Predictably, our dedicated public servants in Washington D.C. sold this country down the river again, voting for a budget agreement that further mortgages the future of this country. Perversely, the stocks that relentlessly climbed on news whether good or bad, fell about 2% as this settlement brought a measure of economic certainty and thereby removed one hurdle that the FOMC voiced as restraining the looming taper of QE3.
Monday, stocks closed up 0.5% in Asia and just slightly in both Europe and the U.S. on low volume. Precious metals rose 1.5% while their miners rose about twice that amount. Tuesday, stocks in Asia closed flat. In Europe, they fell 0.7%. In the U.S. they fell 0.3% on low volume. This was enough to drag the Dow Jones Industrial Average below the 16,000 level again. Precious metals rallied 2% while their miners gained over 3%. Here’s a chart that shows we’ve reached peak greater fools. There’s also some interesting bubble history and quotes in this article.
Wednesday, stocks fell in Asia 0.7%, in Europe 0.5%, and in the U.S. 1.2% on low volume despite the U.S. budget “deal.” The VXO shot up over 12% to close at 14.61. Thursday, stocks slid 0.9% in Asia and 0.4% in both Europe and the U.S. on low volume. This was enough to push the NASDAQ Index below its latest round number level, closing just below 4000. VXO rose another 5% to close at 15.30. While precious metals fell almost 3%, their miners held firm.
Friday, stocks in Asia closed down 0.7% and in Europe slightly. In the U.S., stocks closed flat, but the NASDAQ did eek out a rise just above the 4000 level, to end the week down about 2%. Here’s perhaps the worst prediction I’ve ever seen. Speaking of turkey stocks, we haven’t visited the turkey ratio in a while. Now that Facebook has joined the S&P 500 Index, perhaps it would be good to get another reading. The IBM:FB turkey index started around 6, shot up to 11, and currently sits at 3.24 as IBM appropriately languishes and Facebook attracts ever more wide-eyed speculators. By the way. what’s the value of zero divided by zero? Perhaps the investing geniuses borne of this present market bubble will soon find out.