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Quote of the Day

Wednesday, February 08, 2012

February 8, 2012 -- Whither goes Greece? The most intelligent words about Greece and the whole situation come from my pen pal, Dennis Gartman. Here's what Dennis says (written Feb. 6):

 

"We've no idea how today's problems in Greece shall be resolved. But we know that some answers will have to be given by the Greek government to her creditors. Greece cannot and will not defy her creditors entirely. Some agreement shall have to be reached today on these demands made of her, but in the end Greece will default. When her next round of massive debt comes due in late-March, Greece will default in some fashion. It is not a matter of if Greece shall default, it is but a matter of how she shall do so.

 

"Simply put, Greece is toast. She cannot and she will not be allowed to remain in the EUR zone. She owes something on the order of 100 billion pounds, give or take ten billion or so, and she needs to roll over two billion this month and 17 billion next. She may make it through this month's requirements, but next month's is probably impossible. But making matters all the worse for Greece is that Spain is in this month for 7 billion pounds and Italy.... poor Italy... is in for a stunning 53 billion pounds. Add in 4 billion pounds for Portugal this month; 7 billion for Belgium 37 for France and 9 for Germany and one has a plate full of debt that must be rolled over ...or... and we really don't know what the "or" can or will bring, but it won't be pleasant. Of that we are certain."

 

It's funny, I can remember when debt was a dirty word. "Neither a borrower or a lender be," said wise old Polonius in the Hamlet play. I can remember when people gave "mortgage parties" when their mortgages were finally paid off. Centuries ago there were debtor's prisons for people who could not pay off their debts. How matters have changed. Debts are now not expressed in dollars or hundreds and thousands of dollars; debts have now graduated to the billion and trillion class.

 

It's interesting to see Fed Chairman Bernanke express disappointment about the growth of the US economy. This will allow him to bring in another QE over coming months. The stock market "jumps" for joy at the thought of more printing of high-powered money. The Fed knows where its power comes from. It comes from the president and a Congress that will be only too happy to see a higher, super-charged stock market.

 

But somewhere ahead, even the Fed's machinations will fail to fire up the stock market and the economy. The longer a market correction is held off, the worse the final pangs when the correction arrives. The current top started in 2008. It has been going on now, with interruptions, for almost four years.

 

Whom the gods would destroy, they first make mad.

 

I just heard that one of my favorite advisors Fred Hickey has suspended publication due to total exhaustion. Fred does a tremendous amount of work for each mailing. I never could see how he did it all. Now Fred is totally exhausted and can't keep it up anymore. What he thought was a simple exhaustion cough turned out to be pneumonia in both lungs. Fred has been a huge fan of gold and has previous stated that gold is his largest holding.

 

Get well Fred, I know what you're going through and it's not worth killing yourself for your subscribers. My best wishes for your recovery, Richard Russell.

 

 

TODAY'S MARKET ACTION:

 

My PTI was up 1 at 6373. The moving average at 6333, so my PTI is bullish by 40.

 

The Dow was up 5.75 to 12883.95.

 Transports were down 24.72 to 5298.61.

 

Utilities were up 0.42 to 452.48.

 

NASDAQ was up 11.78 to 2915.86.

 

S&P 500 was up 2.91 to 1349.96.

 

There were 1763 advances and 1284 declines on the NYSE.

 

There were 175 new highs and 2 new lows.

March crude was up 0.60 to 99.01.

 

Total Volume on the NYSE and associated exchanges was 4.0 bn.

 

Bonds: Yield on the 10 year T-note was 1.98. Yield on the long T-bond was 3.14 Yield of the 91 day T-bill was 0.081%.

 

Dollar Index was up 0.04 at 78.61. Euro was up 0.05 at 132.53. Yen was down 0.46 at 139.88. Currency Prices as of 1 PM Pacific Time.

April gold was down 17.10 to 1731.30. March silver was down 0.49 to 33.70.

 

My Most Active Stocks Index was up 4 at 304.

 

The Big Money Breadth Index was down 2 at 992.

 

GDX was down 0.34 at 55.54.

 

HUI was down 3.94 to 534.17.

 

CRB Commodity Index was down 0.23 at 314.77.

 

The VIX was up 0.51 to 18.65.

Permanent Portfolio Fund (PRPFX) was up 0.12 at 49.36 (previous day closing). YTD Return: 6.83%.

 

 

Late Notes -- Very little selling pressure on this market and feeble buying pressure as well. Meaning we are in an old fashioned line, and a narrow channel of about 5%. Either way the market breaks out of the line, upside or downside, will be critical in the setting of the next trend.