TUESDAY 3/11/14; Wholesale Trade; 3-Year Note Auction

The Flight 370 airplane is missing for four days and remains a mystery since there is no debris field. Today is the 3-year anniversary of the tsunami and Fukishima nuclear disaster. The triple meltdown problems continue with thousands of gallons of radioactive water contaminating the Pacific Ocean daily. Japan continues to control the news flow and prevents any negative Fukishima stories. The contaminated water from Fukishima is already at Canadian shores and now reaching US West Coast shores. The BOJ maintains its record easing plan. The dollar/yen is flat at 103.30 and the NIKK gains +0.6%.

The Chinese solar company default does not affect markets to any great extent. A bigger default will likely have to occur to further test the waters. SSEC is flat. Dollar/yuan 6.1388. The monetary tightening in China is good for the long run but in the short run will stall growth. Copper gains +1% after the 2-day drubbing. Copper drops to 3.00 and bounces which is an important multi-year support as well as psychological level.

European indexes are flat. DAX recovers from a 2-day -3% slap lower. BOE’s Governor Carney testifies on the central banks role in the currency fixing scandal. At issue is a Lloyds trader that allegedly tipped off a BP trader concerning a pending currency move. Of course BP denies the claim. Documents hint that BOE knew of currency fixing shenanigans for years but always turns a blind eye. The central bankers and big banks are always colluding on a global basis. One dozen investigators are on the case involving 15 banks and the BOE. 24 traders and others are suspended one from the BOE. Common folks always ask, “Are the markets rigged?” The answer is obviously “yes.” Token fines and slaps on the wrist will likely occur and the good ole boys network will continue. UK banks trade lower. UK factory production tops estimates.

Ex-Ukraine President Yanukovych speaks and says he remains the president and commander-in-chief of the armed forces. He says any new Ukraine elections are illegitimate. Yanukovych appears healthy for taking a heart attack only a couple days ago but does not take any questions. Yanukovych has always been a Putin puppet and the potential curare-induced heart attack (conjecture only) reinforces his loyalty to serve as a mouth piece for Russia. Serve, or die. Russian Ruble 36.38.

Puerto Rico sells $3 billion of bonds at lower-than-expected rates. Complacent traders are buying Puerto Rico’s debt without a care or worry just like investors chasing the sick Spain and Portuguese paper.........






[Text is Redacted: Purchase March 2014-03 to Read the Complete Chronology]

GM drives into the weeds losing -5% after the US Attorney’s office announces a criminal probe into General Motors. Interestingly, several big shot hedge fund investors were buying GM over the last quarter with both hands. Over the last three months, GM has dropped from 42 to 35, -17%. The politicians are no longer bragging about how they saved GM with the bailout years ago. TSLA suffers a setback in New Jersey on a ruling that selling automobiles directly is prohibited. A New Jersey resident would have to buy a Tesla vehicle from a neighboring State and pay taxes which will hurt TSLA sales. TSLA drops -2%.

GSE’s Fannie Mae and Freddie Mac collapse over -30% on news that lawmakers plan to dismantle and phase-out the institutions. FNMA plummets from above 6.00 to 3.40, -55%, then recovers to close at 4.00, down -35% on the day. Congress and the president have ignored this troubling situation for the last five years. The government-sponsored enterprises were created by Congress to support the mortgage industry but have become large and out of control and had to be bailed out during the 2008-2009 financial crisis. Dysfunctional Washington says a firm plan for the GSE’s will be provided in the coming days. The 30-year mortgage may become extinct.

The Flight 370 mystery deepens each hour. The airplane may have diverted to the west which creates a much larger search zone. Vietnam suspends the search since no traces of the airplane are found. A witness says the plane may have been flying very low nowhere near the 35K altitude stated by Malaysian authorities. Notable investor Seth Klarman, the Oracle of Boston, advises clients to become cautious over growing asset bubbles, especially in high flying stocks such as NFLX and TSLA. Klarman says European stocks are not attractive either. The bullish euphoria continues in the markets with bearish commentary extremely scarce. Market technician Tom McClellan is one of the very few bears expressing caution concerning the divergences in the equity charts especially in the Nasdaq 100 Index.