Tuesday, February 23, 2010

February 23, 2010 Market Commentary By Art Cashin

Cashin’s Comments

On this day in 1540, one of the most celebrated and important expeditions in
American history began. As you know, it was Francisco Coronado's quest north from
Mexico searching for the fabled "Seven Cities of Gold." Fabled they were - the cities
were said to be set on high plateaus - they were filled with many thousands of people
and buildings taller than any then known - they were so rich that doorknobs were
jewels the size of hen's eggs - and there was so much gold that there were goldsmiths
on every block just to rework the trinkets of an easily bored populace.

The journey (and the fables) actually began several years earlier. In 1527, the king of
Spain had sent Panfilo Narvaez, along with a fleet of ships and 400 soldiers to explore
Florida. The trip was a general failure (no fountain of youth, no tickets to Epcot) so
they headed home. But it was the fall of 1528 and the fleet was hit by a hurricane.
So they sailed for the coast of Texas (and so did the storm). If you've ever seen
newsreels about Galveston in early fall, you might question their decision.

Anyway, the fleet was wrecked and of the 400 plus men, less than 20 survived. And
of this group nearly 3/4ths died of sickness and injury. The remaining handful began
a meandering 5000 mile, eight year journey home. Along the way, the Indians that
they met assumed their strange clothes and strange skin color meant they were gods
or magicians. The leader of the survivors, Cabeza de Vaca, actually began to use
European medicine and first aid - even minor operations. Word of the cures spread
and at each new village the band was greeted by gifts and festivals on their circuitous

When Cabeza asked where some of these grand looking gifts had come from - the
natives told him again and again of the Seven Great Cities "to the North." When the
survivors reached Mexico in 1536, their tales inspired Coronado to finance and mount
a huge expedition that searched fruitlessly for wealth - as far north as Kansas.
Coronado's expedition had two key effects - it inspired further Spanish exploration of
the Southwestern U.S. - and the 200 horses he lost, mated and multiplied - becoming
the mustang and the key to all Indian raids in Westerns.

As far as we know, that was the last time anyone south of the border was induced to
go "gaga" looking for fortune from illusory cities up North filled with people and tall

Traders could empathize with Coronado yesterday. They searched, by circuitous
route, for fortune and wound up with only pain and indecision.

Dollar Moves Little Which Stymies Other Assets – The greenback continued to
consolidate the spike rally that erupted late last week. Yesterday, it moved choppily
sideways around the middle of the spike range. That low-amplitude churning
produced equally anemic reactions in stocks, gold and oil.

The volume shrank as stocks bobbed about following virtually every nuance in the
dollar. News hit the newstickers but the markets key influence was once again the
currency. More precisely, it was the dollar versus the euro. When the euro
weakened, so did stocks, oil and gold.

Research HERE


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