WASHINGTON, June 27, 2013 – As we near the 11:00 a.m. hour this Thursday morning, the Dow and the other averages continue the relatively optimistic upward move they began earlier this week, rallying from extremely short-term oversold conditions. Gold and oil are up slightly, and commodities have taken on a slightly better tone, although coal stocks are close to vanishing without a trace.
In yet another shortsighted, foolish, and politically motivated move, President Obama wrote the obit for coal earlier this week. The likely next move is to release the ERA’s rule-writing Krakens to destroy yet another key economic sector with a thicket of coal-crippling environmental rules, all the better to fight the global warming that never existed save in the minds of a few vicious, Marxist so-called scientists. (For more on the Kraken, see the video below.)
But with Dodd-Frank and Obamacare already in the bag, who cares about a few hundred thousand more jobs going down the tubes anyway? Clearly, the President is far more fearful of the enviro-extremists than his is of the trade unions which foolishly continue to hand him more money to destroy more of their jobs. They are incapable of learning.
This latest sinister, Chicago-style energy move in our opinion is a big smokescreen to deter the environmentalists from raising a stink this fall when the Administration is likely to appear to approve the Keystone Pipeline to shut the unions up in time for the 2014 elections. We italicize “appear” here because any approval will likely come with enough additional EPA restrictions to delay the pipeline’s actual completion to some future time that’s designated in Star Dates rather than A.D.
Also, due to the lack of a pipeline, much of the Bakken Shale oil and likely some percentage of Canadian tar sands production is being shipped now via Warren Buffett-owned railroads, very possibly one of the major (but unreported) reasons why the administration is resisting the pipeline. Can’t offend a major donor now, can we?
Back on Wall Street, it’s very probable that this week’s surprise rally is due to factors so obvious that no one is reporting them. More obvious among these reasons has been the Fed’s jawboning and walking-back activities, which are toning down the recent taper induced crash in bonds even if bonds themselves haven’t improved much. Also, housing numbers continue to improve even though they’ll look lousy next month given the massive increase in mortgage rates over the last two weeks.
Moving right along that short-term optimism curve are reports that China’s economy is supposed to be all right again this morning, even though yesterday it wasn’t. It’s wonderful how the Chicoms can manipulate the compliant financial media. It’s probably one of the reasons why an admiring Obama Administration tries to emulate their totalitarian ways.
But perhaps the most important reason for this week’s rally is the fact that tomorrow ends the second fiscal quarter. Everyone who runs investments and/or portfolios for a living, like bank trust departments, mutual funds, hedge funds, ETFs, and of course HFTs, needs to show swell numbers by COB tomorrow when the quarter’s books are closed. That’s the way they maximize their fat bonus checks.
The swell numbers that they’re all (illegally) window-dressing this week for your edification and amusement in the next quarterly report they send you will be the only ones you’ll see until about October when the third quarter reports hit the streets.
Things may or may not fall apart again next week when all this jolly nonsense is concluded. Next week certainly could be treacherous, given that it’s a short one due to the July 4 holiday. So we’ll continue to watch most of this action from the sidelines as we whisper prayers to the bond gods, imploring them to put the bond vigilantes back to sleep so we can get a decent night’s rest ourselves.
No trading recommendations again today. Good night. We’ll see you tomorrow morning.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
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Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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