10/1/14…Elizabeth Warren to the rescue…one can hope!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My school was so tough,

when the kids had their school pictures taken, there was one taken from the front and

one from the side.” Norm Crosby

Bloomberg Quote of the Day: “Sublimity is the echo of a noble mind.” – Longinus

Bloomberg Top Stories:

*Factory Prices Tumble in Europe as German Manufacturing Shrinks Before ECB

*Stocks Fall on Signs of Euro-Area Economic Weakness, Ukraine Tension; Bunds Climb

*Fed Said to Boost Leveraged-Loan Scrutiny as Low Rates Lift Bubble Concern

*Fat Fingers Seen as $617 Billion of Voided Stock Orders Roil Tokyo Market – !!!

*U.S. Companies Added $213,000 Jobs Last Month, ADP Says, Topping Estimates

*Doral Financial Called Significantly Undercapitalized by FDIC Seeking Fix – !!!

*BlackRock Bond ETF Posts Record Inflows After Gross’s Departure From Pimco

*IMF Urges More Oversight of $60 Trillion Shadow Bank System on Risk Threat

*Endo Said to Pay More Than $400 Million to Resolve Vaginal-Mesh Lawsuits

*Germany Is First G-8 Member Where renewables Account for Most Electricity – Kudos!!!

*UPS Lagging FedEx by most Since ’99 IPO Offers Contrarian U.S. Growth Bet

*Boomer Auto Nut’s $600,000 Man Cave Features Ferrari Parked Next to Sofa

*Ebola Patient in Dallas Had Been Sent Home From Hospital With Antibiotics

*Secret Service Chief Hit by Bipartisan Outrage Over White House Security

*Netanyahu To Tell Obama That Iran’s Nuclear Ambitions Trump Islamic State

*Cameron Pledges Cut for Middle-Income Workerws If Tories Re-Elected

Tuesday’s Market Summary:

…a very weird and inconclusive quarterend. NDQ 100 +0.2%?, Dow Utilities +0.1%, all others down led by the Russell 2000, -1.3%! Dow Transports -0.6%! Dow 30 -0.2%; S&P 500 +0.3%, Nasdaq Composite -0.3%.A/D’s and Breadth negative with just two minor positives in the past six sessions! Volume soared to 3.89B shares on a day that was down-up-down. Shares traded on the NYSE floor jumped to 940M – only the 6th 800M+ day since 4/30. Caution: the VIX rose to 16.29, a big negative.

Total NYSE Volume rose sharply to a 3.89B shares vs 3.07B vs 2.91B vs 3.27B vs 3.4B. Real NYSE Volume rose to 940M shares (669M at the closing bell! vs 654M vs 630M vs 736 vs 734M. There have been just five 700M+ day in 32 sessions! There have been just six sessions above 800M since 4/28! The 12-month average is a historically weak 697M shares. Since 4/30 the average volume is just 664M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were negative: NYSE: –1.7x vs -1.4x vs +2.7x vs -4.8x! vs +1.5x; Nasdaq -2.2x vs -1.3x vs +2.1x vs -4.2x! vs +2x. Breadth was similar: NYSE –2.4x vs -2.6x vs +3.3x vs -10.6x!!! vs +1.8x; Nasdaq -1.6x vs -1.1x vs +4.1x vs -6.8x!!! vs +2.4x. New 52 Week Highs slightly higher again but remain weak:90 vs 71 vs 58 vs 46! vs 57 vs 39!!! – recent range is 39-580!!! New Lows rose again and remain very high 367! vs 322! vs 250 vs 382!!! from 289 – recent range is 24-382!!! S&P VIX took rose slighlty but from a high and bearish level to 16.29 +.31 – highest since 8/8! The range was 15.18–16.43!!! Only two ’12 prints in the last 23 sessions.

U.S. bond market closed slightly weaker: 10 yr 2.48% -3/16; 30 yr 3.20% -5/8; the long TIP closed at 1.07% (record low was 0.87%!) -5/8. Rallying overnight: 2.45% +5/16; 30’s 3.17% +5/8; and long TIP 1.04%! +3/4.  

Libor update: 0.235% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.233% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and has returned to 0.08-0.10%. T-Bills range from 0.01%, one-month, to just 0.09% one year!!! Foreign bond yields lower across the board (Benchmark is 10yr): Germany 0.91%! -4; UK 2.38% -4; France 1.25% -3; Italy 2.30% -3; Spain 2.08% -6; Portugal 3.05% -9; Greece 6.33% -17! – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% –. Bonds remain ‘risky business’!

Gold closed slightly lower at $1211.60 -$5.90, with another new low of $1204.30 in a very narrow range inside session. Last Thursday’s low was $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 31st straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1264, then the 50 day at $1271, and the 200 day at $1284 – incredibly tight and still falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher in a narrow inside session: $1215.00 +$3.40. Silver still trading with a ’17’ handle. Yesterday’s low was $17.08 – lowest since 2/26/2010!!!

Crude hammered on a ‘key reversal’ (higher high, lower low, close below prior day’s low) closing at $91.16!!! -$3.39! Recent low is 9/18’s $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($94.38), then the 50 day ($95.69), and lastly the 200 day (99.56) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight little changed at $91.85 +.69 in an inside session.

Global equity markets WEAK, ex-Korea: UK -0.7% vs -0.3% vs -0.5% vs +0.2% vs -0.1%; France -0.8% vs +1.1% vs -1.2% vs +0.9% vs +0.3%; Germany -0.4% vs +0.4% vs -1.1%! vs +0.1% vs +0.5%; Japan -0.6% vs -0.8% vs +0.5% vs -0.9% vs +1.3%! Hang Seng CLOSED vs -1.3%! vs -1.9%!!! vs -0.4% vs -0.6% vs +0.4%; Korea +1.3%! vs -0.3% vs -0.3% vs -0.1% vs -0.1%; India -0.2% vs +0.1% vs -0.1% vs +0.6% vs -1%. U.S. equity futures weaker but off lows after gapping down on open: Dow -20 (range 60 +11 on gap); SPX -4.20 (9 +6); NDQ -10.25 (28 +6). US market opening accordingly….Dow Transports -130!!! VIX higher.

 

Some random thoughts:

…listened to the Fed tapes yesterday…appalling lack of regulatory control…and influence by Goldman Sachs. We owe Carmen Segarra for risking her job (lost it), and her career to come out…thankfully with a secret tape recorder. Invasion of privacy? How else could she prove it??? Then this morning Sen. Elizabeth Warren outraged over the Fed and its regulatory staff. “why are we held to the law, as well as community and regional banks while the wealthy control the country?” Ignore this at your (our) peril! This is SICK!!! Here is the link again, very disturbing:: the-secret-goldman-sachs-tapes

Have a great day…leaving tomorrow for Venice, Italy, Dalmatian coast, Athens, and Istanbul.

TB

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9/30/14…the Fed loves Goldman…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I’m now at the age that I have to prove that I am as good as I never was.” – Rex Harrison

Bloomberg Quote of the Day: “You cannot open a book without learning something.” – Confucius

Bloomberg Top Stories:

*EBay Plans to Separate PayPal Unit in bow to Icahn Nine Months After Clash – Alibaba?

*Europe Stocks Rise With U.S. Index Futures as Euro Drops to Two-Year Low

*Pimco’s ETF Sees $446 Million One-Day Outflows Intensify

*Russia Said to Weigh Capital Controls If Net Investment Outflows Intensify

*Home Prices in U.S. Climb at Slowest Pace in Two Years, Case-Schiller Says

*Hong Kong Dollar Seen Protected in Face of Rising Civil Unrest – Hang Seng wasn’t!

*Sumitomo Losses of $2.2 Billion Spur Biggest Drop Since ’96 Copper Scandal

*Bill Gross Gets ‘New Neutral’ Endorsement For Rates on First Day at Janus

*News Corp. to buy Real-Estate Business Move in $950 Million Cash Agreement

*Money Funds Zero Rate Pain to Worsen as Fed Caps Repo Role – Fed Funds at 0.01-0.03%!!!

*Hacker Reconnaissance Has Companies Racing to Fix Shellshock Computer Bug

*Death on American Highway Leaves Dozing Trucker Angry at Widower and God

*Hong Kong Protests Swell as Demonstrators Press Demands for Free Elections

*De Blasio Said to Plan Order Raising New York City’s Living Wage to $13.13

*Spain’s Constitutional Court Suspends Catalan Government Independence Vote

*Ending Demonstrations in Hong Kong Poses Dilemma for Xi Jinping in China

Monday’s Market Summary:

…this could be a quarter-end to remember…or forget! Yesterday was totally bizarre! Out of the chute the Dow was down 165, following the futures lead. Then it began its long climb back but never made it all the way closing down42 or -0.3% – same as the S&P 500. Dow Transports were up 0.2%, Dow Utilities +0.5% for honors, while the rest of the pack was off from 0.1-0.2%. NYSE Financials down 0.7% thanks to Brokers which fell 1%. NYSE Volume back up to 3.07B shares but NYSE trades only rose to a 40M below average 654M shares. A/D’s and Breadth were modestly negative. New 52 week highs only up to 71, while new lows rose sharply to 322. So on a mixed day, how did the VIX respond? It rose 7.5% to 15.98 +1.11 with a range of 15.45-17.08 and that folks spells n-e-g-a-t-i-v-e! How will today fare? See below for clues then wait and see.

Total NYSE Volume rose slightly to an average at 3.07B shares vs 2.91B vs 3.27B vs 3.4B vs 3.27B. Real NYSE Volume rose but remains below average at 654M shares vs 630M vs 736 vs 734M vs 719M. There have been just four 700M+ day in 31 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 697M shares. Since 4/30 the average volume is just 663M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were negative and look bad: NYSE: -1.4x vs +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq -1.3x vs +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was similar: NYSE -2.6x vs +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq -1.1x vs +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs slightly higher and remain weak, barely above their new recent low 71 vs 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows rebounced and remain very high 322! vs 250 vs 382!!! from 289 vs 329! - recent range is 24-382!!! S&P VIX took off rising 7.5% to close at a bearish 15.98 +1.11! – highest since 8/8! The range was 15.45–17.08!!! Only two ’12 prints in the last 22 sessions.

U.S. bond market closed strong and traded there all day: 10 yr 2.48% +7/16; 30 yr 3.17% +15/16; the long TIP closed at 1.08% vs 1.05% (record low was 0.87%!) +13/16. Weaker overnight: 2.51% -1/4; 30’s 3.19% -1/2; and long TIP 1.07% -1/2.  

Libor update: 0.235% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.233% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 but PLUNGED o/n and is now 0.01-0.03%!?! T-Bills range from 0.01%, one-month, to just 0.10% one year!!! Foreign bond yields mixed, PIIGS lower, ex-Greece!!! (Benchmark is 10yr): Germany 0.96%! –; UK 2.44% +1; France 1.29% -1; Italy 2.35% -5; Spain 2.15% -7; Portugal 3.13% –; Greece 6.49% +10! – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% +1. Bonds remain ‘risky business’!

Gold closed slightly higher at $1218.80 +$3.40, in a very narrow range inside session. Last Thursday’s low was $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 30th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1266, then the 50 day at $1273, and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is WEAK…$1207.30 -$11.50 – with a low of $1204.00 – still lowest since 1/2/14, but ??? Silver remains with a ’17’ handle with a new low of $17.08 – lowest since 2/26/2010!!! Could break $17 today!

Crude had a very good day closing at $94.57 +$1.03, and a high of $94.61 – both now above the 40/day m/a! Recent low is 9/18’s $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. SUP/RES at the 40 day ($94.55), then further Res at the 50 day ($95.95), and lastly the 200 day (99.58) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight little changed at $94.50 -.07 wit a low of $94.00.

European equity markets higher ex-U.K.; Asia weak: UK -0.3% vs -0.5% vs +0.2% vs -0.1% vs -0.1% vs -1.6%! France +1.1% vs -1.2% vs +0.9% vs +0.3% vs +0.5% vs -2%!!!; Germany +0.4% vs -1.1%! vs +0.1% vs +0.5% vs +0.1% vs -1.5%! Japan -0.8% vs +0.5% vs -0.9% vs +1.3%! vs -0.2%; Hang Seng -1.3%! vs -1.9%!!! vs -0.4% vs -0.6% vs +0.4%; Korea -0.3% vs -0.3% vs -0.1% vs -0.1% vs +0.3%; India +0.1%% vs -0.1% vs +0.6% vs -1% vs -0.1% vs -1.6%. U.S. equity futures slightly higher: Dow +27 (range 73); SPX +3.70 (9); NDQ +16.75 (29).

 

Some random thoughts:

…Michael Lewis should hire a bodyguard…after the article referred to here yesterday, now the Fed as well as Wall Street is going to hate him…want him dead? Here is the link, very disturbing:: the-secret-goldman-sachs-tapes

Have a great day…the quarter depends on it…only one more day for TB, then off to Italy, Dalmation coast, Athens, and Istanbul.

TB

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9/29/14…it’s in the news…sadly!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If a man watches three football games in a row, he should be declared legally dead.” – Erma Bombeck

Bloomberg Quote of the Day: “Intelligence without ambitions is a bird without wings.”

– Salvador Dali

Attached is the next two weeks economic calendar. This week’s economic calendar is packed with important indicators. The highlight of the week will be the August Personal Income (Monday), September ISM Manufacturing Survey (Wednesday), September Employment Situation report and September ISM Non-Manufacturing Survey (Friday). We will also get September Dallas Fed (Monday), July Case-Shiller HPI, September Chicago PMI and September Consumer Confidence (Tuesday), September ADP Employment, August Construction Spending and September Motor Vehicle Sales (Wednesday), August Factory Orders (Thursday), August International Trade (Friday). Courtesy of Economic Advisory Service

Bloomberg Top Stories:

*Consumer Spending in U.S. Increased by 0.5% in August as Incomes Climbed

*Stocks in U.S. Decline With Global Equities; Treasuries Advance – looks very SICK!!!

*Pimco’s Ivascyn to Challenge Janus’s Gross Leading Unconstrained Bond Fund – good luck!

*Lloyd’s Dismisses Eight, Claws Back Bonuses After Libor Rate-Rigging Fines

*Hong Kong Stocks Slump With Currency After Crackdown on Democracy Protests

*Allianz CEO Says It’s Too Early to Estimate Pimco’s Outflows After Gross – …or inflows?!?

*Apple Said to Face EU Probe of Ireland Tax Deals With Starbucks to Follow – not good news!

*Draghi’s Devaluing Euro Cheers ECB as Inflation Seen at Weakest (?) Since 2009

*Gross’s Exit Looming Over Mexico’s Bond Market After Worst Quarter in Year

*Wall Street Cyclists Reassess Need for Speed in City After Death in Park

*Hong Kong Democracy Protests Swell Anew as Crowds Pour Back Into Streets

*Ukrainian Army Suffers Worst Day Since Truce as Fighting Flares in Donetsk

*Islamic State Shells Hit Turkey as Fighting Intensifies in Northern Syria

*Daily Dose of Aspirin May Cut Risk of Prostate Cancer, Study Dhows

Friday’s Market Summary:

Nice rally, huh? Ok, it was better than a ‘dead cat bounce’, which was the most TB expected but that didn’t help the Russell 2000 (which didn’t have one): +0.8% vs -2.1%! The rest were up from 0.9% (S&P 500) to 1.2% (Dow Transports and NDQ 100). Dow Utilities rose 0.4% vs -0.7% to qualify at the goat du jour. Now for the real weirdness: A/D’s and Breadth were both positive but nowhere near the negatives posted Thursday! Now look: new 52 week high barely rose to an extremely weak 58 – second lowest in recent times! Meanwhile, new lows slipped but remain high and bearish at 250! The VIX declined but only from a very bearish 15.84 to 14.86 – and that should cause a high level of concern! NYSE Volume also fell back to an average 2.91B shares while shares traded on the NYSE floor went from an above average 736 to a well below average 630 – for the week the average was 703M shares…only about 7M above the 12-month average!

Should make for an exciting end to the 3rd quarter tomorrow!

Total NYSE Volume slipped to a slightly below average at 2.91B shares vs 3.27B vs 3.4B vs 3.27B vs 3.3B vs 4.65B (3rd highest of last 12 months). Real NYSE Volume also fell to a below average 630M shares vs 736 vs 734M vs 719M vs 697M vs 1.85B – highest since 3/21. There have been just four 700M+ day in 30 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 663M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were positive but nothing in comparison to the negatives in the prior four sessions: NYSE: +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was similar: NYSE +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs barely budged from their new recent low to 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows came off a huge new recent high but remain elevated at 250 vs 382!!! from 289 vs 329! vs 237 – recent range is 24-382!!! S&P VIX volatility declined modestly but only to 14.86 -.78 from 15.84 +2.57 – highest since 8/8! The range was 14.31-15.98 – Thursday’s high was 16.54!!! Only two ’12 prints in the last 21 sessions.

U.S. bond market closed slightly lower – TIPS hit hard though: 10 yr 2.53% -1/4; 30 yr 3.22% -1/8; the long TIP closed at 1.08% vs 1.04% (low was 0.87%!) -1-1/8! Strong overnight: 2.49% +3/8; 30’s 3.17% +7/8; and long TIP 1.06% +5/8.  

Libor update: 0.235% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.233% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and remains 0.08%-0.10%, where it has been for weeks! T-Bills range from -0.01%, one-month, to just 0.09% one year!!! Foreign bond yields mixed, PIIGS weak, led by Greece!!! (Benchmark is 10yr): Germany 0.96%! -1; UK 2.43% -4; France 1.30% -1; Italy 2.42% +4; Spain 2.24% +5; Portugal 3.11% +4; Greece 6.38% +38!!! – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.51% –. Bonds remain ‘risky business’!

Gold closed slightly lower at $1215.40 -$6.50, higher high, higher low following Thursday’s low of $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 29th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1268, then the 50 day at $1274 and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is $1220.50 +$5.10. Silver remains with a ’17’ handle following Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude also had a higher high, higher low, but closed at $93.54 +.04, four days after hitting a low of $90.58 Tuesday, just above the prior Thursday low of $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($94.64!!!), then the 50 day ($96.12), and lastly the 200 day (99.60) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight: $92.99 -.55.

European equity markets weak, Asia mixed: UK -0.5% vs +0.2% vs -0.1% vs -0.1% vs -1.6%! France -1.2%! vs +0.9% vs +0.3% vs +0.5% vs -2%!!!; Germany -1.1%! vs +0.1% vs +0.5% vs +0.1% vs -1.5%! Japan +0.5% vs -0.9% vs +1.3%! vs -0.2% vs closed; Hang Seng -1.9%!!! vs -0.4% vs -0.6% vs +0.4% vs -0.5% vs -1.4%; Korea -0.3% vs -0.1% vs -0.1% vs +0.3% vs -0.5%; India -0.1% vs +0.6% vs -1% vs -0.1% vs -1.6%. U.S. equity futures CRUSHED after opening slightly higher: Dow -154 (range 168!!!); SPX -19 (21); NDQ -43 (52). U.S. stocks opening WEAK!

 

Some random thoughts:

…how about a news roundup…since stocks are getting crushed after their ‘faux’ rally on Friday? Makes sense to TB:

1. Here is an appalling article by Michael Lewis on how the Fed is ‘in bed’ with Wall Street. Very disturbing: the-secret-goldman-sachs-tapes

2. Robert Reich on how the ‘new, improved’ bankruptcy act which took effect shortly after Hurricane Katrina is punishing the working class. GOP got healthcare and student loans removed and shortened the filing deadline…result? Only the rich can file… Bankruptcy-lets-rich-make-risky-bets

Have a great week…only two more days for TB, then off to Italy, Dalmation coast, Athens, and Istanbul…or is it Constantinople?…can’t recall…

TB

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9/26/14…the ‘king’ is dead…and now ‘two-faced’

Quote of the Day from the Friars Club Encyclopedia of Jokes: “The NRA is attempting to lift the ban on machine gun sales. Well, as an avid hunting enthusiast, I’ve been hoping to buy a fully-automatic Uzi. One thing about a machine gun, it really takes the guesswork out of duck hunting. – Mark Russell, political satirist

Bloomberg Quote of the Day: “With the new day comes new strength and new thoughts.”

– Eleanor Roosevelt

Bloomberg Top Stories:

*Bill Gross Will Join Janus Capital Sept. 29 to Manage Its Global Bond Fund – ask El-Erian

*Economy in U.S. Expanded at 4.6% Pace in Second Quarter, Most Since 2011

*Apple’s IPhone Software Snafu Has Links to Flawed Release of Maps Program

*Alibaba Bears Emerge to Short 8.9 Million Shares Following Public Program

*Rocket Is Doubled IPO to Almost $2 Billion to Spur European Tech Listings

*Draghi May Discover Euro at Two-Year Low Doesn’t Buy Enough of Recovery

*Currency Traders Said to Avoid U.K. Fines as Settlements With Banks Near – more sickness!

*Netflix Said to Get U.S. Data Demands in Antitrust Probe of Comcast Deal

*Smartphones Capable of Bending With Skinny Jeans Remain in Distant Future

*World’s Worst Emerging-Market Bonds Explain GVO Cash Crunch in Brazil

*Next for Derek Jeter Is Strengthening All Those Bent IPhones

*Mystery Ban Who Moves Japan Markets Daily Made More Than 1 Million Trades

*Chicago O’Hare, Midway Airports Shut as Fire Breaks out at Traffic Center – Bad – Arson???

*Ex-U.S. General Petraeus Says Ground Forces Needed to Defeat Islamic State

*Obama Loses Confidant Holder as Relations With Congress Get More Difficult

*Polar Ice Research for Climate Clues Means Keeping a Guard on Bear Watch

 

Thursday’s Market Summary:

…just when you thought it was safe to go back in the water. The ‘you’ being anyone other than TB: I’ll take your raise, and call you! Were you ‘all in’? NYSE volume remained well above the average volume since April 30th: 3.27B – it’s 8th consecutive 3B+ day which includes last Friday’s options expiration (4.65B – 3rd highest of 2014). Shares traded on the NYSE floor rose slightly to 736M shares – well above the 12-month m/a and only the 4th 700M+ day in 29 sessions (average volume since 4/30 is just 664M shares!). Worst performer was the Russell 2000 -2.1% (now down 4.6% ytd!)…the quarter is evaporating. The NDQ 100 was next -1.9% (with a huge gap from the Composite which was off 1.6%), note there are 103 stocks in the 100 – surprised? – and 101 of them were DOWN yesterday…the other two only marginally higher! The rest were -1.4-1.6% except Dow Utilities which fell 0.7% but are still up 11.3% ytd – price only! Dow Transports have slipped to +13.3%; Nasdaq Comp +7%; S&P 500 +6.4%; NDQ 100 has slipped to +11.6%. Semi-conductor and Biotech sectors are the strongest still up about 18% but both were off about 2% yesterday…they have to fall too! NYSE Financials are up just 1.9% now! A/D’s and Breadth were horrible…especially the latter: NYSE -10.6x!!!; Nasdaq -6.8x!!! New 52 week lows fell again to a new recent – and near historic low of 46, while new lows charged to 382!!! 2nd highest of 2014?

Look at the VIX: closed at 15.84 +2.57 – a 19.4% gain!!! To a very bearish level. Now look at the last two days changes: -11% vs +9.1% – those are huge moves AND 15.84 (highest since 8/8 is hugely bearish!

Total NYSE Volume remains above average at 3.27B shares vs 3.4B vs 3.27B vs 3.3B vs 4.65B (3rd highest of last 12 months) vs 3.2B. Real NYSE Volume steady at 736M shares 734M vs 719M vs 697M vs 1.85B – highest since 3/21 – vs 676M. Only the 4th 700M+ day in 29 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 664M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were devastatingly negative and have been positive just once in FIVE sessions: NYSE: -4.8x! vs +1.5x vs -2.4x vs -4.7x! vs -1.5x; Nasdaq -4.2x! vs +2x vs -2.3x vs -3.9x! vs -1.9x. Breadth was WORSE!!!: NYSE -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!!! vs -1.6x; Nasdaq -6.8x!!! vs +2.4x vs -2.3x vs -4.4x!!! vs -2.2x. New 52 Week Highs fell to a new recent low of 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows jumped to a huge 382!!! from 289 vs 329! vs 237 vs 159 – recent range is 24-382!!! S&P VIX volatility INCREASED dramatically rising 19.4%!!! vs -11% vs +9.1% and closed at 15.84 +2.57!!! That is highest since 8/8! The range was 14.03-16.69!!! Only Friday and Monday have been below ‘13’ in the last 20 sessions.

U.S. bond market closed strong and is headed towards the low yields of the year: 10 yr 2.51% +1/2; 30 yr 3.22% +1-3/16; the long TIP closed at 1.04% (low was 0.87%!) +1-3/16. Weaker but holding most of gains overnight: 2.52% -1/8; 30’s 3.23% -3/8; and long TIP 1.06% -9/16.  

Libor update: 0.235% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and remains 0.08%-0.10%, where it has been for weeks! T-Bills range from -0.01%, one-month, to just 0.09% one year!!! Foreign bond yields lower – Spain a tad higher (Benchmark is 10yr): Germany 0.96%! -1; UK 2.44% –; France 1.30% -2; Italy 2.36% –; Spain 2.16% +1; Portugal 3.07% -4!; Greece 6.01% -3 – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.51% –. Bonds remain ‘risky business’!

Gold closed slightly higher at $1221.90 +$2.40 but with a low of $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 28th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1270, then the 50 day at $1276 and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is $1219.80 -$1.80 in an insides session. Will $1200 hold??? Important! Silver remains with a ’17’ handle following Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude rallied, closing at $93.04 +.51, this coming off a low of $90.58 Tuesday, just above last Thursday’s low of $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($94.75!!!), then the 50 day ($96.31), and lastly the 200 day (99.62) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is $92.91 +.38 in an inside session.

European equity markets higher??? Asia weak! UK +0.2% vs -0.1% vs -0.1% vs -1.6%! vs -0.7%; France +0.9% vs +0.3% vs +0.5% vs -2%!!! vs –0.1%; Germany +0.1% vs +0.5% vs +0.1% vs -1.5%! vs -0.1%; Japan -0.9% vs +1.3%! vs -0.2% vs closed vs -0.7% vs +1.6% vs +1.1%; Hang Seng -0.4% vs -0.6% vs +0.4% vs -0.5% vs -1.4%; Korea -0.1% vs -0.1% vs +0.3% vs -0.5% vs -0.7%; India +0.6% vs -1% vs -0.1% vs -1.6% vs +0.4%. U.S. equity futures opened higher, then dove and now modestly higher: Dow +33 (range 73!); SPX +2.10 (8); NDQ +8 (18).

 

Some random thoughts:

…is this the ‘dawning of a new bear market’? Yesterday was a huge wake-up call with Sept-Nov being BIG net withdrawal months. A good time to be cautious and alert.

It may be for Pimco as the ‘Bond King’ (sic) Bill Gross leaves…too bad he, who has been wrong on his bets, didn’t leave before Mohammed El-Erian threw in the towel. Where is the $40 million man going? Janus Funds…to manage their biggest bond fund. Outstanding! Know anything about Greek Mythology? Janus has two-faces…and we all know what that means. Two-faced and so typical of Wall Street. That is like Detroit offering a new car and calling it the Lemon…which for GM might not be a bad idea…as it says ‘caveat emptor’ loud and clear.

Eric Holder leaving…tough for Obama. Remember Holder was the guy who said he couldn’t prosecute CEO’s because he worried about the impact on the companies and the shareholders. Not in his job description. What’s it mean? For one thing a tough comfirmation for his successor.

Let’s see how today plays out…probably an ‘up’ day but most likely just another ‘dead cat bounce’.

Enjoy your weekend!

TB

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9/25/14….is Larry Ellison an ‘oracle’?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “New York is a city where everyone mutinies but no one deserts.” – Harry Herschfield …ain’t that the truth! TB

Bloomberg Quote of the Day: “The surest test of discipline its absence.” – Clara Barton, RN

Bloomberg Top Stories:

*Dollar Strengthens to Four-Year High as Metals Fall, European Stocks Rise: Euro $1.27!

*Trujillo Said to Seek $9.6 Billion With Arab Funds for Telecom Italia Bid

*Currency to Oil Benchmarks Trageted as U.K. Aims to Extend Labor Penalties

*Ellison Boost Oracle Credit Line to $9.9 Billion Funding Island, Regattas – are they nuts???

*Apple’s Cook Goes From Record-Breaking Sales to IPhone Software Stumbles – nothing new!

*China Foreign Exchange Regulator Uncovers $10 Billion in Fraudulent Trades – TB‘s shocked!

*Draghi Debt Plan Fuels Longest Winning Streak for Covered Bonds Since 2009

*Deutsche Bank Gains Share in Fixed-Income Market, Closing Gap With Leaders

*Defense Companies in U.S. Climb to Record on Iraq-to-Syria-to-Ukraine Wars

*Harvard Management Winds Up Sticking With What Isn’t Working – fall from grace!

*Sushi Proving Too Expensive in Moscow Where Putin Economy Diminishes Ruble

*Islamic State Oil Sites Targeted in New Wave of U.S.-Arab Strikes on Syria – great!

*Obama Shifts ‘Language of Force’ in UN Speech Against Muslim Extremism – big yawn!

*Billionaire Uvtushenkov Stays Under House Arrest as Court Rejects Appeal

*Zuma Fuels Speculation With Delay in Naming Central Bank Chief Replacement –

South Africa

Wednesday’s Market Summary:

Okay, okay, so the market rallied…at first it looked like it would not gain back the prior day’s losses but then it accelerated in the afternoon, getting the job done. Still, it failed to recover from all of Monday’s losses (note though that the S&P 500 had a ‘lower low’ bouncing from just above the 40 day m/a (1978 vs 1976), and created a positive ‘key reversal’…of sorts). Bears watching!

All indices were up from 0.7% (Dow Transports) to 1.1% (NDQ 100) and readers know how much TB hates it when all the indices move by approximately the same amount, except Dow Utilities which lost just 0.2%, but is now below the 40/50 day m/a’s. The session low of 548 is a multiple bottom (545-549), tracing back to 8/15. NYSE Volume remains just above the 12 month average while shares traded on the NYSE floor remained above 700M for a 2nd day. Now the bad news: new 52 week highs only rose to 57 from a very weak 39, while new lows only declined slightly to a still high 289. A/D’s and Breadth were both positive but less than the magnitude of the two negatives. VIX plunged 11% reversing Tuesday’s 10% rise, but remains in bear territory at 13.27.

Total NYSE Volume slightly higher at an above average 3.4B shares vs 3.27B vs 3.3B vs 4.65B (3rd highest of last 12 months) vs 3.2B. Real NYSE Volume rose again to 734M shares vs 719M vs 697M vs 1.85B – highest since 3/21 – vs 676M. Only the 3rd 700M+ day in 28 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 663M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were positive for the first time in four sessions: NYSE: +1.5x vs -2.4x vs -4.7x! vs -1.5x vs +1.6x; Nasdaq +2x vs -2.3x vs -3.9x! vs -1.9x vs +1.5x. Breadth was similar: NYSE +1.8x vs -2.5x vs -5.4x!!! vs -1.6x vs +1.2x; Nasdaq +2.4x vs -2.3x vs -4.4x!!! vs -2.2x vs +1.7x. New 52 Week Highs up slightly and remain extremely weak at 57 vs 39!!! vs 63 vs 222 vs 205 vs 146 – recent range is 39-580!!! New Lows declined but remain high at 289 vs 329!!! vs 237 vs 159 vs 125 – recent range is 24-329! S&P VIX declined by 11% a day after rising 9.1% but still closed in bear territory at 13.27 -1.66. The range was 13.24-14.93, along with Tuesday’s 14.94, these are highest since 8/15. Only Friday and Monday have been below ‘13’ in the last 19 sessions.

U.S. bond market gave back some of Tuesday’s gains: 10 yr 2.57% -5/16; 30 yr 3.28% -5/8; the long TIP closed at 1.09% (low was 0.87%!) -7/16. Rallying overnight: 2.55% +1/8; 30’s 3.26% +5/16; and long TIP 1.07% +7/16.  

Libor update: 0.234% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and remains 0.08%-0.10%, where it has been for weeks! T-Bills range from -0.01%, one-month, to just 0.10% one year!!! Foreign bond yields lower – even Greece after rising for three days (benchmark is the 10yrs): Germany 0.99%! -1; UK 2.46% -1; France 1.33% -1; Italy 2.33% -4; Spain 2.10% -4; Portugal 3.09% -5; Greece 6.00% -11 – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% –. Bonds remain ‘risky business’!

Gold closed slightly lower at $1219.50 -$1.50, an ‘inside’ session. Tuesday’s high was $1236.10. That followed Monday’s new low of $1208.20, lowest since 1/6/14. This marks it’s 27th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1271, then the 50 day at $1278 and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is $1210.30 -$9.20! Worse, the session low was $1206.60, still lowest since 1/2/14. Will $1200 hold??? Important! Silver remains weak with Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude rallied, closing at $92.80 +$1.24, this coming off a low of $90.58 Tuesday, just above last Thursday’s low of $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($94.95!!!), then the 50 day ($96.49), and lastly the 200 day (99.65) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is $93.05 +.25 in another ‘inside session’. Look at the 40 day!

Global equity markets mixed for a 2nd day: UK -0.1% vs -0.1% vs -1.6%! vs -0.7% vs +0.6%; France +0.3% vs +0.5% vs -2%!!! vs –0.1% vs -0.2%; Germany +0.5% vs +0.1% vs -1.5%! vs -0.1% vs +0.2% vs +1%; Japan +1.3%! vs -0.2% vs closed vs -0.7% vs +1.6% vs +1.1%; Hang Seng -0.6% vs +0.4% vs -0.5% vs -1.4% vs +0.6%; Korea -0.1% vs +0.3% vs -0.5% vs -0.7% vs +0.3%; India -1%! vs -0.1% vs -1.6% vs +0.4% vs -0.1% vs +1.7%. U.S. equity futures slightly higher but little changed: Dow +6 (range 36); SPX +0.20 (4!); NDQ +0.75 (8!).

 

Some random thoughts:

…so Larry Ellison has decided to step down…finally…but face it, he’s a control freak! No way he can keep his fingers out of the pie. Bloomberg story today says ORCL has a $9.9 billion line of credit…used to finance his toys…regatta’s (America’s Cup), and ‘Ellison’s Island’, the one he bought in Hawaii…yep the entire island! Lanai…off Molokai…he owns 97% of the rock…which has a crater that makes for great diving…almost every resident is now paying him rent or working for him. Prince Larry bought it from fellow billionaire David Murdock who had developed resorts there but it turned into a money pit. Enter Ellison who bought it 87,000 acres for $300 million.

Ellison has pledged 5.6% of the market cap against the credit line. That is not a good thing because what if he defaults and that stock hits the market…what, me worry? Right, Larry.

Ellison is worth $43 billion…and still owns $25% of the company…over the objections of advisors who have warned him to divest…which he has done but just this year gained another 3.2 million shares in options awards…Investors better hope he doesn’t kick the bucket. Note that the second biggest investor, BlackRock (4.2%) dumped 7,782,872 shares in the last quarter…what do they know…or fear?

Many know him for the America’s Cup, which he used to ‘extort’ millions in benefits from the city of San Francisco…until they finally had had enough of him. Can you blame them? Should have done it earlier…and his foray into yacht racing was just another of his ‘win at all cost’ ventures. A lot of serious sailors do not approve of his ‘flying wings’ and don’t consider them America’s Cup boats…but in that race, the champion makes the rules.

He is the highest paid CEO…add this to the above and what you have is a narcissist…right?Only a narcissist would have to be the highest paid CEO in a company where he is far and away the biggest shareholder.

Now Investors have successfully lobbied for executive pay (his and co-CEO Mark Hurd, and new co-CEO Safra Catz who will ‘replace’ Larry), based on performance…finally!

…are you in?…or out?

He may be your idol but he sure as hell isn’t TB’s.

Have a great day!

TB

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9/24/14…don’t tax corporations…tax people?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Not only is there no God, but try getting a plumber on weekends.” – Woody Allen

Bloomberg Quote of the Day: “Jealousy is the tribute mediocrity pays to genius.”

– Bishop Fulton J. Sheen

Bloomberg Top Stories:

*Yellen Warning About Unpredictable Rate Timetable Is Ignored by Investors – mistake!

*S&P 500 Index Futures Signal a Rebound as European Stocks Rise – dead cat bounce!

*Pfizer Still Pursuing Inversions Shows Companies Not Deterred by Treasury – see commentary

*Moscow Trading Desks Split by War as Stocks Eclipse Atrophying Bond Market

*Saudi Stocks Lead Middle East Declines on Concern Over Islamist Reprisals

*Lust for IPhone Revives Underground U.S. Device Market as Inventory Lags – lust???

*Wal-Mart Moves Deeper Into Banking With Green Dot Checking-Account Offer – pass!

*Putin Market Freeze Eases After Nine Auction Cancellations – let them suffer!

*Goldman Sachs Currency Trader Parikh said to Join Hedge-Fund Balyasny

*BlackBerry Debuts Square Passport Phone as Chen Seeks Business Customers

*Never Mind What Jack Lew or Bill Clinton or Dave Camp Say – at their own peril

*Potential Ebola Cure ZMapp Sat Dormant Within U.S. Bureaucracy From 2010

*Obama Embraces Role of Indispensable U.S. Confronting Islamic State, Ebola – indispensable?

*Khorasan Group’s Recruiting in U.S., Europe Propels It as Terrorist Threat

*Three French Islamists Fee After Police Waited at Airport 534 Miles Away – ???

*Hillary Clinton Leads $600 Million Education Push for Disadvantaged Girls

 

Tuesday’s Market Summary:

Yet another bad day and once again on above average volume – NYSE stocks AND those traded on the NYSE floor! All indices down led by the Russell 2000 -0.9%, and closely followed by Dow Transports -0.8%…and get this: next was the Dow 30 -0.7%! The rest were down from 0.2% (NDQ 100) to -0.6% (S&P 500). A/D’s and Breadth were negative again, and new 52 week highs came very close to their low of the year: 39! New lows slipped a tad but to a still very high 293! The VIX went on a tear hitting 14.94 then closed just .01 below that! Bearish!

Total NYSE Volume stable at an above average 3.27B shares vs 3.3B vs 4.65B (3rd highest of last 12 months) vs 3.2B vs 3.14B. Real NYSE Volume rose to an above average 719M shares from an average 697M vs 1.85B – highest since 3/21 – vs 676M vs 668M. Only the second 700M+ day in 27 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 662M and that boosted by Friday’s volume. 12 month high is 2.06B shares on 9/20/13!

A/D’s were negative for a third session! NYSE: -2.4x vs -4.7x! vs -1.5x vs +1.6x vs +1.1x; Nasdaq -2.3x vs -3.9x! vs -1.9x vs +1.5x vs +1.3x. Breadth was similar: NYSE -2.5x vs -5.4x!!! vs -1.6x vs +1.2x vs +1.1x; Nasdaq -2.3x vs -4.4x!!! vs -2.2x vs +1.7x vs +1.6x. New 52 Week Highs plunged again to an extremely weak 39!!! vs 63 vs 222 vs 205 vs 146 vs 84 vs 59 – recent range is now 39-580!!! New Lows however rocketed to 329!!! vs 237! vs 159 vs 125 vs 186 – recent range is 24-260! S&P VIX hit 14.94, closing just below at 14.93 +1.24 (+9.1%!). Only Friday and Monday have been below ‘13’ in the last 17 sessions. Note yesterday’s range: 13.83+14.94. Takes out last Wednesday’s double top at 14.53!

U.S. bond market rallied: 10 yr 2.53% +5/16; 30 yr 3.25% +13/16; the long TIP recovered from Monday’s bruising, closing at 1.07% (low was 0.87%!) +1-1/2. Slightly weaker overnight: 2.54% -3/32; 30’s 3.25% -1/8; and long TIP 1.08% -1/4.  

Libor update: 0.236% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and remains 0.08%-0.10%, where it has been for weeks! T-Bills range from zero, one-month, to just 0.09% one year!!! Foreign bond yields slightly lower ex-Greece for a 3rd day (benchmark is the 10yrs): Germany 1.00% -1; UK 2.48% -1; France 1.33% -1; Italy 2.37% -3; Spain 2.15% -4; Portugal 3.17% –; Greece 6.06%!!! +11! – losing ground again from the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.52% -1. Bonds remain ‘risky business’!

Gold closed slightly higher at $1222.00 +$3.20, with a high of $1236.10. This follows Monday’s new low of $1208.20, lowest since 1/6/14. This marks it’s 26th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1273, then the 50 day at $1280 and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is $1221.40 -.60 in an ‘inside session’. Silver remains weak with Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude closed little changed at $91.56 +.04 – coming off a low of $90.58, just above last Thursday’s low of $90.43 – lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($95.16!!!), then the 50 day ($96.63), and lastly the 200 day (99.67) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is $91.30 -.26 in an ‘inside session’.

 

Global equity markets mixed: UK -0.1% vs -1.6%! vs -0.7% vs +0.6% vs 0.4%; France +0.5% vs -2%!!! vs –0.1% vs -0.2% vs +0.6%; Germany +0.1% vs -1.5%! vs -0.1% vs +0.2% vs +1%; Japan -0.2% vs closed vs -0.7% vs +1.6% vs +1.1%; Hang Seng +0.4% vs -0.5% vs -1.4% vs +0.6% vs -0.9% vs +1%; Korea +0.3% vs -0.5% vs -0.7% vs +0.3% vs +0.2%; India -0.1% vs -1.6% vs +0.4% vs -0.1% vs +1.7%. U.S. equity futures bouncing back (dead cat?) with now opening gap and at session highs – prior 4 sessions were ‘rare’ opening gaps: Dow +39 (range 53); SPX +4.90 (9); NDQ +10.75 (13).

 

Some random thoughts:

…if you recall, TB has discussed what Nobel laureate Franco Modigliani proposed two decades ago: a ZERO corporate tax rate! Well, it may be that its time has come. This after the IRS announced a crackdown on U.S. companies moving their headquarters (in name only) abroad to avoid U.S. taxes. That announcement sent Medtronics in the skids yesterday It peaked at $67.11 on Friday fell to $63.11 yesterday after ‘gapping down on the open, and closed at $64.08, -4.5% from Friday’s high. Will Burger King follow suit? It traded to $34.20 on 9/3 following its similar announcement and closed yesterday at $30.33, -11.3% from the high. That company has a problem too because unlike Medtronics, it relies on retail customers who could…and should boycott this tax scam. Time will tell. They have every right to pursue a lower tax rate abroad…but why should we subsidize them doing so? Why should we subsidize WalMart’s (and other big companies) paying their employees so little that they collect food stamps?

So in exchange for no taxes, as Professor Modigliani explained to TB in London years ago, there would be NO more subsidies. Aha! That’s the key…that and since dividends would no longer be ‘double-taxed’, but would instead be taxed as ‘ordinary income’ – which they should because the vast majority of Americans get no benefit since they are in IRA’s and 401(k)’s. Just one more perk of the wealthiest Americans! Kill it!

Let’s look at some of the subsidies? Archer Daniels Midland’s farm subsidies exceed its bottom line! …ethanol is subsidized when it is not even efficient. The list goes on…and on.

Yesterday, former House Ways and Means Chairman, Pat Toomey, proposed a zero rate as outlined above. He said every time he brought it up in Committee, lobbyists called him to say he would destroy their business…and their point is? Of course, this will be an uphill battle, fought by lobbyists, tax lawyers and accountants (including tax preparers who fight any simplification of the tax laws.

Oh, and one last point Professor Modigliani made: companies would then have to evaluate spending on REAL returns not with the added benefit of reducing taxes. Do you think GE should have been allowed to pay NO taxes for the last three decades? …or that the top 200 corporations should pay an average 9% effective tax rate? As an accountant friend once told TB: “show me a company that pays the maximum tax rate and I will show you a company with a bad accountant.

By the way, even Grover Norquist can’t argue against that!

Have a great day!

TB

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9/23/14…ISIL, climate change, and Agent Orange

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Football is not a contact sport. It’s a collision sport. Dancing is a contact sport.” – Duffy Dougherty

Bloomberg Quote of the Day: “Music is enough for a lifetime, but a lifetime is not enough for music.” – Sergei Rachmaninoff

Bloomberg Top Stories:

*Islamic State Pounded as Arab Jets Join U.S.in Expanding Strikes to Syria

*Dollar Weakens as Gold Climbs on U.S. Airstrikes; Stocks in Europe Decline – plunge!

*Lew Crackdown on Inversions Faces Immediate Test With Eight Deals Pending – go get ‘em!

*Citigroup Warns History No Guide When Fed Starts Raising Rates Next Year – concept!

*BlackRock Says ‘Broken’ Corporate Bond Market Needs to Improve Liquidity

*AstraZeneca Falls With Shire on U.S. Plan to Restrict Tax Inversion Deals – and the point is?

*Ruble Still Overvalued After Sanctions-Triggered 12% Selloff – you bet it is and others!

*Ex-Deutsche Bank Trader Hal Lehr Said to Start JPMorgan-Backed Hedge Fund –den of thieves

*Procter & Gamble Selling Its European Pet-Food Business to Spectrum Brands – aarf!

*’Inversion’ Gives Companies Foreign Addresses to Cut U.S. Taxes – that’s basically it, and bad!

*All This Chatter About Climate Change Is Nothing But Hot Air – fires, flooding, heat, cold? Huh?

*Shrinking Bond Desks Populated by Journeymen as Masters of Universe Wither – eh? Sonny?

*Man Shot Dead by Australian Police After Threat to Abbot, Herald Sun Says

*Obama Joins Ban at UN Climate Summit That Falls Short of Forcing Remedies – who are biggest polluters? China and the U.S. – it can’t happen here! Don’t bet on it!

*Our Financial Early-Warning System Still in Need of a Lot of Fixing – what early-wanring???

 

Monday’s Market Summary:

More weirdness…or as they say in the submarine service: “take ‘er down!” …and down it went, led by the Russell 2000 -1.5%! (now down 3% ytd!), then Dow Transports -1.4%, but still up 15.1% ytd. Next came the two Nasdaqs -1.1% and -1%…the composite now up just 8.4% and the 100 still up 13.1% ytd. S&P 500 -0.8% and up 7.9% ytd, the Dow -0.6% but just 3.6% ytd. Dow Utilities didn’t help either -0.8% BUT still up 12.6% so far this year! A funny thing happened with NYSE Financials though (ytd up just 3.8%): while they were off 0.8% (NYSE Brokers and KBW Banks -0.8%, and Nasdaq Banks -1.1%), BofA resumed it #1 most active spot and closed +04% AND barely above $17: $17.02. CNBC was all atwitter about the stock with some saying it was a $30 stock in a year, others even more optimistic for the long-term. Excuse TB if he differs on this! 2nd place went to Alibaba which declined by $89.89 -$4.3% – so far TB’s prediction that IPO day would be the high ($99.70), looks intact…yesterday’s high was just $92.95! Never give a sucker an even break.

Total NYSE Volume fell back to an above average 3.3B shares from 4.65B, 3rd highest of last 12 months, vs 3.2B vs 3.14B vs 3.14B vs 2.76B. Real NYSE Volume also fell back to an average 697M shares with 597M posted at the closing bell, vs 1.85B – highest since 3/21 – vs 676M vs 668M vs 649M. Still just one day above even 700M in 26 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 662M and that boosted by Friday’s volume. 12 month high is 2.06B shares on 9/20/13!

A/D’s were highly negative! NYSE: -4.7x! vs -1.5x vs +1.6x vs +1.1x vs +1.8x; Nasdaq -3.9x! vs -1.9x vs +1.5x vs +1.3x vs +1.2x. Breadth was even worse: NYSE -5.4x!!! vs -1.6x vs +1.2x vs +1.1x vs +2.5x; Nasdaq -4.4x!!! vs -2.2x vs +1.7x vs +1.6x vs +1.9x. New 52 Week Highs plunged by ¾ to a very weak 63!!! vs 222 vs 205 vs 146 vs 84 vs 59 – recent range is 59-580!!! New Lows however rocketed to 329!!! vs 237! vs 159 vs 125 vs 186 – recent range is 24-260! S&P VIX closed back above ‘13’, rejecting the ‘12’ handles of the prior two sessions. Just those two have been below ‘13’ in the last 16 sessions. Note yesterday’s range: 13.13+13.98. Last Wednesday was a double top at 14.53!

U.S. bond market was mixed and mostly lower: 10 yr 2.56% +3/32; 30 yr 3.29% -1/32, the long TIP pummeled closing at 1.13% (low was 0.87%!) -3/4. Stronger overnight: 2.55% +3/16; 30’s 3.27% +3/8; and long TIP 1.11% +1/2.  

Libor update: 0.233% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! The Fed Funds rate has averaged 0.09% since 5/22/13 and remains 0.08%-0.10%, where it has been for weeks! T-Bills range from -0.1%!, one-month, to just 0.10% one year!!! Foreign bond yields slightly lower ex-Greece for a 2nd day (benchmark is the 10yrs): Germany 1.00% -1; UK 2.47% -2; France 1.33% -1; Italy 2.37% –; Spain 2.18% -3; Portugal 3.16% –; Greece 5.94%!!! +16! – losing ground again from the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.53% –. Bonds remain ‘risky business’!

Gold closed slightly higher at $1217.900 +$1.40, but with another new low of $1208.20, lowest since 1/6/14. This marks it’s 25th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1275, then the 50 day at $1281 and the 200 day at $1284 – incredibly tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is rallying – finally – and is now $1233.20 +$15.30 with a high of $1237. Silver remains weak with Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude also closed weak again at $91.52 -.89 – contract switched to Dec. today. It rejected Tuesday’s session high of $95.19 – highest since 9/2. Last Thursday’s low of $90.43 was lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($95.41!!!), then the 50 day ($96.82), and lastly the 200 day (99.70) – 40/50 still falling fast. The range is $85.61-$112.24 since 3/1/12. Overnight it is $91.47 +.60 with a low of $90.58.

Global equity markets WEAK following U.S.: UK -1.6%! vs -0.7% vs +0.6% vs 0.4% vs –; France -2%!!! vs –0.1% vs -0.2% vs +0.6% vs +0.7%; Germany -1.5%! vs -0.1% vs +0.2% vs +1% vs +0.5%; Japan closed vs -0.7% vs +1.6%! vs +1.1%! vs -0.1%; Hang Seng -0.5% vs -1.4%!!! vs +0.6% vs -0.9% vs +1%; Korea -0.5% vs -0.7% vs +0.3% vs +0.2% vs +1%; India -1.6%! vs +0.4% vs -0.1% vs +1.7%! vs +0.5%. U.S. equity futures also weak – gapped down on the open for a 2nd day…following two up-gaps – indecisive???: Dow -46 (range 58 plus 8 on the gap!); SPX -6 (9 +2); NDQ -13.50 (20 +4). FOUR ‘gap’s in a row is unusal…unheard of???

 

Some random thoughts:

…ISIL…(ISIS?) is a problem…too well funded to stop easily…and ruthless in their recruitment: ‘you’re either with us or…DEAD!’ True, they have to be stopped…but how? Sure we have drones, aircraft, but they are like the dreaded Hydra of Greek mythology…or as John McCain would call it ‘whackamole’. This is going to be tough and likely long, with serious implications for the West.

How about those Iranian soldiers in N.Y. for training? Tried to flee to Canada…government is asking ‘why’? TB asks, why not? Wouldn’t you?

Looks like the question of why Turkey is not playing was answered (perhaps): prisoner exchange with ISIL. Of course, publicly denied but the hints are there. Now we will see what they are willing to do. TB will be there in two weeks…might get some answers. Glad we have hotel reservations with all those refugees flooding in.

Off to the VA today to see an old nemesis. His name is Agent Orange…TB was exposed to ‘him’ in 1965…no ‘visible’ effects so far but not taking any chances Update on VA overcrowding: contacted VA in St. Cloud, MN about 1-1/2 hours from here. At State Fair they had a booth and I filled out the form. Two weeks later had an appointment. Meanwhile, on the news Minneapolis VA has 3-4 month waiting period. It pays to shop…if you have the time and transportation (oh, and they will provide transportation if needed!).

TB supports the climate change activists…as did the UN Secretary yesterday. But corporate interests…and not just oil…will fight it tooth and nail. Renewable energy is an anathema to them. Hell, if Rockefeller had had his way we would still be using whale oil…like the Japanese insist on doing. TB is no ‘tree hugger’ just kept an open mind and the evidence is there for all to see…open your eyes…its your children’s future! Meanwhile, the first signs are hitting the island republics…the Maldives…people fleeing as the water rises. Of course, we knew the polar cap was melting at an alarming pace…but so what? So what if meat prices are up because of a drought that could equal the Dust Bowl era. Won’t go further…you know the right thing to do!

Have a phenomenal day!

TB

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