Stocks and bonds: More air let out of market’s tires every day

Are stocks and bonds becoming victims of Wall Street’s latest slow-motion taper tantrum, or is it just “Sell in May” syndrome? Or both?

Flat tire.
Wall Street is slowly letting the air out of investors' tires. (Image via Wikipedia)

WASHINGTON, May 13, 2015 – We always search for an image to symbolize the trading action on Wall Street every time we post. But lately, metaphor hunting is getting to be a challenge in this listless, sideways market. It’s an environment that has begun to resemble the frustration you encounter when it seems like one of your tires has a slow leak, but you just can’t find it.

With the exception of an occasional exciting rally, traders have been letting the air out of the stock market’s tires slowly and surely since the turn of the New Year. Oh, sure, if you look at the charts and the averages, it seems as if everything is moving sideways, pretty much. But, we suspect, that’s the action of the Crash Protection Team, which, as we’re now finally discovering, is led by the world’s central banks who are actually loading up on stocks to keep the averages from tanking.

David Copperfield couldn’t do any better pulling off one of his famous illusions. Unfortunately, what we’re watching here appears to be just that: an illusion. Wall Street bigwigs, who manipulate markets these days with impunity for their own fun and profit, are happily dumping shares that the Crash Protection Team promptly absorbs to create the illusion that this market is still properly valued or even cheap.

It’s not. Sellers once again are currently dumping investments hand over fist, figuring that with regard to interest rates, this is it, the Fed is going to finally raise them, if not right away in June (highly doubtful at this point), then in September. Or December at the latest. This, of course, is affecting bonds, too, with bond prices moving inversely depending on interest rate perceptions.

Since the bond ghouls figure interest rates are going up, they’ve apparently decided to get there before the Fed, jacking up rates, effectively, by dumping bonds. It’s at moments like this that bond-trader fears can often end up driving Fed policy rather than the other way around. We’ve seen it before, and it’s not pretty.

Adding to this negative mood, the ongoing, almost joke-like charade going on with the Greek Communists, who figure the Germans should continue to pay for Nazi sins by bailing out the legion of Hellenic grafters and crooks accustomed to stealing that country blind.

It’s all part of the “taker” mentality that’s infected Europe since the Second World War and has now been firmly installed here in the U.S. by our Taker-in-Chief, Barack Obama, who’s now managed, BTW, to achieve the unique status of being despised by both political parties: a first, since, perhaps, the ill-starred presidency of Herbert Hoover.

While the Greeks keep the ball in the air, defying fiscal gravity, ISIS and Iran continue to have fun over in the Middle East, liberated from that old pain-in-the-a — U.S.A. by the most myopic, or evil (pick one) dude ever to occupy the White House.

Meanwhile, back in Europe, it’s clear now that the European Central Bank (ECB) is colluding with the Federal Reserve and who knows who else by stopping the waterfall decline of the euro to and below parity with the U.S. dollar. When, a few weeks ago, the euro hit rock bottom at about 1 euro to about $1.04 U.S., another bit of international banking levitation began to manifest.

In short order, the dollar suddenly dropped like a rock, nicking the 1 euro to $1.14 mark about a week ago. After recovering a couple of pennies earlier this week, the buck is heading down again, moving toward regaining its recent high against the euro.

This utterly confuses the international pricing equation, meaning that no company can any longer be sure whether its products are going to get killed on international markets or not, depending on where the currency falls. Now, nobody knows.

They also don’t know what stocks are worth, what bonds are worth, or even if we’re inflating or deflating.

Confused at this point? So are we, and so are the markets, and that’s just our point. It’s all smoke and mirrors leavened with a heavy dollop of government lies right now, so no one feels very much like investing, since odds are, any investment can and will be killed for no valid reason at all.

That’s central bank control, folks, and that’s what we’re getting right now. As of Wednesday’s 4 p.m. close, markets closed “mixed,” meaning, today at least that the Dow closed down nearly 8 points, while the S&P 500 and the NASDAQ were up a bit less than 6 points each. So the tire feels a little flatter if you’re involved in the action or lack thereof.

As has been our pattern for at least a week now, no trading tips today. Seriously, what kind of suggestions can we make when we have no clue ourselves?

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17