the pump remain lower than in recent years.

Syngenta Can Reap More from Monsanto

There is underlying logic to Monsanto's takeover offer to Syngenta. But the Swiss company also has some reason to think it should get a higher price.

Deflation Works!

Submitted by Bill Bonner via,

The Coming Resolution

We've been exploring how the credit bubble resolves itself. Inflation? Deflation? Are we locked in to a long, long period of stagnation, slump and economic sclerosis?

Yesterday, we shared our research department's forecast for the short term: Based on simple regression-to-the-mean logic, it suggests that the "most likely" course for US stocks over the next three months is a loss of more than 6%.

Today, we give you our long-term forecast.


Where the global economy is after decades of failed attempts to centrally plan it in order to protect powerful established interests from the consequences of their folly.

Image credit: Sony Pictures Television, Warner Bros. Television, Scott Free Productions

Little by Little or One Savage Blow

"This is the most negative ever," says our chief number cruncher Stephen Jones. It shows a loss of 9.8% every year for the next 10 years. In other words, our mean-regressing-, debt- and demography-adapted model also seems to be pointing to a long depression.

But an average loss of 9.8 ...

Judge Denies Small Banks' Effort to Block Part of Target Settlement

A judge denied a request from small banks and credit unions to block part of Target's $19 million settlement with MasterCard over its 2013 data breach.

Wall Street jumps as investors laud jobs growth

(Reuters) - U.S. stock indexes jumped more than 1 percent on Friday as strong jobs data indicated the U.S. economic growth was picking up momentum, but not enough to raise concerns about an earlier-than-expected interest-rate rise by the Federal Reserve.

What QE Hath Wrought (In 8 Stunning Charts)

First - always remember, what The Fed does is for Main Street, Not Wall Street (since 1987):

And with that in mind, here is what QE hath wrought...

S&P 500

SPX QE Returns: +176.23%

SPX Non-QE Returns: -32.73%

Europe STOXX 600

Europe STOXX 600 QE Return: +106.16%

Europe STOXX 600 Non-QE Return: -9.37%

Daniel Loeb Criticizes Warren Buffett, in a Rare Public Swipe

For years, Warren Buffett has poked, prodded and needled hedge-fund managers. This week, one of the biggest, Daniel Loeb, bit back.

Monsanto, in Bid for Syngenta, Reaches for a Business It Left Behind

As the pace of genetic modification slows, a company that refashioned itself from chemicals to biotechnology shows interest in diversifying back into pesticides.

April 2015 Consumer Credit Rate of Growth Accelerated. Ratio of Total Consumer Loans Outstanding to Consumer Spending Remains Near Historic Highs.

Written by Steven Hansen

Consumer credit growth did accelerate moderately in March 2015. Again this month, student loans are not distorting analysis of consumer credit growth. Consumer credit annual growth rate significantly above GDP's annual growth rate - and repayment of consumer debt is taking a larger share of disposable income.

Read more ...

Tax Donkeys: Rich Enough To Pay Most Of The Taxes, Not Rich Enough To Buy Politicians

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Real political representation must be bought, just like everything else in a market economy.

Mike Swanson (Wall Street Window) and I were discussing the difference between the 1% who earns $360,000 annually and up and those in the Oligarchy class--the .01% (our podcast: America's Nine Socio-Eco-Political Classes).

The difference is the 1% remain Tax Donkeys: they pay most of the Federal and state income taxes, but are not wealthy enough to buy political influence.

In other words, the 1% (and indeed, the top 10%) have taxation but no representation. The political strings are pulled by a relative handful of super-wealthy individuals who use a thin slice of their wealth to fund political campaigns and lobbying.

Charting American Oligarchy: How The 0.01% Contributes 42% Of All Campaign Cash

Legal Corruption In The US: Meet The 1% Of The 1% Who Drive American Politics

Longtime correspondent B.C. describes this reality as no representation without taxation: those who pay the most taxes are represented via their political contributions and lobbying, and the 90% who pay relatively little income tax have no real representation at all because real political representation must be bought, just like everything else in a market economy.

B.C. explaine ...

Job growth rebounds, keeps 2015 Fed rate hike in play

WASHINGTON (Reuters) - U.S. job growth rebounded last month and the unemployment rate dropped to a near seven-year low of 5.4 percent, signs of a pick-up in economic momentum that could keep the Federal Reserve on track to hike interest rates this year.

Bojangles' Soars in Market Debut

Shares of Bojangles' Inc. soared as much as 47% in their market debut Friday as investors piled into the North Carolina-based chicken chain.

Artist's Impression Of Obamatopia

"Tah-dah" indeed...


Jury Rules for Deloitte Over Insurance-Company Failures

A jury has ruled that Deloitte & Touche LLP isn't liable in Florida's biggest-ever insurance-company collapse.

Jobs Vie With Growth for Fed's Attention

Jobs and economic growth aren't traveling the same route. That makes it tougher for the Fed to pick a clear rates path.

Audacious Aussie Bet Gone Wrong Sinks Odey In April

In March, billionaire hedge fund manager Crispin Odey said we all have "grandstand seats for an imminent market shock." As it turns out, a "shock" was indeed "imminent" for Odey but unfortunately, he ended up on the field of play rather than observing from the bleachers. As FT reports, a leveraged bet against the Australian dollar that had been working well cost the London-based manager dearly in April. Here's more:

Odey Asset Management founder Crispin Odey's flagship hedge fund slumped 19.3 per cent last month, after it was caught out when the Australian dollar strengthened against the US dollar.

The large one-month move, from one of London's best-known hedge fund managers, wiped out Odey European's small gain in the first three months of the year and took its 2015 performance to -18.2 per cent, according to investor documents.

The A2.33bn fund has built up a short position in the Australian dollar against a long position in the US dollar, which drove monthly gains of 4.6 per cent in March. However, since the end of March the Australian dollar has gained against the US dollar.

Odey's currency position is leveraged, which magnified the losses.

This week, the Reserve Bank of Australia reduced its cash rate by 25 basis points to 2 per cent. But the Australian dollar rose even higher against the US dollar, following weaker economic data from the US.

Ironically, Odey can take comfort in the fact that at least one of the central bankers who he believes won't be able to "

Syngenta rejects $45 billion Monsanto takeover offer

ZURICH/LONDON (Reuters) - Agrochemicals firm Syngenta on Friday rejected a $45 billion takeover offer from Monsanto, saying the offer undervalued the Swiss firm and did not fully take into account regulatory risks.

The Reason Why There Is No Wage Growth For 83% Of US Workers

The most confounding aspect of the economy, and the one metric that has flashed a red light on Janet Yellen's "labor market dashboard" for years, is that wage growth has been completely non-existent, and roughly at half the Fed's targeted level of 3.5-4.0%.

What's worse, and what the Fed may not even realize is that while Yellen is looking at the average wage growth for the entire US population which has been flat as a pancake for the past 6 years, completely oblivious of how many trillions the Fed monetizes or what the stock market does...

... the wage reality for the vast majority of the US working population, or the 98 million non-supervisory workers which comprise 83% of total US private payrolls, is that their wages are not only not rising, or even flat, but for the past year have been declining at a rapid pace after hitting 2.5% in early 2014.

And as the purists will immediately point out, in inflation-adjusted terms there is no wage growth for more than 4 out of every 5 workers.

So for all who are still confused why there are no wage hikes despite the Fed's relentless efforts to micromanage the economy and stimulate wage growth via trickle-down record high stock market prices, the answer is that there is wage growth.

Just not for 83% of the working population.

Ford Venezuela unit to sell cars in dollars only: sources

CARACAS (Reuters) - The Venezuela division of Ford Motor Co will begin selling vehicles only in dollars in the coming months, two sources familiar with the situation said on Friday, as currency controls leave the automaker unable to recover revenue from local sales.

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