Commodities rose 2% today with oil up 5% as money began to flow into the markets again. That trillion in new cash the Fed printed up is having an effect, mostly it’s draining the wallets of the middle class, but hey you have to make money somehow and doing something useful is so 20th century. Where do you think you are, China?
Not everybody on Wall Street is humming a happy tune however, many of the hedge funds that were banking on oil going to $140/barrel were caught flat footed by last week’s flash crash. Many are reported to have taken double digit losses with Clive of London losing $400 million against 5 billion in assets. Rumors are that Goldman Sachs and BoA who dominate the dark pool trading crashed the price to create a buying opportunity.
The USD continues to rise against the Euro even as gold rises (usually the move in opposite directions). This is being driven by traders needing to make margin calls in dollars and at the same time some investors who didn’t go broke from the 15% drop in oil see gold as a hedge against doomsday.
The Obama Adm is talking about ending dark pool trading (these are anonymous back room deals that can be half the market) this has only been legal since 2006 and that by a rule issued the Bush dominated SEC so the SEC could now end it. This has Wall Street insiders spitting nails but Obama has got the upper hand with voters and no amount of money will change that.
Especially if he were to crack down on Wall Street, re-election would be a sure thing. Of course they might try to crash the economy out of spite. There is the law Bush left behind that would make that terrorism at the discretion of the President. Ah yes, time to drift off into a daydream of Seal teams hunting pinstriped terrorists. www.prairie2.com