Bloomberg Top Stories:
*Euro Leaders Agree on Budget Rigor With Next Step Left to Central Bankers – BIG YAWN!
*Stocks Rise With U.S. Futures as Euro Gains After Summit; Italy Bonds Drop
*EU Leaders Drop Demands for Investors to Take Writeoffs in Future Bailouts – gimme a break!
*Prime Money Funds in U.S. Cut Holdings of French Bank Debt 68% in November – no problemo
*U.S. Company Borrowing Reached Slowest Since ’10 on Europe – loaded with cash!
*Toyota Cuts Annual Profit Forecast by 54% After Thai Floods Disrupt Output – but the Volt???
*Texas Instruments Drops After Forecasting Sales Below Analyst’s Estimates – hello!!!
*Las Vegas Condo Fraud Exposed by ‘Old Ladies’ Angry With Rigged Elections
*Putin Protests Lift Default Swaps as VEB Cancels Bond Sales
*Disasters From Tsunami to Floods Imperil Supply-Chain Disruption Insurance
*Buddhist Packing James Bond’s Pistol Shows Warm Embrace of Guns in America – a Buddhist!
*Cameron Wishes Euro Nations Well as U.K. Negotiates Isolation in Brussels – Take that!
*Romney to Spend More Time Courting Voters in Bid to Blunt Gingrich’s Surge
Volume rose yet again to an above average 4.25B shares from 4.1B shares, in a second hodge-podge session producing mixed results. Meanwhile, NYSE stocks executed on the Big Board DIPPED to a still below average 930M, from 968, and while still 10% below average,still only the second 900M share day in the last six sessions! Also,18 of the last 20 sessions have been less than 1B! Once again TB’s adage proves itself: up on low volume down on bigger volume! Advance/Declines were VERY weak after being mixed for three sessions: -6.5:1 vs +1.1:1 vs +1.1:1 vs +3.5:1 vs +1.4:1 vs -1.5:1 vs +30:1 on NYSE and also -6.5:1 vs -1.2:1 vs -1.3:1 vs +2.2:1 vs +1.5:1 vs -1.6:1 vs +4.5:1 on Nasdaq!!! Breadth was even worse: -32x!!! vs +1.8x vs -1.1x vs +5x vs +1.6x vs +1.2x vs +30x on NYSE and -6.6x vs -1.2x vs -1.5x vs +3x vs -1.1x vs +1.3x vs +10x on Nasdaq. New 52 week highs slipped to 122 from 135 while new lows rose to 100 from 70….climbing even more sharply The ratio fell to just 1.2x positive! VIX rose for a FOURTH session, closing at 30.59 +1.92, never even closing the 26.46-27.01 gap up from 10/27 and 10/31. This was highest close since 11-29! Meanwhile the 12 mo. ave. lies at 23.76 – fear still prevails!
Here are the results of the past seven sessions negating the rally: Dow -1.6% vs +0.4% vs +0.5% vs +0.6% vs flat vs -0.2% vs +4.2%!!!; Transports -2.5% vs +0.1% vs -0.8% vs +1.5% vs +0.8% vs -0.8% vs +4.8%; S&P 500 +1% vs flat vs -0.2% vs +4.3%; Nasdaq Composite -2.1% vs flat vs +0.1% vs +1.1% vs flat vs +0.2% vs +3.8%; Nasdaq 100 -2% vs flat vs -0.2% vs +1.1% vs -0.3% vs +0.6% vs +3.8%; Russell 2000 +3.1%!!! vs -0.1% vs flat vs+1.6% vs +0.6% vs +0.9% vs +5.9%!!!; NYSE Financials -3.5%!!! vs +1% vs -0.1% vs +1.8% vs +1.3% vs -0.9% vs +5.9%. Leaders: BAC -5.1% vs +1.9% vs -0.2% vs +2.7% vs +1.7% vs +7.3%!!! C -7%!!! Vs +0.3% vs -0.3% vs +5.9%. Guess those 4,500 layoffs DID mean something!
European equity markets strong, Asia weak: FTSE +0.7% vs +0.3% vs -0.4% vs +0.2% vs +0.7% vs +1.5% vs +0.5% vs +2.9%; CAC 40 +1.8% vs -0.4% vs -0.5% vs -0.5% vs +1.4% vs +1.9% vs flat vs +3.5%; DAX +1.6% vs flat vs -0.9% vs -0.8% vs +0.8% vs +1.7% vs -0.5% vs +4.2%!; Nikkei -1.5% vs -0.7% vs +1.7% vs -1.4% vs +0.6% vs +0.5% vs +1.9% vs -0.5% vs +2.3% vs +1.6%; Hang Seng -2.7%!!! vs -0.7% vs +1.6% vs -1.2% vs +0.7% vs +0.2% vs +5.6%!!! vs -1.5% vs +1.2% vs +2% vs -1.4% vs -2.1%!!!; Korean KOSPI -2% vs -0.4% vs +0.9% vs -1% vs +0.4% vs flat vs +3.7% vs -0.5% vs +2.3% vs +2.2% vs -1% vs -2.4%!!!; Indian Sensex -1.7% vs -2.3%!!! vs +0.4% vs closed vs -0.3% vs +2.2% vs +2.2% vs +0.7% vs -1% vs +3%, up only 7 times in the last 21 sessions! U.S. stock futures rallying and ignoring corporate earnings reports! DOW +89; SPX +11; NDQ +15. Bonds weaker as they are every morning lately, then rally back on stock weakness with 10’s AT 2% and 30’s still above 3%. 10 yr 2.00% -1/4. RECORD low 9/23 of 1.6855%; 30 yr 3.02% -1/2; Long TIP 0.84% -9/16. 0.57% at high three weeks ago. The 5 yr TIP yields MINUS 0.91%! 10 yr -0.04%. 3 mo. Libor 0.54%, and 0.76% 6 mo. – 3 mo. above 0.50% and six month above 0.75%…stable but yearend approaches! Bills -0.00% from one month out to six. 6 months 0.04%.
Gold tanked again Thursday but remains above $1700. It closed at $1713.40 -$31.40 but is now $1722.200 +$8.80. Once again correlating to stocks??? The record high is $1923.70, a buying climax on 9/6. RES is 1725, the 40 day and SUP $17611, the 50 day m/a! Major Res at $1800-1806, the November highs. Crude really TANKED Thursday crashing thru $100 support and closing $98.34 -$2.15, and is now $98.47 +.13. Support at the 200 day (96), peaked. Major support is the 40/50 day m/a at $95.42-92.71, AND still moving up.
…stocks tanked and bonds rallied after stocks as the entire selloff was blamed on the central banks not going to buy up mortgage debt as speculated…of course this too is speculaton. About 15 minutes prior to the close stocks bottomed with the Dow at 11967 or -229, then short-covering (what else would it be?) attempting to get it back above 12k but failed leaving it at 11997. But as the news turns, today is a new day…full of hope, ah yes! Please Lucy, jerk that football away one more time!
Meanwhile the picture for corporate earnings continues to deteriorate…wait…doesn’t that lower the ‘e’ in p/e? Who cares, stocks are dirt cheap. Volatility? What’s that you say you perma-bear?
Note that while volume increased BIG BOARD volume DECLINED and remains well below average…more high frequency trades…when will they ever learn?…it is so funny to see the guys on CNBC trying to explain rallies and selloffs…of course the selloffs are just buying opportunities, right? Right???
Much is being made of Jon Corzine being subpoenaed and not taking the 5th. True, but his former brethren didn’t ask him any tough questions…no sir, he just sat there looking contrite as if the CEO isn’t where the buck stops…but then why should he think otherwise? Afterall, look at Mozillo and Pandit among others…
. . . – - - . . . note that the same old SOS applies…only more so!
Thomas Jefferson said that an informed electorate is the key to a democracy. He was right!
TB is not slipping, he decided to use Jefferson’s comment again…after a discussion with a friend and reader. He first called Obama a ‘pinko’ and then ‘the most divisive president in history.’ TB is not making fun of him as he is saying what a large number of Americans think. Where do we get these ideas.
But the worst part was the theme: ” anyone but Obama.” Do we really believe that things would be any different under McCain/Palin? The Tea Party would still have acted the same. We would still have gridlock in Congress, and the people would still be the losers. McCain is a maverick and would not support their cause either.
No, the most divisive president in history was Abraham Lincoln! To TB’s knowledge Obama has not gotten us into a civil war…one that, by the way, proved Lincoln right but at a cost of more lives than any war since. So let’s not bestow that ‘honor’ on Obama. Also, let’s grow up and stop blaming him for the budget deficit (all GOP candidates), or cutting defense spending (Gingrich). This is sheer pandering…pandering to the most extreme right who will possibly dictate who the eventual GOP presidential candidate is.
Karl Rove, the man who brought us George W. Bush, is now bashing Newt, and saying the RNC should disavow the Trump debates. On the other hand, he is making up more lies about Elizabeth Warren…now even blaming her for TARP – when she was opposed to bailouts! This comes at a time when the Senate rejected a qualified candidate to head the new Consumer Financial Protection Bureau, just as they did Warren but without the personal attacks. This time though, the reason is said to be he is qualified but we don’t need more consumer protection…especially from Wall Street as the SEC and other agencies are doing that. Wrong! They aren’t and for precisely the reasons that this bureau was being created: Congress controls them! …and Congress is bought and paid for by Wall Street. One only had to listen to the diatribe of Mitch McConnell to see the true motivation for both rejections.
Newt has already shown his derision of the electoral process by declaring himself the GOP candidate (Putin pay attention), sucking up to the conservative media, and instead of answering questions from what he perceives to be the liberal media, spent the time chastising them for asking the wrong questions. If he is elected president, don’t expect a spirit of cooperation.
TB stopped being a conservative after listening to Limbaugh and others, who since have become even more inflammatory in their remarks…it is good for ratings…and money! The right hates Rachel Maddow, who uses sarcasm instead to make her points…no screaming or ranting. Guess they prefer hearing people called terms like ‘pinhead’ or worse.
NPR is hated by the GOP…yet it is the only honest (fair and balanced) reporting in this country. The other day they had on a conservative blogger (powerline.com), who showed just how off point they can be (by the way whatever happened to radical and reactionary?). He said the left controls journalism and after bringing down Nixon, everyone wanted to become an investigative reporter “so they could bring down a Republican president” – huh? Guess he missed the Viet Nam protests when LBJ was running the country. The exception he said is the Wall Street Journal who employs liberal reporters but the editorial page is conservative.
Ahem, let’ look at history. Remember Michael Milken? While the investigative reporters did an excellent job of calling him what he was, the editorial page, under the control of Jude Wanniski not only defended him but made him an idol. While Milken was in prison in Pleasanton, Cal., TB met Wanniski when he met with TB’s company. He talked about the economy etc. then said: “I have to go now as I am going to have lunch with ‘Mike.” See, being a convicted felon did not stop him from defending him…another vast left wing conspiracy?
Once again, TB is not anti-capitalism, or anti-Wall Street, but he is against crony capitalism which is what we have and what allows the CEO’s of the biggest companies to earn hundreds of millions while the shareholders get their…well…lumps of coal or worse.
We haven’t had true capitalism in this country for at least a decade and the roots were planted three decades ago…not coincidentally when the average worker’s real compensation began to decline. Remember when CEO’s earned an average 10x the average worker? For most companies that formula isn’t too far off…and those companies do more for their shareholders!
Albert Poujols just signed a ten year $250 million contract, second only to A-Rods, with the Los Angeles Angels. At least he earned it but it is sad that money drives everything these days. Witness the departure of most of the Boston Red Sox after beating the Yankees in the World Series. Poujols talked glowingly of his love for the Cards…but guess the lure of money was greater…perhaps he now thinks like CEO’s: what’s in it for me? Is A-Rod a better player since getting his record contract? Will Albert be even better? Stay tuned. How much is enough?
The difference of course is it is the fans who will pay to see Poujols’ play…not shareholders. In this case there are few shareholders and this is just one investment for them. While TB loathed Steinbrenner, he knew how to play the game by not just owning the team but the media.
In closing, TB does not want you to think his way, and is not trying to convince you, merely try to make you think for yourself. There are two sides to every story…it is up to you to decide.
Have a great weekend…anything that gets us away from the market has to be better than this!