Stocks in Asia fell 0.3% Monday while in Europe they rose that same amount. In the U.S., stocks rose 0.5% on very low volume as the VXO dropped over 4% to close below the unsustainable 11.50 mark. Tuesday, stocks in Asia closed flat and in Europe down slightly. In the U.S., stocks fell 0.5% on low volume while the 10-Year U.S. Treasury Bond yield rose over 2% to close at 2.66. The VXO rose over 4%, but managed to stay below the 12 mark.
Wednesday, stocks in Asia rose slightly, and in Europe they gained 0.4%. In the U.S., stocks rose 0.5% on low volume, but that was enough to push the Dow Jones Industrial Average to a new high.
Thursday, stocks in Asia closed down 0.6% but in Europe after an ECB rate cut from 0.5% to 0.25%, stocks closed flat. In the U.S., the Twitter IPO was the big news as the stock took flight and closed at nearly double the offering price.
Good news is bad. The Commerce Department reported a annual GDP rate using the “revised” (phony) formula for the third quarter as 2.8%. Apparently despite the lie, that spooked stocks and sent them down 1.3% on low volume. While precious metals fell 1%, their miners dropped three times that amount. The VXO jumped up almost 7% to close at 12.84.
Friday, stocks in Asia continued the slide in started in the West, dropping 0.6%. S&P downgraded French bonds to AA. Stocks in Europe fell 0.2%. The employment news was better than expected. Apparently we’re back to good news is good, because stocks roared higher propelling them upward 1.1% on low moderate volume. Gold plunged below 1300 to close at 1285.
The 10-Year U.S. Treasury Bond yield shot up to over 5% to close at 2.75. As the Federal Reserve continues to hold an ever-increasing number of these bonds, these kinds of rate rises threaten its present-value solvency as its balance sheet bleeds red ink. Don’t worry though, the Fed already said that they will not fret about such things and simply value their assets (lie) to make their balance sheet look like they are still solvent. Image is everything.
For the month of October, which is often a treacherous month for stocks, they rose almost 5%. But for the week, the gain boiled down to the Friday’s desperation buying. With people saying things like they just have to own Twitter stock because they don’t want to miss the boat like they did with (turkey-stock) Facebook, there’s obviously still no lack of greater fools to rush in and buy overvalued stocks. When they finally discover their boat is made of paper dreams, it will be too late for them to do anything but watch their fortunes fly away.