1/25/13…the SEC, Senate hearings, and more

From the Friars Club Encyclopedia of Jokes: “I don’t deserve this, but then, I have arthritis and I don’t deserve that either.” – Jack Benny accepting an award

Bloomberg Quote of the Day: “A day without laughter is a day wasted.” – Charlie Chaplin, who wrote the lyrics for ‘Smile’ …he managed to laugh at what was done to him by the McCarthy Commission, anyone can! TB

Bloomberg Top Stories:

*Banks Will Repay Greater-Than-Forecast $184 Billion of ECB Emergency Loans

*U.K. Economy Shrinks More Than Estimate as Triple-Dip Recession Looms – wait, weren’t we talking about a global recovery yesterday? Meaningless drivel, all of it!

*Euro Rallies After ECB Loans Report as S&P 500 Futures Rise; Yen Weakens

*Fired Deutsche Bank Trader Loses $53 Million Bonus Over Rate-Rigging Claim-banks have no concept of the risk incurred for bigger bonuses so this happens!

*Apple’s Slow-Growth Slowdown Fuels Concern About a Shift to Value Stock-it is impacting the entire tech sector…a la 2000 meltdown which occurred after industrials!

*Big Mac Index Cooks Abe Claims Yen Still too Strong for Japan

*Proctor & Gamble Raises Annual Forecast After Quarterly EPS Tops Estimates

*Goldman Traders See Bullish Signs for Spanish RMBS After Crash – good luck!

*Kansas Bond Market Underperforming Highlights Perils of Cut Fever – too much austerity impairs growth and just digs a deeper hole…attention Tea Party!

*Compounding Pharmacy Creditors File to Freeze Owner’s Assets – as they should!

*Contagion Thesis Derided by Economic Fraternity Proven by Kristin Forbes

*Egypt Opposition Rallying Against Mursi on Second Anniversary of Uprising

*Geithner Departs From U.S. Treasury as Lew Prepares for Senate’s Scrutiny

Yesterday was all about Apple which after badly missing on estimates plunged 12% creating a bifurcated market led by Transports, +1.7%, and followed by Utilities, +0.5%, while the Dow rose just 0.3%. Not so good for the indices which include Apple: S&P 500 FLAT, Nasdaq Comp -0.7%, and NDQ 100 -1.4% (despite a swing to 65 stocks up and 34 down). Apple subtracted a whopping 52 index points so the index which lost 39 points would have had a solid positive day. Once again S&P volatility (VIX) barely moved but rose for a second day by just .23 to 12.69, from just above the lowest level since 5/25/07. Bears watchihng (pun)! Consider that the peak in stocks was just after this period of complacency…while the high was hit on October 11, 2007, it was the financials that peaked in May…keep that in mind! NYSE Financials rose 0.5% led by Brokers rising 1% offsetting Wednesday’s 1.1% drop vs +1% vs +1.5%, while KBW Banks rose 0.4% vs -0.3% vs 0.8% vs +0.3% while Nasdaq Banks barely moved +0.1% vs +0.9% vs 0.2% BofA was most active stock as always +1% vs -0.4% vs +1.9% vs -1.2% vs -4.2% vs +2% vs 0.7% vs -1.4% vs -1.3%….going nowhere! Total NYSE volume rose slightly to 3.68B shares vs 3.51B vs 3.55B vs 3.76B vs 3.68B vs 3.16B vs 3.13B vs 2.96B – recent range 2.96B-4.2B. Trades executed on the floor of the NYSE rose to 679M shares vs 638M shares vs 699M from Friday’s 1.07B shares, on options expiry, highest since 12/21,  the 12 month high of 1.88B shares, from 710M vs 499M (lowest since 12/27). Recent range 499M-1.88B. Advance/declines and Breadth were all modestly positive. New 52 week highs which had a recent high of 713 after bottoming at 308, surged to 679 vs 540 vs 688 vs 518 on the expiry vs 552 vs 270 vs 304. Recent range 270-713. New lows rose but to a still weak 20 vs 12.

European stocks higher Asia mixed: Nikkei +2.9% vs +1.3%. India +0.9%, Korea -0.9% vs -0.8% vs -0.8%, Hang Seng -0.1%. UK +0.1%. France +0.7%, DAX +1.3%!!! U.S. stock futures mixed Nasdaq slaughtered following Apple earnings: DOW +34; SPX +5; NDQ +12 vs -40!!!. All are near overnight highs.

The bond market was weak yesterday and is even weaker overnight. The 10 yr note is 1.91% -1/2 vs 1.84%, and the 30 yr 3.10% -1 pt. vs 3.04% – the old 3% high set on 12/18! Long TIPS also weaker at 0.45% -3/4 vs 0.43% – well off the 0.22% record low set on 12/6! Reverse Repo rate at 0.19% steady. Libor 0.30%, 3 months, and 0.476% six months…these are new recent lows. Foreign bond rates higher across the board by about 5 basis points except for Spain 5.11% -11!) and Greece (10.10% -16!!!).

Gold was pulverized yesterday closing just 2 points above the 200 day ($1668) at $1669.90 -$16.80! Resistance is now the 40 day ($1685), then the 50 day ($1694).,The $1636 low on 12/21 – lowest since 8/21 is key support. It is being pounded again overnight at $1660.10.10 -$9.80!!! Crude rose by 72 cents to $95.95 on an inside session after putting in an intraday high of $96.92 (highest since 9/17) on Wednesday. Overnight it is $96.50 +.55. Lots of handwringing lately….especially by Gold bugs!

…Obama had barely uttered the name of Mary Jo White for SEC Chairman and they came out of the woodwork…including consumer advocates: we know little or nothing about her! Too bad all these ‘eggspurts’ didn’t voice the same concerns when Dubya appointed Representative Chris Cox (R-O.C.) to replace the eminently-qualified William Donaldson. Cox was a do-nothing Chairman despite the destruction of Glass-Steagall just before his appointment. Donaldson on the other hand had an idea which might of saved the banks from themselves. Despite the new law stating that the top five banks would no longer be examined, he planned ‘random audits’ of them. Cox ignored that sage advice and no bank was examined on his watch! Up to and including the collapse. Furthermore, his ignorance of ‘naked shorts’ which were most prevalent in financial stocks allowed speculators to do the very thing the first SEC Chairman Joe Kennedy destroyed: the ability to drive a stock down to bargain basement levels by overpowering any and all buyers which came back to haunt us with the fall of Lehman Brothers. Cox stood by aimlessly while the walls came tumbling down. This will not be the case with Mary Jo.

As for Cox’s replacement, Mary Schapiro, she came from the former NASD now FINRA, a regulatory body funded by the securities industry, and which is now trying to regulate investment advisors as they do financial planner – who work in the industry. The investment advisors are calling foul, knowing that it will not be a level playing field. When Schapiro left FINRA she was granted a $9 million farewell…which couldn’t have influenced her decisions…could it (Elisse Walter remains on the SEC board and also followed Schapiro’s career path)? At any rate, little was done by Schapiro in the way of enforcement except fines collected from companies that were ultimately paid by shareholders.

Mary Jo White, one of the most visible U.S. District Attorney’s represented the Southern District of New York and was tenacious against the perps, most notably Bernie Madoff, but also others involved in the financial crisis. She is also fiercely independent. Appointed by Clinton she investigated Marc Rich despite pressure from above. She also opposed the Obama administration over the firing of the regional D.A.’s. She is ably qualified and the consumer advocates should shut up rather than aid and abet the financial lobby who will not be in favor of her appointment…the GOP only too willing to comply! Of late, White is a defense attorney representing the perps…this alone should make us want her back on our side!

These Senate hearings are becoming a mockery. The GOP has opposed more appointments by Obama than at any other time in history and is disgracing itself through nitpicking. Sen. Kerry is getting away easy as he was on the Foreign Relations Committee and TB feels one reason the GOP wants him as Secretary of State is to create the potential for a GOP replacement.  Then there is Sen. Hagel’s testimony where he and McCain who along with Lindsey Graham don’t like anything about this administration and to TB are making fools of themselves…over and over. They destroyed the chances of an appointment for Susan Rice on trumped up accusations that were patently false. Kudos to Hillary Clinton who called the Benghazi investigation what it is: a witch hunt. Nothing would have prevented those four deaths and any action might have caused more. Leave it! The GOP has truly become the Grouchy Old Party. Don’t they have enough problems with the extremists in their own party.

The acting head of the Consumer Financial Protection Agency, also a former district attorney with a strong record is coming up once more. First the Senate killed Elizabeth Warren’s appointment, then refused to make this appointment leading Obama to make it temporary creating another GOP uproar that he was circumventing the Senate. How can this be…and how can he choose his people when they can’t even get an up or down vote? Perhaps the new filibuster rules will help…one can hope! Both sides are acting worse than children. At least children don’t know better.

Back to gun control…first to Texas where Gov. Rick Perry who favors guns in every school a la the NRA. The shooting at a community college in Houston validates TB’s point that a gun turns an altercation into a murder by the ability to react rather than to think rationally about the consequences. Well done, Texas!

Lastly, Sen. Dianne Feinstein continues to draw fire from the right on her assault weapon ban. TB does not agree with all of it and would like to see more but before one criticizes her, recall that she became the mayor of San Francisco on the assassinations of Mayor Moscone and Supervisor Harvey Milk by a deranged council member and fireman, Dan White. After being convicted and freed, he took his own life…appropriately with a gun. Also remember that it was just after she entered the U.S. Senate that the shootings at 101 California, a building TB had worked in, took nine lives and led to a long standoff. She has ample reasons for her feelings, and they are not political!

As TB wrote in the gun column on Monday, since MLK was assassinated in 1968, there have been 1,620,000 Americans killed with guns. The total loss of life for all U.S. wars is just 650,000. Think how many lives could have been saved without the lobbying of the NRA and their senseless blather with absurd examples such as more people being beaten to death each year, if serious gun control would have been enacted then. Think how many fewer guns and clips would be on the street. Think how many more guns are sold each time there is a mass murder and the NRA uses its trademarked scare tactics. Think how many lives might have been saved and how many fewer guns even with the weak weapons ban Feinstein introduced in 1994 which expired in 2004 and how many more assault weapons are out there just since then.

Memo to Wayne LaPierre and David Keene of the NRA: White was one of those upstanding citizens that should have guns…until he wasn’t mentally capable. Ruled temporary insanity but isn’t that what any shooting is? Like a heroic move in a battle…you don’t think about it and a gun enables you to act quicker with less thinking.

While the NRA rants think of all those guns that have been sold since Sandy Hook and how many will end up taking innocent lives…all in the name of personal safety. Sad.

Have a terrific weekend! TB just wants to stay warm!!!

TB

. . .  – – –  . . . (SOS!)  . . .   – – –  . . .  (SOS!) . . .   – – –  . . .  (SOS!)

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1 Comment »

  1. traderbill said

    …and it is the responsibility of the government to protect its citizens from those who will not or are incapable of accepting their personal responsibility. What responsibility does the NRA accept?

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