Today started off with terrible news, so it should have come as now surprise that the markets would react negatively, drastically and with unbridled violence.
The news that the beloved screen actor and martial arts expert, Jackie Chan, had died of a heart attack swept numerous social media sites, spreading across the globe, saddening fans and traders alike.
On the heels of Thursday’s U.S. market close, Friday should witness a bloodbath in the Asian markets once those markets open, as Chan was held to near diety status. Very fortuitously, the Arab markets are closed on Fridays, in respect of their Sabbath day. Chan is so revered there, in recognition of his early role in a little known Saudi backed film where he decapitated a young Moses, thereby causing the Exodus to never occur.
He is, in fact, held to such high regard within that demographic, that his image is not allowed to be shown in his movies.
Today’s report came several months after the most recent unsubstantiated rumor of Chan’s death, but the market, in its wisdom is never backward looking and ignored the news that the silver screen star was very much alive.
It’s not about accuracy. It’s about the moment. Revisions are routine and routinely ignored.
You could tell that there was obvious tension in the air as CNBC security was called in to separate Jim Cramer and Simon Hobbs from one another. It appeared as if Hobbs was trying to establish mutual consent on the adoption of Queensbury Rules, but the kid from Philadelphia was having none of that.
Although calmer heads eventually prevailed, it wasn’t so for the markets. They needed to vent.
Following the early sell-off came more bad news from Europe. Finland, a economic powerhouse of a country best known for having been usurped by the Soviet Union, joining Hungary as one of only two members of a dead language family and the home of the ubiquitous Nokia telephone, threw a wrench into the Greek bailout.
I would have also mentioned walrus blubber, but the previous sentence was already well past run-on status.
Just as they were getting ready to cross their T’s and dot their umlauts, Finland decided that they wanted collateral on the loans to Greece. On the surface, that wasn’t a problem. but then the FInnish Finance Minister was concerned that the Feta Greece was putting up had a expiration date that was unacceptable to the olfactory enhanced and sensitive Finns.
So our markets reacted accordingly as there was fear that the stink would spread across the European continent.
Oh yeah, and then there was that abysmal report from the Philadelphia Fed. The report showed contraction of factory activity to its lowest level since 2009. Anyone who has waited in line for a Philly Cheesesteak can attest to how long it now takes to shred the Cheese Whiz
But wait, isn’t that when we hit our last stock market bottom?
How great of a sign is that? Good enough to take the Dow from down 200 to down 500.
For those that remember The Haines Bottom, RIck Santelli reportedly called the bottom today. Somehow I missed that, but I did hear him call for $2200 gold, albeit, he warned of a precipitous correction. That would be bad news to come, but probably good news for others.
Today, all of the talk was about “risk-off” and the shift of money into gold. Given gold’s meteoric rise these past few hundred dollars, I still have a hard time seeing how that qualifies as a “risk-off” investment. I still can’t get James Altucher’s remark out of my mind. “It’s only a rock. It’s a rock”.
Real value resided in tulip bulbs. We all know that.
Those may be the most sane words I’ve ever heard uttered. The former. Not the latter.
Later in the day, with about an hour to go until the closing bell, trading was halted in Hewlett Packard.
More bad news.
HP had been another rumor source all day, as word leaked out that it was looking to spin off its PC business and then acquire an Enterprise company named “Autonomy”
Seriously, Autonomy is going to be acquired. Anything incongruous about that?
Well, HP pre-announced its earnings and the stock nose-dived. The fact that they pre-announced should not have come as a surprise to anyone, as HP has a habit of doing that regardless of the CEO du Jour.
What struck me as funny was a comment by Michael Dell.
Yes, that Michael Dell, who suggested that the name of the new HP PC spin-off might be “Compaq”.
Yeah, pretty funny, but Michael Dell is probably not in much of a position to fling stones. In fact, during the first iteration of Szelhamos Rules, he was the subject of “You Can Never Go Back Home“. Read it, especially in light of the warning in the very last line of that blog article.
Of course, if you owned Dell shares yesterday, you weren’t very happy, as Dell just reinvents their own personal bear market. Although after 16 quarters of earnings’ disappointments since Dell’s return, they must surely be approaching Michael Dell’s objectives.
Truth be told, cutting off the “Dude, you’re getting a Dell” guy was like cutting Samson’s hair.
As I watch more erosion of my portfolio at least I was able to come up with a new strategy to make my funds last me through retirement.
Out of necessity comes invention. So I’ve decided to stop taking my hypertension medication. Not only does it soilve the primary problem, but it’s also a very cost-effective way to solve it.
The last bit of bad news still has me puzzled.
For some reason, much ado was made today about the President taking vacation. In fact Yesterday Donald Trump said that he “was told” that President Obama has now taken more vacation than any other President.
How convenient that he could spread that “news” but not take the blame, when its proven to be false. My guess is that he was probably the one who started the Jackie Chan rumor as a way of taking heat off of himself for publicly announcing his beautifully timed purchases of Citibank and Bank America.
Forget that President Obama has taken one third of the vacation time that his predecessor did during the same time period.
It was no accident that Will Ferrel, in a Saturday Night Live spoof, had George W. Bush referring to himself as “your President, 24/7. That’s 24 weeks a year. 7 hours a day.” Where’s there’s smoke, there’s fire.
But, you would think that the President’s opponents would greet his vacation as good news.
After all, if he is to be blamed for the economy and the rapid degradation of Feta cheese, it should be of great benefit to have him take his hands off that steering wheel.
As a fitting end to the trading day and as a unintentional salute to the new norm, Maria Bartiromo said “The Dow Jones Index is off by over 500 points. Its worst loss in a week”.
In a week. Not 2 years, or whatever the previous standard was for time between disasters. Now 5 days seems like an eternity.
Using that new norm, my retirement funds should last at least another 2 weeks.
Now, finally, some good news.
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Copyright 2011 TheAcsMan