WASHINGTON, December 11, 2015 – Oil and the Fed are both slamming the tape Friday morning on Wall Street as fresh declines continue to batter shareholders hanging on for dear life, waiting for the Santa Claus Rally to come back out of hiding. At this point, we wouldn’t hold our breath. Friday’s trading action is beginning to look like the title of the final “Road” comedy picture Bing Crosby and Bob Hope are said to have considered but never actually made: “The Road to Oblivion.”
West Texas Intermediate (WTI) dropped below its previous 2015 low to greet traders this morning, touching $35.78 bbl. before recovering slightly—before weakening once again. As of 11:15 a.m. EST, WTI is sitting at around $35.95 again and looking like it might want to challenge that $35.78 handle once again.
The Fed’s Hamlet-like dithering is also taking a toll. First we were going to get a rate hike. For sure. In September. Ooops, we’re not. Because China and stuff. Now it’s December, and we’re going to get a rate hike for sure. Maybe. Well, kinda, sorta.
Maybe we’ll get a 0.125-0.25 percent hike, to be announced next week and taking effect in January. Maybe we’ll get a hike but the Fed will also start QE again, which means we get the punch bowl back and Santa Claus is Comin’ to Town. Or maybe we’ll get what’s suddenly become analysts’ new favorite mantra: One and Done. In other words, one 0.25 percent hike and then another one… whenever. Maybe never.
All of a sudden, bank and insurance company stocks (aka, “financials”), which were getting a little excited about an interest rate hike a couple of weeks ago, have gone back to their losing ways during the last several trading days. These companies seriously need at least a modest rate hike to make it easier for them to loan out money and make some profit, the debilitating Dodd-Frank mess notwithstanding. Their recent slide offers us an indication that whatever the Fed does, it will not be a happy thing for the financials.
Given that the stocks involved with gas, oil, oilfield services, refiners, banks, insurance companies and all their allied financial services businesses and advisors constitute major percentages of the Dow, the S&P 500 and to some extent the NASDAQ, it’s small wonder that all the averages are looking more than a little anorexic lately, starved as they are for buyers while existing stockholders purge away via shorting and tax-loss selling.
It’s all like the Grinch stealing Christmas. Except that it’s worse if you’re involved in this game of monetary Russian roulette via your own investments or your rapidly dwindling 401(k).
Markets are beginning to resemble the weird movie PR poster collage posted back in 2010 on Salon, one of our otherwise least-favorite online publications. Writer Erik Nelson compared the bizarre comedy of two films, “Zombieland” (2009) and Crosby and Hope’s 1946 “Road to Utopia,” finding interesting points of comparison between the post-apocalyptic post-9/11-Great Recession world of this century and the anarchism of post-World War II Europe and America.
The titles of both films, however, provide an ironic commentary on the anarchism of today where nothing seems to work, courtesy of a generation of self-proclaimed socialist “intellectuals.”
At this point in 2015, for anyone with half a brain, Democrat, Republican, Independent or Nutcase, one thing should be intuitively obvious as my engineer friends always like to say: Most of the countries in the so-called civilized world are being run by greedy cretins, jackasses, scoundrels and mountebanks all of whose various schemes for stealing all our money have led us down what’s looking like an economic path of no return. Although they may be temporarily overreacting, today’s market drubbing is merely reflecting this.Click here for reuse options!
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