A Toilet Exploded On Wall Street Today

I have to be brief this evening, but I cannot let this load of crap pass by without comment.

Wall Street extends rally after Fed decision
NEW YORK (AP) -- An already soaring Wall Street extended its advance Tuesday after the Federal Reserve left interest rates unchanged and assuaged some of the market's fears about the economy. The Dow Jones industrial average shot up more than 330 points, and all the major indexes had gains approaching 3 percent.

The market was enjoying a big rally before the Fed meeting as investors responded to a report that services sector activity fell less than expected last month and to another drop in oil prices that took crude as low as $118 a barrel.

The Fed gave stocks another huge push higher in the last hours of trading. In a statement accompanying its widely expected rate decision, the central bank reported that "economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports." That assessment was welcome news to a market that has feared the economy was falling into recession because of weak consumer spending.

Early in the session, shares rose sharply after the Institute for Supply Management, the trade group of corporate purchasing executives, said its services sector index rose to 49.5 from 48.2 in June. Analysts surveyed by Thomson Financial/IFR predicted it would rise to 49.0.

Any reading below 50 signals contraction. The report is based on a survey of the institute's members and covers such indicators as new orders, employment, inventories, prices and exports and imports.

The notion that the sector might be in better shape than many investors feared gave Wall Street reason for optimism.
http://biz.yahoo.com/ap/080805/wall_street.html


..."economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports." What a honey pot that nonsense is. Economic activity in the second quarter was barely above water ONLY because of the $168 BILLION dollar handout from the government. To suggest otherwise is blatantly misleading and a lie. Oh but the Fed said so, so all the world's problems have been solved. BAH!

Just yesterday we got this headline:

Rising prices stifle impact of stimulus payments
US consumers dig in amid rising prices, softening impact of government stimulus package

In June, the second biggest rise in prices in nearly three decades muted the impact of billions of dollars in government stimulus payments, government figures showed Monday.

Incomes barely budged in June and consumer spending retreated after taking into account the higher prices for food, energy and other items, the Commerce Department data show.

Consumer spending was up 0.8 percent in May and 0.6 percent in June, the Commerce Department said. Those increases were slashed to a modest 0.3 percent increase in May and a drop of 0.2 percent in June, however, when adjusted for rising prices of gasoline, food and other products. Incomes rose just 0.1 percent.

An inflation gauge tied to consumer spending jumped by 0.8 percent in June. That was the second biggest monthly increase since 1981.
http://biz.yahoo.com:80/ap/080804/economy.html

The only thing growing in the second quarter was the rate of inflation and the federal deficit. To suggest otherwise is deceitful.

The ISM Purchasing Managers Index rose to 49.5! Yeha! And it was "BETTER THAN EXPECTED"! Yeha! Never mind the fact that any number below 50 equals contraction. It was BETTER THAN EXPECTED! The delusion is mind numbing. Doomed is too tame a word for the future of this lost nation.

Gold and Silver were battered in the rush to euphoria. Today was a mega short squeeze in the general equities, and nothing more. Gold and Silver and their related shares the victims of naked short selling. Of course that is only illegal if it threatens a broker dealer for the US government, or two insolvent mortgage flippers.

I continue to watch in amazement, and I continue to laugh at it all. None of this is real and will only make more damaging the eventual fall. Nothing has changed...the financial system still rests on the edge of a cliff. The housing sector will continue to slide lower. Home foreclosures will continue to rise. Banks will continue to bleed from the credit derivative mess they have created. Jobs will continue to be lost. And the Dollar WILL get crushed. Gold and Silver are your only protection from the Doom on the horizon...DO NOT BE PERSUADED TO LEAVE THEIR SAFETY to chase this bear market rally in general equities, it will all come crashing back to earth in short order.