Quote of the Day from the Friars Club Encyclopedia of Jokes: “In all matters of opinion, our adversaries are insane.” – Mark Twain…perhaps you need to see a shrink?
Bloomberg Quotes of the Day: “The inevitable has always found me ready and hopeful.” – Amelia Barr…yeah but what if it doesn’t come???
Bloomberg Top Stories:
*Draghi Says Inflation to Quicken Over Two Years as Low ECB Rates Affirmed – !?!
*First-Time Jobless Claims in U.S. Decrease to Lowest Level in Three Months – you don’t think weather could be affecting this? Naw…
*U.S. Stock Futures Rise as Decline in Jobless Claims Shows Labor Strength – hah!
*Banks Enriched by Junk Fees Resist Regulator Push for U.S. Loan Standards – !!!
*MetLife Targets Apartments From New York to L.A. as Lending Increases 19%
*Round-the-Clock Ukraine Crisis Stokes Trading Surge in Russian Stock ETF’s – Da!
*Sinclair Broadcast-Station Control Model Targeted for Breakup for Breakup by U.S.
*Argentina Oil Bonanza Benefitting Too Few Led by Nation’s Political Friends
*McDonald’s 401(k) Ranks Among Generous Plans While Wynn Resorts Is Stingy
*Crimea Readies Secession vote as EU Leaders Spar Over Sanctions on Russia
*Putin Is Soviet Man Still Mad Over Union Unresolved” Bloomberg – no kidding!
*Alzheimer’s Disease Estimated to Be Third-Biggest Killer In U.S. – what is?
*Families Who Reject Vaccination Are Risking Lives of Their Neighbors – GOP???
Payrolls tomorrow and data hasn’t been very positive this week. ADP indicates a slightly below number tomorrow…but regardless…subject to substantial revision!
Wednesday’s Market Summary:
Locomotion? There is none! …first, stocks down a bunch, next day up – and more so, then a mixed day yesterday…very strange. Still think we are grossly underestimating the Russian situation while Syria worsens. Just what we need, another war! Bonds mixed after being taken to the cleaners on Tuesday. Dow Utilities were the goat yesterday at -0.7% while NYSE Financials gained the most: +0.4%….but look inside NYSE Brokeres +0.1%, KBW Banks +0.7%, Nasdaq Banks -0.1%…totally mixed bag. BofA most active as usual and UP 2.8% closing at 17.25…a 12 month high…which also means highest since 2007! For the last two weeks it has looked like it was going to break below $16 and on Monday closed BELOW the 40 day m/a?
NYSE Volume was still below average at 3.35B shares but close while shares traded on the floor hit the hex: 666M shares, well below the 12 month average of 722M shares and the average since 12/20 the 12 month high: 696M shares. Advance/Declines were NEUTRAL!!! Really with a 1.04:1 negative bent on both NYSE and Nasdaq stocks. New 52 Week Highs dropped from 609 to a still healthy 410 while new lows dipped from a weak 23 to 19 just 1 off the low. Volatility (S&P VIX), continued its decline to 13.89 -.21. On Monday it gapped up from 14.79-15.38 closing at a bad print of 16.01 +2.01 – threat neutralized…until payrolls at least!
Bonds: mixed close yesterday with 10’s down 1/16, 30 yr flat, and long TIP +5/16. Overnight weak: 10 yr 2.74% -1/4; 30 yr 3.67% -7/16; TIP 1.35 -1/2.
Recent ranges: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP recent high was 1.64% The (record?) low of 0.36% was set on 4/5. Libor update: 0.235% 3 mos, 0.332% 6 mos. – record lows set recently: 0.329% 6 mos! 3 mos 0.233%!!!). NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.07-0.09%!!! Foreign bond mixed for a second day while Greece yields continue to plunge!!! Germany 1.66% +6; UK 2.77% +5 – recent high 3.03%! France 2.23% +6; Italy 3.41% +5; Spain 3.37% +1; Portugal 4.66% -3 Greece 6.52% -17??? – yet another new low taking out 6.69% and a day earlier 6.83%! Recent range now 6.52% to 12.57%. Japan: 0.61% +1.
Gold closed slightly higher an remains fairly strong following Monday’s big rally” $1340.30 +$2.40 on a second straight ‘inside’ session. It has closed above the psychological $1300 every day since 2/12! It has also been above the 200 day since 2/14! That is major support at $1306. Monday’s high was $1355.00 and close of $1350.30 were highest since 9/23/13 before the selloff began!!! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Recent high is $1375.40 back on 9/19. Psych levels: $1200 and $1300 support, with support at the 200 day, $1303! Critical support at the 40 day ($1279) and the 50 day ($1266). Currently $1336.00 -$4.30.
Crude closed lower but at least saved par. The low was $100.85 – dangerously close to the 200 day (99.99): 101.45 -$1.88 saved only by a very late rally and settling mark. It has held ‘par’ since 2/12 which was the first time since 12/27/13! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. Distant support is at the 40 day m/a ($98.28), and the 50 day m/a ($98.18), both starting to climb! FIRST SUPPORT at the 200 day ($99.99). The recent range is $85.61-$112.24 since March 1, 2012. It is currently $100.71 -.74 with a session low of $100.56!!!
Overnight global equity markets higher: UK +0.3% vs -0.6% vs +1% vs -1.6%! France +0.9% vs -0.1% vs +1% vs-2.3%!!! Germany +0.2% vs -0.2% vs +1% vs-2.9%!!!; Japan +1.6% vs +1.2% vs +0.5% vs -1.3%!Hang Seng +0.6% vs -0.3% vs +0.7% vs -1.5%!!! Korea +0.2% vs +0.9% vs -0.5% vs 0.8%; India +1.1% vs +0.3% vs +1.3% vs -0.8%. U.S. equity futures higher in another narrow range session: Dow +23 (range 31); S&P +2.60 (6); Nasdaq +4 (5) – talk about dead in the water!
Some random thoughts:
Leaving for Cincy this morning and saw this story on AOL…also did you know that the president of the NY Fed (Bill Dudley) makes more – much more – than the Fed chair and has a bigger office and more perks? Volcker took a big cut in pay to assume the title!
NEW YORK/ABU DHABI, March 4 (Reuters) – Ben Bernanke earned more in 40 minutes on Tuesday than he made all of last year as head of the U.S. Federal Reserve.
Bernanke was paid at least $250,000 for his first public speaking engagement, in Abu Dhabi, since stepping down in January, according to sources familiar with the matter. That compares to his 2013 paycheck of $199,700, and the appearance was only the first of three around the world this week.
Bernanke’s public post-Fed debut was a departure from the private audiences that his predecessor Alan Greenspan addressed shortly after he handed over the central bank’s reins in 2006. In his remarks, Bernanke recounted the Fed’s response to the 2007-2009 financial crisis, an issue he is exploring for a book he plans to shop around to publishers.
In hitting the speaking circuit, Bernanke is following a well-trod path of top public servants cashing in on the demand for the insights they can offer. In the case of a one-time Fed chairman, those insights could potentially be market-moving.
And given that his successor, Janet Yellen, has vowed to stay the course he set, investors could view him as a weather vane for the world’s most powerful central bank.
“He will obviously be enjoying the fruits of the free market,” said Jan Baran, a partner and head of the election law and government ethics group at Washington law firm Wiley Rein LLP. “He will personally experience supply and demand.”
Lawyers and agents say Bernanke, 60, should be able to command around $250,000 per speech for a while to come.
The paycheck “sounds reasonable to me,” said one speaking-circuit agent who did not want to be named. Bernanke could have a “very long shelf life,” he added.
While the fee launches him into the upper echelons of sought-after speakers, it leaves him well short of former President Bill Clinton – the gold standard of Americans turning charisma into cash – who has, by some estimates, earned two or even three times that much for some appearances in recent years.
“He’s free to offer his own views either historical or forward-looking,” said Baran, when asked about the ethics of Bernanke cashing in on his eight years as Fed chairman. “Nothing sounds illegal or unethical and in fact it sounds fairly routine.”
As Bernanke joked on Tuesday: “I can say whatever I want.”
Not always, as his predecessor learned.
Greenspan drew criticism for giving high-paying investors a potential leg up on their competitors with closed-door remarks about interest rates shortly after he left office, and for comments in March 2007 on the probability of a U.S. recession that roiled financial markets even as Bernanke was reassuring investors about the outlook.
At the conference sponsored by the National Bank of Abu Dhabi, attendees paid $2,000 each to listen to Bernanke and other speakers, including former U.S. Treasury Secretary Lawrence Summers. Greenspan garnered a similar fee in the United Arab Emirates capital in 2008.
Bernanke, who is now a distinguished fellow at the Washington-based Brookings Institution think-tank, did not discuss monetary policy, and only brushed on prospects for the U.S. economy. Instead, he choose to elaborate on his experience as chairman, acknowledging the Fed could have done more to battle the financial crisis.
Questions from the audience were relatively soft, leading to a discussion about family and baseball. On Wednesday, Bernanke speaks at a Johannesburg forum hosted by the financial firm Discovery Limited, and on Friday he will discuss the U.S. energy boom at a conference hosted by Siemens and IHS in Houston.
Through a Brookings spokeswoman, Bernanke declined to comment on his speaking engagements.
Greenspan took to the speaking circuit one week after departing office in January 2006 with an appearance at a private dinner hosted by Lehman Brothers. That brought in a reported $250,000, while a private telechat with investors in Japan that same day brought in about $120,000.
Greenspan’s take on that first day is equivalent to $433,000 today after adjusting for inflation.
For his planned memoir, Bernanke is being represented by Robert Barnett, the Washington-based attorney who also handled Greenspan, according to a source familiar with the situation. Bernanke plans to meet publishers soon to discuss the book.
While it is unclear how large of a cash advance Bernanke is seeking, Greenspan clinched $8 million.
Former Treasury Secretary Timothy Geithner, who is also publishing a book, made $400,000 from three speeches to financial firms, according to the Financial Times.
After handing the reins to Greenspan in 1987, former chairman Paul Volcker also hit the speaking circuit after learning, he later recounted, that he could make a year’s salary – about $80,000 for the Fed chief at the time – in a speech or two.
By Jonathan Spicer and Mirna Sleiman
…and he deserves every penny of it not like Greenspan who was made an idol because he talked up so no one knew what he was saying. Lastly, having read his book which can be best summarized as: there was no way of seeing this coming (and the Democrats were responsible anyway due to Fannie and Freddie), and I did all I could. This from a man who presided over not just one but three financial crises. Furthermore, he over-reacted to the collapse of Long Term Capital Mis-Management. How on earth did a man who rejects regulation of markets and is a true-believer in Ayn Rand become the Chairman of the Federal Reserve. TB’s ranking of the last three Fed chairmen? Volcker noses out Bernanke and bringing up the rear is Sir Alan of Greenspan.
TB’s bet is Janet Yellen will do a splendid job…send in the women…they couldn’t screw things up any worse than the men have (Michele Bachmann excepted).
Off to Cincinnati with my son for the Bock Fest…guten tag! Back on Monday!