Morning Audibles 6.21.10 - Many Congrats

Before we get started with the weeks activities, CV wants to shout out particular congrats to mcHappy (becoming a father on Fathers Day), and BinT (on the announcement that he's becoming a GRANDFATHER)...

So forget about silly STOCKS are behaving... At least we all know there are a few things out there working as nature intended them to!

On Saturday, we received news that China was going to relax the peg to the dollar... Naturally, equity futures are soaring on this announcement... How long it lasts (or even if it is warranted in the first place is a different topic)...

I read all the headlines from the various sources and it's mind boggling the "justifications" that the POM POM girls make...

If you desire or seek the entire cornucopia of comedy, you'll have to search around and find the articles yourselves (most of them have "China" & "Yuan" in the headlines)... Here are the most agreed upon reasons that tell you why the DOW is now back on a path to 36,000...

The US will be able to sell more goods to China...

(Now that the "value" of FoxConn employees wages will now be worth about 36 cents an hour instead of 34 on a FOREX purchasing scale, they'll all be driving BMW's around instead of jumping out of 20 story buildings)... Oh wait, The US doesn't sell BMW's?... What do we sell? Boeing Airplanes? MSFT & AAPL? (they already can STEAL that)...

Does CV have to go on and get "real funny" with this... Nope! It's the first day of summer (meaning "lazy days" ahead)... So I'm going to only pen "fill in the blanks" comedy... Each will be required to supply your own punch lines...

One guy (from CNBS), even tried to get "technical" (which was a more plausible approach - yet even he failed to deliver the proper summary in the end)...

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(from CNBC)

"The S&P 500 has held above its 200-day moving average since Tuesday, providing a bullish signal, but it has bumped up against resistance around the 1,121 level, the point that marks the halfway point between the October 2007 historic highs and the lows of March 2009.

Orlando said the fact that the index retested and bounced off the low for the year earlier this month is another positive sign, as investors appear to be ignoring negative data in favor of cheap prices.

"If that's happening, that suggests we're going to be back in an uptrend because investors are ignoring near-term noise and are focused on what I think is a very attractive longer term valuation picture," said Orlando.

Orlando said the fact that the index retested and bounced off the low for the year earlier this month is another positive sign, as investors appear to be ignoring negative data in favor of cheap prices.

"If that's happening, that suggests we're going to be back in an uptrend because investors are ignoring near-term noise and are focused on what I think is a very attractive longer term valuation picture," said Orlando."

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Longer term???????????????

The LONGER TERM, still, is that there are still still structural debts & deficits on a global scale, and that the CB's are printing more credit in attempt to paper over and monetize these debts instead of opting for a clearing mechanism... Unemployment is high everywhere, many sovereigns are broke and their citizens are getting increasingly unruly due to fears that they will either lose or be restricted in entitlement benefits they receive...

Nebulous statements of "yuan de-pegging" are NEAR TERM NOISE...

Hey, but whatever "floats your boat"...