Positive points and a rumor.

A couple of positive developments this morning.

 

One is the news that many cash rich corporations are using the downturn in stock prices to increase stock buyback's or initiate new ones. This will help considerably in putting a floor under stocks and help form a market bottom. It of course might not help in hiring new employees, but right now the market action is top of the mind. It also is positive that these corporations believe their stocks at current prices merit buying. Add in yesterday's news that company insiders were picking up their buying of their own company stocks as well. Since insiders must hold generally at least six months before selling they will not be flipping shares.

 

Two is the tepid response the US Treasury 30 year bond auction got this morning. The buy ratio was about 2 to 1, which is considerably down from previous 30 year auctions. This means that people are moving some money and assets to better yielding assets. The 30 year bonds had to move up yield a bit to get the bonds sold too. Any movement of money from US bonds to stocks and other assets will help buoy prices also and help with some improvement in economic activity.

 

One final note of info. There are reports this morning that some of the news coming out of Europe about France and it's alleged banking failures are nothing more than well placed traders who are trying to protect and enhance short positions in stocks or options. This thinly veiled reference could very well mean George Soros, who has already said he has shorted this downturn and making serious money doing it. There has also been rumors the last week that people in the US administration more concerned with making money for political friends and less concerned with policy are feeding these reports. Who knows who it could be and if it is true, but with options expiration just over one week away it certainly makes sense that people are trying to prolong bad news to protect already profitable positions to final payment.  If stock prices are being manipulated to some extent by large player interests this also could help stock prices going forward as eventually these interests will either make their profits and move on or give up.

 

Now do not interpret these posts to mean anything but what they are, nowhere did I post here that this downturn is over. However today's market action is positive and helps build a bottom as we must ebb and flow to do so.