Confession of Confident Cluelessness

“This is the most over-bought market I’ve seen in ages.”
Jim Cramer, “Mad Money,” CNBC

After a slow start today, the report that new housing sales increased 11% in June pushed the stock markets up — but not much. (Memeorandum has blog reaction from Don Surber, Calculated Risk and more.)

What does it mean? Short answer: I don’t have a freaking clue. And that’s a good thing.

Compiling this afternoon’s “Wall Street P.M.” report at, I had to sift through a lot of financial news, and I sifted it with the curiosity of a guy who honestly doesn’t know any more about Wall Street than you do (and probably less than some of you).

My office TV was on CNBC today, and there is certainly no shortage of people out there willing to say what it all means. The fact that these people disagree with each other all the time . . . well, where is the truth?

Basic economics, however, I understand. And basic economics — combined with all that sifting through the news — told me that this morning’s housing report wasn’t all that hot. Check out what these analysts told the Wall Street Journal:

“[T]he dismal state of the U.S. labor market will continue to cast a long shadow over the prospects for a meaningful recovery in the sector in the near term . . .”
“[T]he report showed a sharp 6% sequential decline in June suggesting that much of the sales activity was concentrated at the lower end of the market . . .”
“The news sounds better than it looks . . . despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982.”

Also, 31% of June home sales were “distressed” sales, involving foreclosures, etc. Does that sound like “recovery” to you? Apparently, Wall Street wasn’t thrilled, either, and so the market only recorded a minor gain. Meanwhile, the Treasury Department is flooding more than $200 billion of new debt into the market this week, which has people worried about “overwhelming supply.” Oh, yeah, and there was a Monday spike in the CBOE Volatility Index.

What does that mean? I don’t even claim to know, in the sense of whether you should buy or sell or flee to a cabin full of freeze-dried food in Montana and wait for Armageddon. Rebecca Jarvis of CNBC is now chattering away in my left ear about “vector rotation,” and Larry Kudlow is pimping the “big summer rally” — and all this chatter might be very important.

Or not. But I don’t have to know what it means to do a market report at — I just look for interesting facts and pile ’em up. My favorite fact of the day? This quote:

“Last week was dubbed as a good earnings week, but good compared to what?” asked David Hefty, CEO of Cornerstone Wealth Management in Auburn, Ind. “It doesn’t take a lot to get the market excited these days.”

Right. But just don’t ask me what it means. You can figure that out for yourself.

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