Stock Market Stupidity Stoops to New Lows as Does Oil

By: David Haggith | Wed, Jan 20, 2016
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The stupid train

Lot of people riding the stupid train right now. The stock market opened its third week of the year up 150 points on the Dow and, by midday, proceeded to trip all over its feet again. It is getting funny to watch investors continue to bang their bullheaded, brainless, upper-respiratory junction they call a head against the market's ceiling.

These people must be dumber than eggplants. So, let me have a little fun with a lesson in stupidity here. First, we start with today's news:

"Gains for US stocks continued to disappear after Tuesday's opening surge as a fresh drop in oil prices put fresh pressure on the main indexes...." ~ (MarketWatch)

Even though stocks plummeted in the Middle East on Monday when Iran announced it was coming on-line now that sanctions were removed and that it was raising production capacity, stocks in the US went up on Tuesday. Investors didn't have a chance to bid on Monday because the market was closed for MLK Day. By Tuesday, a tiny spark that said oil prices had nudged up lit fire to a new rally. So, that became reason #1 that the US stock market took off.

It is also proof #1 that storks dancing on a keyboard could produce more intelligent purchases than one finds happening in the US stock market. The big news about Iran was right in front of their faces, and Iran's oil hasn't hit the market yet. So, you have to truly be dumber than dirt to think that any uptick in oil prices meant a thing or that it would last more than a few hours. As a result, as oil trickled back down in price, the sludge-brained market rally caved in.

MarketWatch goes on to quote one analyst as saying,

The market appears to be moving from a phase of traders "selling on rumor or anticipation of bad news" toward one of "buyers coming in to ... scoop up bargains on the actual news."

Bargains? Oh my gosh, the stupid train apparently accelerates into the curves. There are no bargains in an all-out economic collapse until all the unwinding is done. Today's bargain will overnight become tomorrow's head shaker: "Can you believe he paid that much for THAT? Guy must be dumber 'n a fence post." I might as well tank up on gasoline as "a bargain" at $1.90 per gallon when I know a gas station down the road is at 99 cents per gallon.

Moreover, the market analyst above appears to think that today's minuscule uptick in crude prices was the "actual news," whereas the numerous stories that took the market down were just "rumors" of bad news. I think this guy needs solitary time in the Idiot Box. I shall award him my Golden Gobbler Award.

The "actual" and enduring news on oil goes something more like this:

  1. Saudi Arabia intends to crush as many US oil companies as it can and is clearly in this for as long as it can endure.

  2. More than forty US oil companies have already gone out of business. Many more are in line to go out quickly.

  3. US banks are already preparing for a lot more junk bond damage from from financing the oil companies the Saudis intend to kill.

  4. Iran intends to crush Saudi Arabia by driving the price of oil down as hard and far as it can in order to bankrupt the Saudis at their own game because it hates them.

  5. Iran has some of the cheapest production on earth so can afford to go lower than anyone.

  6. Iran doesn't even have to produce the first round of oil. It can flood the markets with oil that is already sitting on ships at sea because it produced that oil while it was under sanctions that kept it from selling.

  7. China created the highest demand for oil, and will not be expanding its now-reduced demand for a long time.

And that handful of points is just the beginning of actual bad news for the oil industry. I'll get into more of it in a minute. So, for the stock market to rise because of some minuscule point rise in the price of crude is akin to thinking Bill Gates gets ecstatic when he discovers a dime under the couch cushion.


Daniel Yergin's Pulitzer Prize-winning account of the epic quest for oil, money and power was deemed "the best history of oil ever written" by Business Week.


Now on to stupid stroke #2:

Tuesday's anemic rebound in stocks after a brutal two-week start came as analysts said a report on the slowdown of Chinese economic growth ... comforted investors who had feared worse.

I practically spewed my coffee onto my computer screen when I read that one. Oh my gosh, these people must actually be stoned if they believe statistics put out by the Chinese government and then sigh in relief when the Chinese government tells them what they were hoping to hear! I laughed until the dog came to check me out.

Cartoon: Think less, Stupid more

Their brains are addled in anesthesia.

Oh, stupidity would seriously hurt if it were not so funny. Who can bemoan the rich losing over a trillion dollars in the last half year when they are this dumb?

I won't even quote what the Chinese government reported for its GDP. I'd rather hear Justin Bieber's guesstimate of Chinese GDP than hear what the architects of the world's most dysfunctional stock market have to say. These are the same failed flops who jailed investors who shorted the falling market, stole the market keys so no one can get inside and trade, and then "fixed" the market by socializing all corporations that were "bargains," snapping them up with the people's money and then saying, "Look, the market has been saved!" Saved like a horse that's just been put down for having a broken leg.

Oh, my goodness, willful blindness is truly astounding to behold. It is a plucked peacock, proudly spreading its tail skin. Today's market was a display of true desperation, looking for a reason to rise. It is a herd of lemmings running toward the lovely ocean view.


Is the real news really bad, or is it really, really bad?

I'm just going to lay out the "actual" oily news in bullet points. That way if any of these investors, who have space to rent in their heads, see this article, maybe they can figure things out easier:

You have to be dumber than sea scum to see all of that and still get frothed up enough to bid up stock prices because oil went up five cents a barrel.

It's almost enough to make the neocons take the US to war in the Middle East to see if they can cut off a few supply lines. That would be a first -- the US government fighting to get the supply of oil lower and the price of oil up?

Be Stupid

 


 

David Haggith

Author: David Haggith

David Haggith
The Great Recession Blog

David Haggith

My path to writing this blog began as a personal journey. Prior to the start of this so-called "Great Recession," my ex-wife had a family home that was an inheritance from her mother. I worked as a property manger at the time, and near the end of 2007, I could tell from rumblings in the industry that the U.S. housing market was on the verge of catastrophic collapse. I urged her to press her brothers to sell the family home before prices dropped. The house went on the market and sold right away -- and just three months before Bear-Stearns and others crashed, taking the U.S. housing market down for the tumble. Her family sold at the peak of the market.

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