MARKETS

Yeah, they fucked you again
Today's error at the CBOT Dow Mini electronically traded futures contract is bad. Technically everyone hit should get damages, but the big boys never pay damages they just inflict them. This "glitch" which allowed a trade of 10,000 contracts to go through when the actual order had been to sell 100 was a bombshell. This contract is lightly traded. Total open interest was only 22,000 contracts and an order for more than half the outstanding contracts on the exchange could never have been placed on the floor. This contract is basically a joke because the volume has never matched expectations. Open interest on the S&P is over 600,000 contracts for the same month. This was bullshit. No computer program should have allowed this trade. Most of us know that "open outcry" is the best, and for this very reason as well as many others some of which will be deliberate tampering. If you were "stopped" out today you might want to re-insert a buy order at the exit point.

Gold and Currencies The dollar rally and big gold sell off has more to do with the attractiveness of the U.S. Stock Market than anything else. Gold is a piece of shit that pays no dividends and needs a price rise in order for the holder to make money. The dollar is being bid higher because foreigners are buying U.S. stocks and need dollars to do it. We will see if the currency doesn't turn one more time. I'm a dollar buyer or a Euro seller on the next move after a big pullback.

Unemployment numbers These numbers ain't good, but it will be the numbers "under the numbers" that we have to look at and they are terrible:

The economy has shed more than three million private-sector jobs since the start of 2001. The number of initial claims for unemployment benefits, moreover, has remained above 400,000 for 20 consecutive weeks. Economists regard any number above 400,000 as suggestive of a deteriorating jobs market. SmartMoney.com

This better turn around soon or a lot of us will be bailing. The government has done everything it can; lower rates, lower taxes, defense spending, and huge budget deficits but nothing has worked, yet. The stock market is a leading indicator and unemployment is a lagging indicator but we are getting to crunch time.