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  • Tea Party Out - Coffee Party In!

    Coffee Party Movement:  Alternative to Tea

    Coffee PartyFurious at the tempest over the Tea Party -- the scattershot citizen uprising against big government and wild spending -- Annabel Park did what any American does when she feels her voice has been drowned out: She squeezed her anger into a Facebook status update.

    Let's start a coffee party . . . smoothie party. red bull party. anything but tea. geez. ooh how about cappuccino party? that would really piss 'em off bec it sounds elitist . . . let's get together and drink cappuccino and have real political dialogue with substance and compassion.

    Friends replied, and more friends replied. So last month, in her Silver Spring apartment, Park started a fan page called "Join the Coffee Party Movement." Within weeks, her inbox and page wall were swamped by thousands of comments from strangers in diverse locales, such as the oil fields of west Texas and the suburbs of Chicago.

    I have been searching for a place of refuge like this for a long while. . . . It is not Us against the Govt. It is democracy vs corporatocracy . . . I just can't believe that the Tea Party speaks for all patriotic Americans. . . . Just sent suggestions to 50 friends . . . I think it's time we start a chapter right here in Tucson . . . 

    COFFEE PARTY VIDEO (I don't know how to make a video in instablog) 

    The snowballing response made her the de facto coordinator of Coffee Party USA, with goals far loftier than its oopsy-daisy origin: promote civility and inclusiveness in political discourse, engage the government not as an enemy but as the collective will of the people, push leaders to enact the progressive change for which 52.9 percent of the country voted in 2008.

    The ideas aren't exactly fresh -- Tea Party chapters view themselves as civil, inclusive and fueled by collective will -- but the Coffee Party is percolating in at least 30 states. Small chapters are meeting up, venting frustrations, organizing themselves, hoping to transcend one-click activism. Kind of like the Tea Party did this last year, spawning 1,200 chapters, a national conference and a march on Washington but with a VERY different mission statement:

    “The Coffee Party Movement gives voice to Americans — across every demographic — who want to see cooperation in government.  We recognize that the federal government is not the enemy of the people, but the expression of our collective will, and that we must participate in the democratic process in order to address the challenges that we face as Americans.  As voters and grassroots volunteers, we will support leaders who work toward positive solutions, and hold accountable those who obstruct them.”

    Take a look at the website, Facebook groups and YouTube channel and see if perhaps coffee is the beverage of your choice as well (perhaps someone would like to start a PSW chapter?):



    Disclosure: No positions
    Mar 02 10:29 PM | Link | 23 Comments
  • Volume - Hiding in Plain Sight?
    Volume - Hiding in Plain Sight? 

    By Ilene at PSW with guest author Chopshop at Fibozachi 

    This article is a follow up to The Missing Volume, my previous article on the diminishing volume in the U.S. equity market. (So the first part of this article may be familiar because I’ve included the interview with Nicolas Santiago to provide context.); Previously, Nick at InTheMoneyStocks.Com shared his thoughts on market volume with me. After interviewing Nick, I contacted Chopshop at Fibozachi to further investigate the disappearance of market volume. This article reviews Nick’s thoughts and adds Chopshop’s observations.

    Nicolas Santiago asked “Where has all the volume gone?” 

    Excerpt from ”The Missing Volume,” 

    Are retail investors and non-professional stock market traders still actively involved with investing and trading their accounts?  Phil sent me an article on the subject, “Where Has All the Volume Gone?” by Nicolas Santiago at his Rant and Rave blog, and I called Nicolas up to talk with him about it…

    Nick writes in Where Has All the Volume Gone?

    “Let’s say the market is in an economic recovery and the financial crisis is behind us. Normally one would expect the trading volume in the stock market to increase. This has not been the case. Volume for the month of November and December 2009 have been lighter than August of 2009. Remember August is notoriously the lightest trading month of the year. Hence the term ’summer doldrums.’ January is usually a very high volume month, yet it has started off the New Year even lighter than the last two months of 2009.

    Light volume markets are very difficult to short. Hence the old saying, ‘never short a dull market’. This is as dull of a market as we have seen in many years. While there are some stocks such as Apple (NYSE:AAPL), and Amazon (NASDAQ:AMZN) that have traded with respectable volume the bulk has come from government owned names. Stocks such as Citigroup (NYSE:C), American International Group (NYSE:AIG), Fannie Mae (NYSE:FNM), and Freddie Mac (NYSE:FRE), have often accounted for one third, and sometimes half of the daily volume on numerous trading days.”

    Ilene: Nick, why do you think volume is so low?

    Nick: The public is out of the market, for the most part… In a healthy market, as it’s going up, you get heavy volume. We’ve now gone straight up, on low volume, without any meaningful corrections. These are not normal movements for a bull market. It’s not healthy to move up on low volume – this is the opposite of what you would see in a true bull market.

    But on down days, we do get heavy volume. The market is trading as though someone is propping it up, someone doesn’t want it drop…

    There’s also huge volume in several largely government-owned stocks, such C, FNM, FRE, and AIG. These are only four stocks in a market which has thousands, yet you can see a small group of stocks accounting for sometimes half of the daily volume.

    Who would buy these stocks to own, who would buy Citi? It’s government run, with a $75B market cap – humongous, and it’s probably not even worth zero.

    Ilene: How do you know there are one or a few institutions in the market trying to keep it up?

    Nick: We don’t know for a fact. However, when markets trade higher on light volume it is usually just a few institutions involved. Heavy volume means many institutions are involved.

    Ilene: How do you know when the market’s going to be “propped up”?

    Nick: Chart patterns. I can see when the buy programs kick in and can almost predict it by watching the charts. You can catch the market tipping its hand, and that’s in the chart patterns you get familiar with. You can see the buy programs better in GS and in AAPL than in smaller cap stocks.

    Ilene: Is the government involved in manipulating the market?

    Nick: I don’t know. There are definitely large forces in the market. The government certainly interferes and has an effect.

    Ilene: What do you think the market will do through the rest of the year?

    Nick: This market reminds me of the top in 2007. In 2007 the market had three panics – all with very heavy volume sell-offs. But volume on bounces leading up to the October top was light. When markets trade higher on light volume it’s very concerning.

    This year, 2010, is not going to be like 2009. I think this will be a negative year, maybe 15-20% down. I don’t think there’s any economic recovery. It’s a traders market for the next 10 years. The consumer won’t be spending. The system doesn’t work. They’re inflating the market to make it look good. The plan is to inflate the market up to apparent health, but it’s going there on the back of the dollar going lower.

    I don’t see the S&P going past 1178. At least one more bounce back higher, probably in early to mid February. These bounces should give good shorting opportunities.

    What makes capitalism work is fail, and they don’t let anyone fail now.

    *****

    Here’s Nick’s chart of the volume on SPY. Notice the decline in volume over the last year:

     

    *****

    Here’s another chart via Charles Hugh Smith, Of Two Minds, showing that the volume of trading on the NYSE has also been declining since peaking in 2006. 

     

    *****

    Volume moved to derivatives and foreign markets.  

    Chopshop at Fibozachi watches the markets nearly 24 hours a day and rarely sleeps, so as expected, he had several thoughts on the matter.  After a multi-piece discussion, Chopshop wrote back the following summary.   

    Chopshop: Volume isn’t in ‘America’ anymore, and it’s not in the ‘stock market’. Investment Banks (IB), broker-dealers (B/D), qualified institutions such as the mythical ‘hedge fund,’ trade futures and options, not stocks.  They may ‘invest’ in equities of all stripes but they aren’t trading nearly as much gurgle (NASDAQ:GOOG) ‘n goldilocks (NYSE:GS) as they did previously, in ’09, ’08 or ’07, whether measured by simple volume tallies or aggregate notional value (volume x share price, indexed to tracking currency).

    Even mutual funds (mufu) and pension funds are moving toward allowing portfolio managers bi-directional integrity (the ability to ‘short’ ~ see ‘130 / 30’ funds) … How long before mufu constitutions regularly write 5% derivative allowances (futures & options) into their charters? And when institutions hold equity positions, they’re employing options (and futures) on the underlying to hedge their stakes. They might even be trading around the core or arbitraging the group / space with anything from a simple barbell pair trade (long X, short Y) to some ridiculously capital intensive spider-web to capture ephemeral implied volatility.

    Retail traders buy stocks and hold them, for at least a few days. Many who were trading and many of those who might’ve been trading, see the system as a rigged one.  In many ways it is.  Thanks to the illuminating work of folks like Tyler Durden of Zero Hedge, market participants are at least aware of the high-powered algorithmic adversaries that await their orders across the digital seas of the National Best Bid Offer system (NBBO).  (See also Zero Hedge’s articles Zero Hedge reports in Vapor Volume Resulting In Major Swings Indicates Evaporating Market Liquidity, Latency Arbitrage: The Real Power Behind Predatory High Frequency Trading, and Ever Wonder Who Controls The Endless Gunning In Afterhours Trading? Here Is One Suggestion.)

    So, where has the volume gone?

    Well, it’s still in ‘the market’, just not in markets that most Americans follow.  Volume continues to migrate from US exchanges and common equities (stocks) to global bourses and basic derivatives such as equity options and futures.  For a daily reminder of this trend, check out the news flow over at Mondovisione; you’ll see record volumes across global exchanges of all stripes.  Record notional values on RTS (Russian) oil futures, expanded hours in Hong Kong, triple digit y/o/y growth for Dubai gold futures, shrinking lunch hours in Tokyo. 

    Meanwhile, NYSE Euronext and NASDAQ OMX have gobbled up most regional equity / option exchanges on both sides of the Atlantic while Chi-X and BATS continue to siphon off sizable market share.  On February 11th GETCO was named a DMM (designated market maker) by the NYSE, and on the 12th, the Merc (Chicago Mercantile Exchange (NASDAQ:CME)) broadly expanded its strategic partnership with Brazil’s Bovespa ~ Chicago & São Paulo Marry Futures.

    It’s not that supra-national exchanges have forsaken America or equities, rather they are practicing Wayne Gretzky’s approach to offense and skating towards where the puck is going to be.

    So, I’ll ask you, rather tongue-in-cheek: where is volume going to be?

    NYSE EURONEXT ANNOUNCES TRADING VOLUMES FOR JANUARY 2010

    NEW YORK, Feb 08, 2010 (BUSINESS WIRE) — NYSE Euronext (NYSE:NYX) announced trading volumes for its global derivatives and cash equities exchanges for January 2010. Derivatives trading volumes in January 2010 were stronger, with European derivatives volumes increasing 32.4% and U.S. options trading volumes increasing 102.4% versus prior year. Cash equities trading volumes were mixed in January 2010, with European cash transactions increasing 4.1% and U.S. cash equities trading volumes declining 23.7% from prior year levels, respectively. Both European and U.S. cash trading volumes, however, increased from fourth quarter 2009 levels.

    Animal spirits moved elsewhere but did not die.

    Chopshop believes that trading volume has moved from U.S. Equity markets to derivative markets and foreign markets.  Trading patterns, such as low volume market rises and high volume declines, and the use (misuse) of after-hours trading to generate most of the past year’s gains, show that previously normal market forces have changed. These patterns also support the notion that the public in less involved in market action.  

    Nevertheless, the U.S. Equity market has experienced a dramatic run from the March 2009 lows into 2010.  Chopshop cautions, “whether you are a full-time trader or casual investor, you’re primary concern remains singular: risk management.  Market opinions / biases aside, where financial markets stand today, it is extremely difficult to argue against exercising extreme prudence.  ‘Rationalizations’ of market behaviour (whether brilliant or brain-dead) have nothing to do with effective risk management or tactical allocation.  Bottom line: if you must continue to play in this pool then ask yourself one simple question ~  ‘am I prepared for the possibility of a thunderous typhoon back to lucifer’s lounge round 666 on the INX (S&P 500)?’” 

     

    Disclosure: none
    Feb 28 1:30 AM | Link | Comment!
  • The Top 1% Control 42% of the Wealth - Servitude for the Rest of US!

    Courtesty of My Budget 360:

    financial-wealth-united-statesMany Americans are not buying the recent stock market rally

    This is being reflected in multiple polls showing negative attitudes towards the economy and Wall Street.  Wall Street is so disconnected from the average American that they fail to see the 27 million unemployed and underemployed Americans that now have a harder time believing the gospel of financial engineering prosperity.  Americans have a reason to be dubious regarding the recovery because jobs are the main push for most Americans.  A recent study shows that over 70 percent of Americans derive their monthly income from an actual W-2 job.  In other words, working is the prime mover and source of their income.  Yet the financial elite have very little understanding of this concept.  Why?  42 percent of financial wealth is controlled by the top 1 percent.  We would need to go back to the Great Depression to see such lopsided data.

    Many Americans are still struggling at the depths of this recession.  We have 37 million Americans on food stamps and many wait until midnight of the last day of the month so checks can clear to buy food at Wal-Mart.  Do you think these people are starring at the stock market?  The overall data is much worse:


    Source:  William Domhoff

    If we break the data down further we will find that 93 percent of all financial wealth is controlled by the top 10 percent of the country.  That is why these people are cheering their one cent share increase while layoffs keep on improving the bottom line.  But what bottom line are we talking about here?  The Wall Street crowd would like you to believe that all is now good that the stock market has rallied 60+ percent.  Of course they are happy because they control most of this wealth.  Yet the typical American still has negative views on the economy because they actually have to work to earn a living:

    gallup-economics

    The above daily poll asks Americans about their view on the health of the economy.  Only 13 percent believe the economy is good or excellent.  Funny how that correlates with the top 10 percent who control 93 percent of wealth.  Many Americans were sold the illusion of the bubble.  They were sold on the idea that their homes were worth so much more than they really were.  And many used this phony wealth effect to go out and spend beyond their means.  They started spending as if they were part of this elite 10 percent crowd.  But once the tide rolled out, it was clear they were not.  And the horribly built bailouts demonstrate who is controlling our political system.  This was not the rule of a capitalist system but a corporate run government.

    Just think about the bailouts and which companies were saved.  We ended up bailing out the worst performing and troubled companies thus keeping alive companies that should have completely failed.  Did we bail out Google?  Proctor and Gamble?  Of course not.  These companies actually produce something that people want.  Banks and especially the Wall Street kind merely keep that 42 percent happy by making sure their stock values stay high so they can keep on making money while the average Americans is sold up the river.

    debtYet many were brought into the easy money fold by going into massive amounts of debt.  And who has most of the debt?  That is right, the average American:

     

    The bottom 90 percent have been saddled with 73 percent of all debt.  In other words much of their so-called wealth is connected to debt.  Debt is slavery for many especially with egregious credit card companies taking people out with absurd credit card tricks and scams.  Yet the corporate propaganda machine is strong and mighty.  Have you ever received an inheritance?  A large one?  Probably not because only 1.6% of all Americans receive an inheritance larger than $100,000.  If this is the case, why in the world do politicians worry so much about the tax impacts of this?  Because they want to keep the corporatocracy alive and well so their spawn can get a piece of their pie.  They give the illusion to average Americans that if you only work hard enough you too can join this elusive club of cronies.  The data shows otherwise.

    stock-marketsBut, if we start looking at investment assets, the true wealth in the country, we start realizing why Wall Street is all giddy about the recent stock market government induced rally.

    Of investment assets 90 percent of Americans own 12.2 percent.  The rest goes to the top 10 percent.  Welcome to the new serfdom.  The bailouts that went out to the filthy rich were more about protecting their tiny corner of the world than actually making the economy better.  That is why it is interesting to see companies fire people and Wall Street cheer for the increase in earnings per share.  Good for the few at the expense of the many.  Yet the propaganda out of Wall Street and our government is what is good for Wall Street is good for you.  Just like that 1.6% inheritance issue, the vast majority of Americans won’t deal with that and their primary concern is simply a job.  A job that has provided stagnant wages for a decade while the ultra wealth get richer and richer in a phony form of corporate socialism.

    If you break down the data you realize that most Americans don’t have time to speculate in stock markets:

    incomedistribution

    Only 34% of U.S. households make more than $65,000 per year.  What is that after taxes?  Let us use a state like California for example:

    income

    family-budget-100kNow if we breakdown this data further you will realize that most of the money is consumed by cost of living necessities, not Wall Street speculation.  Just to show this example let us look at a family budget for someone in California making $100,000.

     

    Notice after running the budget we are in the hole for $1,000?  That is because of many costs that typical families have.  We can debate the merits of where they are spending money but the point is this; are these people really making beaucoup money from the stock market?  They are putting away $12,000 a year into their 401k.  As we have now found out, 8 percent a year is never guaranteed in the stock market although the corporate powers would like you to believe that so they can have other suckers to unload stocks onto.

    “Yet the median household income in the U.S. is $50,000 and not $100,000.  They have even less to invest.”

    They are more concerned on working to have a paycheck to pay for necessities.  They are more concerned about paying their house off by the time they retire and hopefully, have a little bit of retirement funds coming in.  The sad fact is most Americans rely on Social Security when they retire.  All those ads of unlimited golf and daily trips to Tahiti are propaganda of how Wall Street lives and they want to sell you the sizzle, and clearly not the steak.  They live their lives paper pushing and sucking the life out of the productive part of our economy.  The average American should now realize this since this financial crisis was primarily caused by them.  They are now on a massive campaign to blame Americans for this. This is hypocrisy to the next level. 

    Many Americans have paid for their mistake by losing their home through foreclosure.  We have 300,000 foreclosure filings a month.  Many have taken a hit to their overall stock portfolio (if they have one).  Yet the corporate cronies have protected their horrible economy crushing debts at the taxpayer expense.  Unlike you, many hold bonds on the companies and not common stock like many Americans.  Bondholders have been protected at all costs during this crisis.  Goldman Sachs through AIG received 100 cents on the dollar for their horrible bets.  The banks have unlimited back stops thanks to taxpayers.  This is how the top 1 percent rule the new feudal state.

    Welcome to the 2010 serfdom.  Time to wake up and restructure the system.  Many people are starting to wake up to this massive scam.

    Feb 26 6:09 PM | Link | 20 Comments
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