10/20/14…bankers, ebola, and a correction on Friday’s gold comment

Quote of the Day from the Friars Club Encyclopedia of Jokes: “It’s going to be fun to watch how long the meek can keep the earth after they inherit it.“ – Kin Hubbard

Bloomberg Quote of the Day: “In nature, there are neither rewards or punishments – there are consequences.”                             – Robert C. Ingersoll

Bloomberg Top Stories:

*ECB Said to Start Covered-Bond Purchase Program With French, Spanish Debt – Bad idea?

*European Stocks Decline With U.S. Index Futures as Earnings Miss Estimates –c’est la vie!

*Leveraged Money Spurs Stock Market Selloff wit Record Trade in Treasuries – a warning?

*Secret Slack Weighs on Job Market as Yellen Fed Ponders When to Lift Rates – not now!

*IBM Abandons 2015 Forecast as Rometty Divests Globalfoundries; Shares Fall

*Value Investors Hoarding Cash See Few Bargains After Worldwide Stock Rout – do tell!

*BlackRock Sales in Best October Since 2001 Show Muni Rally Limits – caution flag!

*Canadian Pacific Says It’s Ended Exploratory Talks With CSX on Rail Merger

*S&P Unmoved by Brazil’s CSN Debt-Cutting Plan as Bonds Post Slump

*Unload or Reload Is Question for Investors as Monday Arrives – TB picks the latter, or hold!

*Oil Workers Earning $179,000 Expose Wealthy Norway to Crude’s Price Crash – $2.85 in MN!

*Nigeria Declared Ebola-Free by WHO With Affirmation Disease Can be Stopped – panic here!

*Russia Vows to Refuse Conditions for Ending Sanctions After Ukraine Talks

*U.S. Military Drops Weapons, Ammunition to Kurd Forces in Besieged Kobani

*Efforts to Contain Ebola’s Spread Show Signs of Working Beyond West Africa

*Spain Ebola Patient Seen Free of Virus After Negative Test, Better Health

*Two Female Japan Ministers Quit on Same Day in Blow to Abe’s Equality Push – stocks rally!?!

*The $2 Trillion Megacity Dividend China’s Leaders Are Undermining – heed this!

*Clinton Super-Pac Spending $1,000 an Hour to Build Database, Court Voters

This week’s economic calendar is full of important indicators. The highlight of the week will be the September Retail Sales and September PPI (Wednesday). We will also get September Treasury Budget (Tuesday), October Empire State Manufacturing, August Business Inventories and Beige Book (Wednesday), September Industrial Production and October Philadelphia Fed Manufacturing (Thursday), September Housing Starts and October Consumer Sentiment Preliminary (Friday). Courtesy of Economic Advisory Service

Friday’s Market Summary:

Oh what an options expiry it was! All indices up from 1% (NDQ 100?) to 1.6% (Dow Industrials), except Dow Utilities which were up 0.7% – wait, doesn’t that tell you something…why utilities? Got a better one for you: VOLUME! Sure it was solid but we finally get a rally and the volume is just 4.45B – ok, not ‘just’ but the lowest since 10/10! Trades on the floor were a still well above average 1.07B shares but volume at the bell was 853M shares…the point is that it appears to be more options related than real buying. Color TB ‘skeptical Perma-bear? Dow Futures are down 90 this morning…also the close at 16,380 and even the session high at 16,427,was a far cry short of even the 200 day m/a at 16,586! S&P 500 closed at 1886, 200 day 1906; Russell 2000 1082 vs 1147…if it is more than ‘Memorex’ there is a lot of heavy lifting to do and overnight market suggests there ‘may’ just be a problem. A/D’s and Breadth were positive but the highest was just 2.9:1 – a pittance compared to those down session. New 52 week highs nearly doubled but only to a WEAK 83, while new lows plunged to a more normal 67 from 311…but it is hard to create new lows on a rally that exploded right out of the chute, no? Lastly, the VIX declined but only to a still very bearish 21.99 -3.21…bears watching…

Total NYSE Volume slipped again to a still high 5.05B shares vs 6.06B : average volume for the first 13 trading days of October is now up to 3.73B, or about 730M more than the recent average. To show that the ‘drought’ of trading has ended one needs to look at shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: for October it is now 920M shares!!! For comparison purposes, for the prior 12 months it was a historically weak 709M shares…but for the last 13 days 933M shares including Wednesday’s HUGE 1.22B shared day – highest since 9/19 while the low was 10/6’s 696M share session. April 30 – September 30 we had nust SEVEN 800M shares…for October so far? ELEVEN, including FIVE 900M plus share days. Yesterday at the bell volume was a high 827M shares but beginning to slip and could return soon to the sub-600M share days of September…worth watching! Nobody said this was going to be easy!

A/D’s were positive but look: NYSE: +1.9x vs +2.3x vs -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq 1:1 vs +2x vs +1.2x vs +1.6x vs -2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth was a little better: NYSE +2.9x vs +1.7x vs -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +1.8x vs +1.4x vs +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs surged but reamin WEAK at 83 vs 52 vs 49 – their range for the year is 39-580!!! New Lows plunged to a more normal 67 from a high 311 from 1043!!! – lowest for October was 176. But it is hared to get new lows on a strong day like Friday.The 2014 range is 24-1043!!! S&P VIX has gone from ‘put’ protection being cheap on 9/18 at 12.03 to 21.99 vs 25.20 vs 26.25 – remains EXTREMELY bearish as indicated by the high Wednesday of 31.06 – highest since 11/28/11!!! The average of the past 12 months is 13.83, with a low of 10.32!

U.S. bond market was in the red all day – not surprising the strength of stocks on optons expiry but remain near their new 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), closing at 2.20% 10’s -3/8; 2.97% 30’s -13/16; and the TIP 0.89% -3/8 Better overnight: 2.18% +1/16; 30’s 2.95% +5/16; and long TIP 0.87% +7/16.  

Libor update: 0.231% 3 mos.; 0.233% 6 mos., both just above new record lows! The Fed Funds rate has averaged 0.09% and is now 0.08-0.10%. T-Bills range from 0.03%, one-month, to just 0.10% one year!!! Foreign bond yields mixed’ Italy, Spain, Portugal weak (Benchmark is 10yr): Germany 0.84%! -1; UK 2.16% -3; France 1.30% –; Italy 2.52% +3; Spain 2.19% +3; Portugal 3.37% +10!; Greece 7.81% +1: from 8.69% Thursday! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.48% +1.

Gold closed slightly lower in a narrow session, two days after gapping up to its highest since 9/11/13 ($1247), closing at $1238.30 -$2.90. Still only two prints below $1200 since 12/31/13 – back to back and rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! SUP/RES is the 40 day at $1238, then RES at the 50 day $1251, and the 200 day at $1284. 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 lower at $1236.80 -$150 in another very narrow range. Silver holding in the mid- ’17’s after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!

Crude closed little changed at $82.75 +.05 in a narrow inside session. Thursday’s high $84.83, low $79.78…lowest since 6/27/13!!! There have now been 28!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($91.09), then the 50 day ($92.16), and lastly the 200 day (98.79) – all dropping again. The range is now $79.78-$112.24 since 3/1/12. Overnight slightly higher and tight at $8307 +.32.

European equity markets weak. Asia higher, led by the highly volatile Japan along with Korea and India: UK -0.9% vs +1% vs -0.7% vs -2.8%!!! France -1.3%! vs +2.1%!!! vs -1.1% vs -3.6%!!! Germany -1.4%! vs +2%!!! vs -0.4% vs -2.9%!!! Japan +4%!!! vs -1.4% vs -2.2%!!! vs -2.4%!!!; Hang Seng +0.2% vs +0.5% vs -1%! vs -1! Korea +1.6%! vs -1%! vs -0.4% vs -0.7%; India +1.2%! vs +0.4% vs -1.3% vs closed. U.S. equity futures weaker but off session lows after gapping up on the open for a 2nd day? Dow -76 (range 197 +71 gap!!!); SPX -1.60 (20 +7); NDQ +5 (28 +27)

 

Some random thoughts:

…readers know how disgusted TB has been with the governments decision to fine corporations for their crimes in creating the financial crisis. This has upset me more because of the failure of long term associates in the business to assess blame on OUR industry, instead saying either ‘everyone was to blame’ or denying any culpability of their firms…even those from Lehman and others whose management destroyed them. This is a type of denial on a par with the Germans over the holocaust!

Certainly an obvious ‘culprit has emerged in the retiring Eric Holder, but as the interview with William Black shows…it went up the chain to both Bernanke and Geithner, and even to Obama himself (not that the Bush administration was any better). It is a shocking report by a veteran federal prosecutor of the S&L crisis. How come Paulson preached clawbacks and none have been enforced…none! How come he encouraged banks to pay more in bonuses at a time that investors in the banks were suffering along with Main Street. The answers are all here…and if you want more watch the other interviews shown on the Moyers & Co website…it is a travesty.

As for the ‘record fines’, they are a joke…a pittance compared to the money that was made by the banks, and as Black points out they were to ‘silence’ investigators so no one was prosecuted. Not just the CEO’s but their minions who they feared would testify against THEM! Besides the ‘little people’ (shareholders) paid them while the CEO’s (most notably Jamie Dimon), continued to increase their bonuses…and stock option awards at depressed prices…how sick can it get? Not much sicker…except when you look at the price Martha Stewart paid for just one ‘insider’ trade (which in the end was a bad decision as a year later the stock was higher! Were TB Ms. Stewart – he would be livid.

But the worst part is how Wall Street is using this newfound wealth…to buy Congress and the government…it was this Jamie Dimon-led group that put up the money to get Obama elected (first over Clinton in the primaries, and then over their own brother, Romney!). This has got to stop and we are running out of time. We have forgotten how Sen. John McCain and four others were the Keating Five. Five? Now there are dozens if not hundreds in Congress who owe their well-being to the financial sector. Time is running out.

As Black said, “the biggest enemy of capitalism is…capitalists!” If you doubt this, go on and believe in our stock market being representative of economic well-being…”to the moon, Alice, the moon!!!”

Lastly, Black was asked by Moyers if he thought another financial crisis was possible…possible? He said it was a certainty…the government has encouraged it…and WE, the people, will pay for it…again…and again…until we put the financial sector in its place! This will take a grass roots effort (like the ill-conceived Tea Party and Occupy Wall Street), but do we have the stomach for it? TB finds that dubious…at best.

Bill Moyers – William Black interview

Correcting Friday’s gold story (thanks to a friend!). When I first mentioned the ‘gold cube’ to our guide in Istanbul I said a 50 foot cube…but she was so skeptical I tried to recall and thought it was either a 100 foot or 150’ cube. We were standing in Hagia Sophia at the time so it was all a blur. Here is a correction of what I wrote…note that part of my confusion was that a lot of gold has been mined since then. Changes are in italics:

When TB was working in Nevada 34 years ago, he attended a meeting of mineralogists. They said that in the entire history of the world, the total amount of gold extracted would fit inside a 50×50 foot cube. Think about that…as TB did when he was in Istanbul. His guide looked at him incredulously (obviously more has been extracted since then but certainly isn’t being horded by governments…especially the UK which is why they always say, “God save the queen!” In the U.S. we use another phrase: ”in God we trust” which of course replaced ‘payable to the bearer upon demand in gold/silver’.

Taking it a step further, a 50 foot cube is125,000 square feet, and if you crammed people (6’ tall) in it, it would hold 3,472 people…or more accurately, ‘bodies’, as no one could breath.

This brings us to the Gold ETF’s. Believe it or not there are now 39 funds that are invested in gold/silver…the largest being the Spyder’s (GLD) with a market cap of $30.33 billion! Taking the price per once at yesterday’s close ($1,233), that is 2,459,854 ounces of gold. At the peak that value was equal to nine years of production!!! See why it has plunged? That is not to say these funds don’t have gold to back them up but it does explain why they have fallen 34% since peaking on 8/19/11! All that glitters is not —-…even if it is!

TB’s friend provided information from Warren Buffett from about two years ago: the cube has now grown to 68 cubic feet or 314,432 cubic feet (8,734 people).

So TB was actually correct in his first assessment…another reason to not over-think a question!

Watching the talk shows, the lead-off story was Ebola…with the Republicans, Bill Crystal, Mary Madeline, and a host of GOP congressmen, calling for a ban on Africans coming here. Today, as the headlines show, the crisis is diminishing. It is shameful to use something like this for political purposes but remember, politicians have no shame. That includes the three former public officials running again for office – all convicted of bribery charges and all saying they were wrongfully convicted….just like all of the others would say in a prison. Shame on the voters if they elect them!

Have a great week!

TB

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10/17/14…all that glitters…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “did you know that in some countries the penalty for shoplifting is marriage?”- Anon

Bloomberg Quote of the Day: “The shell must break before the bird can fly,” – Alfred, Lord Tennyson – and before you can scramble the eggs! TB

Bloomberg Top Stories:

*Morgan Stanley Beats Analysts’ Estimates as Trading Revenue Rises – yawn!

*Stocks Jump With U.S. Futures as Italian Bonds Gain on Stimulus Bets – options expiry!!!

*Pimco to Blackstone Preparing to Feast on Junk Bonds After Surge in Yields – caution!

*Yellen Says She’s Greatly Concerned by Growing Inequality in U.S. – Do tell, Janet!!!

*Ten Reasons to Be Optimistic on Global Economic Growth in Cruelest Month – name one!

*Synchrony Profit Tops Analyst Estimates in First Earnings Report Since IPO

*Canada’s Inflation Rate Slowed to 2% in September on Lower Gasoline Prices – $2.85 in MN!  

*Dalio’s Bridgewater Said to Post $1.7% Loss in October During Market Rout – heed!

*Louis Vuitton Can Thrive in ‘Tough Times’ as Chinese Slowdown Hurts Sales – slowdown?!?

*Brazil’s Stubborn China Fever Sticking Farmers With Losses as Soy Plunges – gung hay!

*Monaco Murders Reveal Six Hidden Real Estate Billionaires From Pastor Clan

*Obama Says He’s Open to Naming Ebola Czar as Concern Over Spread Increases L

*Merkel Signals Standstill on Ukraine Talks as EU Leaders Meet With Putin

*Texas Lab Worker Isolated Aboard Carnival Ship on Possible Ebola Contact

*Nepal Rescue Workers Airdrop Noodles to Trekkers After Blizzards Kill 28

*Biden’s Son Said Discharged From Navy After Testing Positive for Cocaine

*Europe Wants Bankers to Stop Worrying About Their Paychecks – but in the U.S.? Hah!

Thursday’s Market Summary:

A mixed day but spent mostly in the RED. Volume was another BIG 5.05B shares (1.07B vs 1.21B shares traded on the NYSE floor!!!), vs that huge 6.06B share day Wednesday! Why so much volatility in the first month of a new quarter? Well, for one, today is options expiration and a lot of folks had the wrong foot on the floor! Now look at this:

  1. Dow Transports rose 1.1%; The Russell 2000 (years big loser) roe 1.3%
  2. Nasdaq Composite up 0.1%; NDQ 100 DOWN 0.6%?

The rest ranged from +0.2% to +0.1%…except NYSE Financials which fell another 0.9%: 2.6% in two days! The S&P VIX declined 1.05 to 25.20 but look at the range: 24.61-29.41 – bad news for bulls! A/D’s and Breadth positive but not compared to the recent negatives! New 52 week lows dropped from that monster 1,043 but to a still high 311 while new highs barely budged to an extremely weak 52 from 49.

Repeating (these are as of Wednesday but you get the point): Before we look at the skeleton, here are the ytd price changes (PRICE ONLY!!!): Dow -2.6%! Dow Transports +7.3% (less than half of 9/30 gains – +8.3% adding dividends)! Dow Utilities…now the unchallengeable leader for the year +13.9%!!! (adding in dividends, UP 17.1%!!!); Russell 2000 despite yesterday’s nice move, DOWN 6.9% for 2014!!! What about the other leader you say? NDQ 100 is now up just 6.4% this year but still up 18.2% for the last 12 months. Lastly, the ‘health’ index…NYSE Financials…recall that they peaked in June 2007 well before the crisis began…a warning shot across the bow! For the 12 months they are now up just 6% since 9/30/13 – and to show the damage of the past two weeks, now DOWN 1% for the year! That includes those niggardly dividends that TB loathes…the only reason to buy ANY bank stock!

Total NYSE Volume slipped to a still extremely high 5.05B shares from 6.06B shares…and that isn’t the worst part: average volume for the first 12 days of October is now up to 3.625B, or about 625M more than the recent average. To show that the ‘drought’ of trading has ended one needs to look at shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: since 4/30 the average Has run just 690M shares…for October it is now 908M shares!!! For comparsion purposes, for the prior 12 months it was a historically weak 708M shares…but for the last 12 days 908M shares including the last two days of 1.07B and Wednesday’s HUGE 1.22B shared day – highest since 9/19 and the low was 10/6’s 696M share session. Since April 30th we ‘had’ had just SEVEN sessions of more than 800M shares…for October so far? Now TEN…think about that: one day missed by just 10M shares. Crazy! Crazy bearish! Yesterday at the bel lvolume was 918M SHARES vs 992M…retail is scared! The 12-month high was 2.06B shares on 9/20/13!

A/D’s were positive but look: NYSE: +2.3x vs -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq +2x vs +1.2x vs +1.6x vs -2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth was similar: NYSE +1.7x vs -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +1.4x vs +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs only slightly higher at 52 vs 49 and haven’t been above 77 since ending at 49 yesterday – their range for the year is 39-580!!! New Lows dropped sharply but to a still very high 311 from 1043!!! – lowest for October is 176. The 2014 range is now 24-1043!!! S&P VIX has gone from ‘put’ protection being cheap on 9/18 at 12.03 to 25.20. down just 1.05 from 26.25 – EXTREMELY bearish as indicated by the high of 31.06 – highest since 11/28/11!!! The average of the past 12 months is 13.83, with a low of 10.32!

U.S. bond market was extremely strong early yesterday before the opening creating more0 new 12 month low yields (2.09% +7/16; 30’s 2.87% +15/16; and long TIP 0.83% +1-1/16!!!), but by the opening these had faded leading to modest losses: 10 yr 2.16% -3/16; 30 yr 2.94% -3/8; and the long TIP 0.87% -3/16 (from a new record low(?) of 0.86? Weaker again overnight: 2.19% -1/4; 30’s 2.96% -1/2; and long TIP 0.88% -3/16.  

Libor update: 0.228% 3 mos.; 0.321% 6 mos., both at/near new record lows! The Fed Funds rate has averaged 0.09% and is now 0.08-0.10%. T-Bills range from 0.02%, one-month, to just 0.10% one year!!! Foreign bond yields reversed their moves yesterday late in the session, again lead by the PIIGS but in the other direction!?! (Benchmark is 10yr): Germany 0.86%! +5; UK 2.17% +8; France 1.29%! +3; Italy 2.50% -8; Spain 2.16% -5; Portugal 3.32% -13!; Greece 7.79% -85!!! from 8.69% +108!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.47% -1.

Gold closed slightly lower a day after gapping up to its highest since 9/11/13 ($1247), closing at $1241.20 -$2.90. Still only two prints below $1200 since 12/31/13 – back to back and rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! SUP/RES is the 40 day at $1239, then RES at the 50 day $1252, and the 200 day at $1284. 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 sdllightly lower at $1238.80 -$2.40 in another very narrow range. Silver holding that ’17’ handle after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!

Crude closed slightly higher at $82.70 +$1.01…but look at the range: high $84.83, low $79.78…lowest since 6/27/13!!! There have now been 28!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($91.37), then the 50 day ($92.46), and lastly the 200 day (98.85). The range is now $79.78-$112.24 since 3/1/12. Overnight little changed and tight at $83.72 +$1.02.

Global equity markets strong, ex-Japan/Korea: UK +1% vs -0.7% vs -2.8%!!! France +2.1%!!! vs -1.1% vs -3.6%!!! Germany +2%!!! vs -0.4% vs -2.9%!!! Japan -1.4% vs -2.2%!!! vs -2.4%!!!; Hang Seng +0.5% vs -1%! vs -1! Korea -1%! vs -0.4% vs -0.7%; India +0.4% vs -1.3% vs closed vs -0.1%. U.S. equity futures STRONG!!!,gapping up on the open – but remember this is options expiry!: Dow +169 (range 169 +24 gap!!!); SPX +23 (27 +1); NDQ +54 (55 +6)… looks like another ‘E’ ticket ride today!

 

Some random thoughts:

When TB was working in Nevada 34 years ago, he attended a meeting of mineralogists. They said that in the entire history of the world, the total amount of gold extracted would fit inside a 150×150 foot cube. Think about that…as TB did when he was in Istanbul. His guide looked at him incredulouslyi (obviously more has been extracted since then but certainly isn’t being horded by governments…especially the UK which is why they always say, “God save the queen!” In the U.S. we use another phrase: ”in God we trust” which of course replaced ‘payable to the bearer upon demand in gold/silver’.

Taking it a step further, that 150’ cube is 3,375,000 square feet, and if you crammed people (6’ tall) in it, it would hold 187,500 people…or more accurately, ‘bodies’, as no one could breath. That is about double the number of people in the largest football stadiums, right?

This brings us to the Gold ETF’s. Believe it or not there are now 39 funds that are invested in gold/silver…the largest being the Spyder’s (GLD) with a market cap of $30.33 billion! Taking the price per once at yesterday’s close ($1,233), that is 2,459,854 ounces of gold. At the peak that value was equal to nine years of production!!! See why it has plunged? That is not to say these funds don’t have gold to back them up but it does explain why they have fallen 34% since peaking on 8/19/11! All that glitters is not —-…even if it is!

Just one more thing to think about over the weekend…its up to you to decide how much gold has been mined since 1980…but bet it would still fit in that 150’ cube.

Have a great weekend,

TB

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10/16/14…a tale of three worlds…plus stocks: in their own world!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Never go to a doctor whose office plants have died”                          – Erma Bombeck

Bloomberg Quote of the Day: “Success is liking yourself, liking what you do, and liking how you do it.” – Maya Angelou

Due to lateness…no headlines today. TB
Wednesday’s (and prior two weeks) Market Summary:

…what’s a bear to do? Go away for two weeks, enjoy a cruise and then spend four days in Istanbul…or is it Constantinople…dunno…
TB didn’t miss a single thing…same old, same old…market rallied (occasionally) on light to medium volume, then plunges on big volume (Wednesday was troubled with Dow Transports up slightly (0.2%), but the rest down…hello??? What about the Russell 2000 Small Cap – can’t explain that outlier as it ROSE 1%??? Worst performer, just to confuse even more was Dow Utilities -1.3%, followed closely by The Dow itself, -1.1%! S&P 500 was off 0.8%, then the two Nasdaqs, -0.3% and 0.6% respectively! Oh, almost forgot, NYSE Financials plunged 1.7%…and look at the financial components: NYSE Brokers -1.5%; KBW Banks -3.3%@!!! (didn’t TB warn you of this?); and Nasdaq Banks -2.1%!!! So, you say…just one day…ah, but sadly NO!…and TB hasn’t heard any fat lady singing yet…even in Venezia! – but that’s another story.

Before we look at the skeleton, here are the ytd price changes (PRICE ONLY!!!): Dow -2.6%! Dow Transports +7.3% (less than half of 9/30 gains – +8.3% adding dividends)! Dow Utilities…now the unchallengeable leader for the year +13.9%!!! (adding in dividends, UP 17.1%!!!); Russell 2000 despite yesterday’s nice move, DOWN 6.9% for 2014!!! What about the other leader you say? NDQ 100 is now up just 6.4% this year but still up 18.2% for the last 12 months. Lastly, the ‘health’ index…NYSE Financials…recall that they peaked in June 2007 well before the crisis began…a warning shot across the bow! For the 12 months they are now up just 6% since 9/30/13 – and to show the damage of the past two weeks, now DOWN 1% for the year! That includes those niggardly dividends that TB loathes…the only reason to buy ANY bank stock!

Total NYSE Volume exploded to 6.06B shares…and that isn’t the worst part: average volume for the first 11 days of October ran 3.5B, capped off by yesterday’s 6.06B shares, or about 500M more than the recent average. To show that the ‘drought’ of trading has ended one needs to look at shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: since 4/30 the average Has run just 687M shares…for October it is 893M shares!!! For comparion purposes, for the prior 12 months it was a historically weak 706M shares…but for the last 11 days 893M shares capped off by yesterday’s HUGE 1.22B shared day – highest since 9/19 and the low was 10/6’s 696M share session. Since April 30th we ‘had’ had just SEVEN sessions of more than 800M shares…for October? NINE…think about that: one day missed by just 10M shares. Crazy! Crazy bearish! Yesterday at the bell, volume was 992M SHARES…steady selling all day! The 12-month high is 2.06B shares on 9/20/13!

A/D’s were mixed (?) with NYSE slightly negative and Nasdaq slightly positive (sic): NYSE: -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq +1.2x vs +1.6x vs-2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth was similar: NYSE -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs slumped to 40 on 10/1 from a weak 90 on 9/30 and haven’t been above 77 since ending at 49 yesterday – their range for the year is 39-580!!! New Lows surged to 1043!!! From 639 – lowest for October is 176 – 2014 range is now 24-1043!!! S&P VIX has gone from ‘put’ protection being cheap on 9/18 at 12.03 to 26.25 yesterday – EXTREMELY bearish as indicated by the high of 31.06 – highest since 11/28/11!!! The average of the past 12 months is 13.83, with a low of 10.32! ose again to a bearish 16.74 +.46 – highest since 8/1! The range was 16.08–17.56!!!

U.S. bond market continued its rally to new 12 month low yields: 10 yr 2.14%; 30 yr 2.92%! The long TIP closed at 0.86% (isn’t that a new record low???) Very strong overnight to more new 12-month lows: 2.09% +7/16; 30’s 2.87% +15/16; and long TIP 0.83% +1-1/16!!!
Libor update: 0.229% 3 mos.; 0.320% 6 mos., both at new record lows! The Fed Funds rate has averaged 0.09% and is now 0.08-0.10%. T-Bills range from 0.02%, one-month, to just 0.10% one year!!! Foreign bond yields continued their rally to new lows yesterday – but PIIGS were weak and weaker overnight (Benchmark is 10yr): Germany 0.80%! +4; UK 2.05%!!!! +10; France 1.24%! +12; Italy 2.58% +16! Spain 2.18% +8! Portugal 3.54% +28!!!; Greece 8.69% +108!!! – low was 5.42%; Crisis high: 12.57%. Japan: 0.48% –.

Gold closed slightly higher $1244.10 +$10.50, gapping up to its highest since 9/11/13 in quiet trading with a session high of $1247 after gapping up by $8 on the open from $1235.90 to 1243.70, its session low. Only two prints below $1200 since 12/31/13 – back to back and rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! SUP/RES is the 40 day at $1240, then RES at the 50 day $1253, and the 200 day at $1284. 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 lower at $1236.70 -$7.40 in a very narrow range. Silver back with a ’17’ handle after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!

Crude closed little changed at $81.78 -.06 but only after putting in a low of $80.01, lowest since 6/27/13! There have been 27!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($91.70), then the 50 day ($92.730), and lastly the 200 day (98.93). The range is now $80.01-$112.24 since 3/1/12. Overnight it is WEAK with a new low of $70.78, not 28 handles!!!! Lowest since 6/27/13! Currently it is $81.17 -.63

European equity markets weak, led by Japan: UK -0.7% vs -2.8%!!! France -1.1% vs -3.6%!!! Germany -0.4% vs -2.9%!!! Japan -2.2%!!! vs -2.4%!!!; Hang Seng -1%! vs -1! Korea -0.4% vs -0.7%; India -1.3% vs closed vs -0.1%. U.S. equity futures slammed again: Dow -97 (range 108!!!); SPX -3.70 (42!); NDQ -22 (80!!!). Market as of 11am EDT: Dow -47 (low was -158!); SPX -13 (low -39); Transports UP 74??? (-95!!!); Composite -14.50 (-82); NDQ 100 -35 (-46); Russell 2000 UP 4.64 (-14!); Dow Utilities -4.20 (-10).

 

Some random thoughts:

Thoughts from the trip to Venice, Croatia, Montenegro, Albania, Greece, and Turkey. We had great weather and met some wonderful people…on the cruise and in the ports. We flew from Athens to Istanbul…light years away.

Venice was beautiful as always and unlike the hot, humid summer months was a nice 70 with not so many tourists. We skipped Harry’s Bar having our Bellini’s from the bottle we took back to the ship. George Clooney asked TB where to have his wedding and the obvious answer to TB was at the Cipriani…and that is where he went…still looking for that invitation…must have been an oversight, right? Only disappointment to TB was his favorite ‘wine bar’, the Do Mori, which dates back to 1620. A small featureless place that was suggested by Berkeley wine merchant Kermit Lynch years ago…and the best TB has ever found…wonderful, innovative antipasti, and reasonable wine drunk with the locals who come in for their shot of Prosecco before going back to work in the produce and fish markets. Alas, no more…some jerk…sent it to Zagat and when we got to the place not only was it wall to wall Americans, but about 30 were standing outside. PASS!!!! Never, never, tell Zagat about any place you like…like Gordon’s Wine Bar in London! As TB likes to say: you can always return but you can never go back.

Our ship was wonderful…Windstar’s Star Pride – just 198 passengers and 130 crew to serve your every need. From the first day they knew your name and at the end of nine days you knew them well…about their lives and families. Having served on a destroyer (USS INGERSOLL DD-652), in Viet Nam with 300 of his closest friends, and then taking a Greek island cruise on an older ship with about 300 passengers, TB has shunned these 2,000-4,000 passenger ships. Crystal Concordia proved TB’s point. The service and food was great…no kids…they gravitate with their parents and the ‘lively set’ to the BIG ships…so be it…we were in port early and had more time their…Hvar, Dubrovic, Kotor, Butrint, Zakynthos, Delphi (Glalazidhi), and Hydra (personal favorite), before getting to Athens. Two of our oldest (relationship, not years), friends joined us on the cruise and we all had a great time.

A spectacular treat was passing through the Corinth Canal which cuts off Pelopennesius from the rest of Greece. This six mile canal is the most spectacular in the world. Whereas the Suez is wide and long, and Panama is narrow and with locks, this one can no longer accommodate wide ships (more than 67 feet which was our size). It takes about an hour and a half to pass through (literally), towed by a tug with less than six feet on each side and high cliffs…thankfully no boulder throwing kids were up there! Highly recommended! This was followed up by a feast of an entire suckling pig, lobster, crab, paella with shrimp and mussels, lamb chops, steak and much more…they couldn’t give away the chicken with all those choices…served al fresco after completing the canal.

Flying to Istanbul was to an entirely new world…our hotel was right across from Hagia Sophia, and near the Blue Mosque, the Hippodrome, and Topkapi Palace. Our guide, provided by Sea Song was Berna, a wonderful woman who had lived in New York for 21 years…we didn’t hold that against her. She was charming and besides the listed sites above took us to the Summer Palace, Sulliman Mosque, and a Greek Orhtodox church that was chock full of icons. Her explanations were interesting and enlightening. We also had dinner with friends one night who happened to be there too! We did in four days what would have taken at least a week on our own! Sea Song was the tour agency…and also highly recommended.

America is not well regarded these days in Turkey…but not the American people. There is much mistrust of our government (and the European nations too), as to our motives…can you blame them after what we did to Iraq? Obama is better liked than Dubya, and our Congress is a joke to them too. Berna said that beggars were totally eliminated in Turkey until the refugees flocked in from Syria…and a lot of Kurds. It is sad and their government’s inability to make a decision on what to do with the ‘allies’ isn’t helping…can’t say as we can blame them though….it is a fine line and one that could have serious repercussions for the country…and just how much will WE support them?

A great trip but it is great to be back to where we can read the signs again. Have to sort through 750 pictures…many redundant of course. If one picture is worth a thousand words, what is…oh, nevermind!

Have a great day!

TB

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10/2/14…comments on Wednesday’s markets

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Man is the only animal that blushes. Or need to.” – Mark Twain

Bloomberg Quote of the Day: “The best way to predict the future is to create it.” – Peter Drucker

Wednesday’s Market Summary:

…ay carumba! Dow -238, 1.5%; S&P -26, 1.3%, Dow Transports -2.5%!!! (all 20 declining!), NDQ 100 -1.6% (same as the Comp), 99:4 declining (there are 103 stocks in the 100 fyi),Russell 2000 -1.5%.Was there any bright side? Dow Utilities +0.4% – despite recent weakness still up 16.1% (total return, not just price), and now ahead of Dow Transports +15.3%. Next comes NDQ 100 +12% (Composite now up 6.9%), while S&P 500 is now up just 6.9%,Dow 30 +3.1%! The Russell 2000 small cap is now off 5.8% ytd. Remember these numbers include reinvested dividends! A/D’s and Breadth were big negatives (while any positives have been small). Recently Nasdaq stocks are being hit harder than NYSE! New 52 week highs slipped to 40 – just one above their low for the year! New lows rose to 540!!! Taking out the old high of 382! Ouch! Lastly, VIX rose again to a bearish 16.74! All this on very high volume: 4.16B!

Total NYSE Volume exploded to 4.16B shares from an average at 3.07B vs 2.91B vs 3.27B vs 3.4B. Real NYSE Volume rose only dipped to 865M from 940M (omitted yesterday) vs 654M vs 630M vs 736. There have now been just six 700M+ days in 32 sessions! There have now been just seven sessions above 800M since 4/28! The 12-month average is a historically weak 697M shares. Since 4/30 the average volume is just 668M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were highly negative and sounding a warning: NYSE: -3x! vs -1.4x vs +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq -3.5x! vs -1.3x vs +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was even worse: NYSE -5.5x!!! vs -2.6x vs +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq -6x!!! vs -1.1x vs +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs took a header to 40 – just one off their low vs 71 vs 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows charged ahead to a new high of 540!!! Eclipsing the prior 329 vs 322! vs 250 vs 382!!! from 289 vs 329! - recent range is 24-382!!! S&P VIX rose again to a bearish 16.74 +.46 – highest since 8/1! The range was 16.08–17.56!!! Only two ’12 prints in the last 23 sessions.

NOTE: all overnight numbers are very early (4am EDT)

U.S. bond market closed very strong adding to Wednesday’s gains: 10 yr 2.38% +15/16; 30 yr 3.08% +2 pts! Almost to 8/28 low of 3.075%!!! the long TIP closed at 0.98%% (record low was 0.87%!) +2-9/16!!! Only slightly weaker overnight: 2.41% -3/16; 30’s 3.11% -7/16; and long TIP 1.00% -1/2.  

Libor update: 0.235% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.235% and 0.330% 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 0.08% one year!!! Foreign bond yields rallied further late Wednesday, only slightly higher led by PIIGS! (Benchmark is 10yr): Germany 0.91%! +1; UK 2.37%! +1; France 1.25%! +1; Italy 2.29% +1; Spain 2.09% +3; Portugal 3.05% –; Greece 6.41% +7 – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% -1. Bonds remain ‘risky business’!

Gold closed slightly higher in an inside session at $1215.50 +$5.00. Wednesday’s low was $1204.30 – lowest since 1/2/14. 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!!! RES is the 40 day at $1262, then the 50 day at $1269, and the 200 day at $1283 – 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 little changed at $1215.20 -.30. Silver remains with a ’17’ handle. Has a low of $17.08 – lowest since 2/26/2010!!!

Crude had a lower high and lower low (just 4 cents above the recent) closing at $90.73 -.45, 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 ($94.22), then further Res at the 50 day ($95.41), and lastly the 200 day (99.53) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is WEAK: new low of $89.66 -$1.07!!! Lowest since 4/24/13!

European equity markets weak, led by Japan: UK -0.5% vs -0.3% vs -0.5% vs +0.2% vs -0.1%; France -0.5% vs +1.1% vs -1.2% vs +0.9% vs +0.3%; Germany -0.5% vs +0.4% vs -1.1% vs +0.1% vs +0.5%; Japan -2.6% vs -0.8% vs +0.5% vs -0.9% vs +1.3%; Hang Seng closed for a 2nd day vs -1.3%! vs -1.9%!!! vs -0.4%; Korea -0.8% vs -0.3% vs -0.3% vs -0.1% vs -0.1%; India -0.1% vs +0.1% vs -0.1% vs +0.6% vs -1%. U.S. equity futures slightly weaker – remember these are early numbers: Dow -4 (range 26); SPX — (4); NDQ -2.75 (11).

 

Some random thoughts:

Just wanted to update markets today before leaving due to shellacking stocks took yesterday; now off to Italy, Dalmatian coast, Athens, and Istanbul. Next official commentary 10/16.

TB

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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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