3/6/13…gremlins!

From the Friars Club Encyclopedia of Jokes: “There’s an old saying that the sun never sets on the British Empire. Well, while we were there, it never even rose.”  – Ring Lardner…or…

“The sun never sets on the British Empire because God doesn’t trust the Brits in the dark.”

Bloomberg Quote of the Day: “If you’re going through hell, keep going.” – Sir Winston Churchill

Bloomberg Top Stories:

*Bank Boom Seen Handing Investors $41 Billion in Best U.S. Year Since 2007 – amazing, and we

didn’t even attempt to solve the problems they have created!!!

*Stocks Advance Worldwide After Dow Touches Record as Spanish Bonds Climb

*UBS Said to Face Defections From O’Connor Hedge Fund After Bonus Clampdown

*Traders Flee Asia Hedge Funds as Stagnation Turns Job Haven Into Dead End – and if the China

real estate bubble bursts? It is a bubble of proportions that dwarfs the U.S.!!!

*Microsoft Fined $731 Million for Not Complying With EU Brower Choice Rule

*Swap Traders Seeking Amends After Greece Shakes Confidence

*Euro Exports Fall for First Time in Three Years as Slump Deepens – go figure!

*Dreamliner Pilot Turns Rapper as Grounded 787 Planes Means Nowhere to Fly

*Chavez Legacy of Polarized Venezuela Endangers Smooth Political  Transition  – we blew it

with Cuba and we will probably blow it again.

*Snow Heading Toward Washington Scrubs Flights, Closes Government Offices

*Are You Better Off Than When Dow Hit Last Record in 2007? By James Greiff – remember it

peaked in Oct. 2007 along with other’ sane’ stocks as real estate prices peaked…is the current

R.E. boom real? Can it carry stocks yet again? You decide!

Ah, a day for the bobbleheads at CNBC to crow about the new Dow high and high close…a whopping 88 and 56 points respectively above the 10/11/07 record high. Did anyone adjust that for inflation? …or for a reasonable return? Also, as pointed out in a prior column it isn’t even the same Dow!!! No more AIG, Citi, or others. If it drops today ‘mum’s the word’ as always. What a ship of fools at our sterling financial station! Oh, and volume barely moved and trades on the NYSE actually declined…what are those stocks? Mostly DOW!!! It really is a fool’s folly!

Despite the ‘tepid’ volume, the biggest gainers were Dow Transports which rose 1.5% vs  +1% and the two Nasdaq indices and Russell 2000 small cap +1.2-1.4%. Oh and the Dow Utilities rose 0.5% vs +0.9% – strange bedfellows indeed!

The high on the Dow was a new record 14286 and a new high close of 14253, +0.9%. The S&P rose by 1%.  This could be another year of ‘sell in May and go away’ – IF we make it that far…and if the extremists in the GOP have their way it will be even earlier!

Total NYSE total volume rose to a modest 3.57B shares from 3.38B shares following an ‘average’ 3.76B shares vs 3.53B vs 3.92B vs 3.81B vs vs 3.41B vs 4.26B and 4.2B (highest of 2013 by about 400M shares). Real NYSE volume however slipped to 683M shares from 693M shares vs 743M vs last Thursday’s (monthend) 1.01B shares!!!(second only to 1/18’s 1.07B and third best to 12/21’s 12 mo. high of 1.88B shares) vs 673M vs 772M vs 819M vs 683M. Note the average volume since 2/15 is a weak 781M shares!!! Ave vol. 12 mos. 747M, ytd 716M. There have been just eight 800+M shares in 2013. This is a very weak rally that is producing record highs on the Dow???

  1. new highs which have ranged from 121-680 (2/19), then plummeting to just 121, nearly doubled to 709 vs 418 vs 274 vs 326 vs 268 vs 145 vs 273 vs 214. New lows were slipped to 73 vs 98 vs 93 vs 59 vs 49 vs 74 vs 52. Irrational?
  2. Advance/Declines were positive at +2.8x vs +1.3x vs +1.3x vs +1.1x vs +3.2x vs +2x vs -3.6x on NYSE and +2.4x vs +1.2x vs +1.3x vs -1.1x vs +2x vs +1.5x vs -4.4x on Nasdaq. Breadth was even better at +4.1x vs +1.5x vs +1.2x vs -1.1x vs +6.2x +2.4x vs -9.7x on NYSE and +3.4x vs +1.8x vs +1.7x vs -1.1x vs +4.4x vs +1.6x vs -4.5x on Nasdaq.
  3. The Nasdaq 100 rose by 1.4% or 40 points. Apple was the big winner at +9 followed by Google +4. This a day after being once again the big loser dragging it down by 8.5 points. Also, the Russell 2000 small cap was up 1.2% vs +0.2% after being up 0.4% for two days. The RTY is normally a forecaster of rising stocks.
  4. NYSE Financials rose 0.9% vs +0.5% vs +0.1% vs -0.2% vs +1.4% vs +0.6% vs -2.5%. BofA still most active rose 1.2% vs +0.6% to $11.55 vs +0.1% vs +1.7% vs +0.9% vs -1.6%, coming back from $11.11, lowest since 12/17, well below the 40/50 day m/a’s for the lowest close this year – from $12.42 high on 2/13. Note that due to the low price 11 cents is a 1% change!!!  MGIC rose 27.8% vs +10.3%  (+30% at the Monday’s high!) still benefitting from a belief that they and MBIA  would get a bigger share of mortgages as government lowers its exposure…but that much??? Shorts!
  5. Lastly volatility (S&P VIX) which had back to back lows going back to 2006 – huge complacency, had risen 52% in four days: 12.13 – 18.99 (with an intraday high Monday of 19.11, highest since 12/31 – highs on 12/30-31 were 22.72 and 22.19 respectively, highest since 6/15. It fell again by 3.8% to 13.48 vs 14.01 -.53 or 3.8% well below the 50 day m/a (14.68). An increase in VIX is associated with more puts being created than calls!!!

Global equity markets higher overnight, led by Asia…on Dow record high??? UK +0.4% vs +1.1% vs -0.4% vs -0.7% vs +0.4%; France +0.3% vs +1.6% vs +0.2% vs -1.5% vs +0.1%; Germany +1.1%! vs +1.9% vs -0.4% vs -1.2% vs +0.6%; Japan +2.1%!!! vs +0.3% vs +0.4% vs +0.4% vs +2.7%!!! vs -1.3% vs -2.3% vs +2.4%, Hang Seng +1% vs +0.1% vs -1.5% vs -0.6% vs +2%; Kospi +0.2% vs +0.2% vs -0.7% vs closed vs +1.1%; India +0.6% vs +1.4% vs -0.2% vs +0.3% vs +1.5%. U.S. stock futures trading in a narrow range, but at session highs – redux of Tuesday: DOW +60; SPX +6.90; NDQ +8.25. Payrolls on Friday – caution!

Bonds continue to be slammed – accelerating overnight: 10 yr Treasury range of from 2.06% to 1.85% last 11 sessions, now 1.94% -3/8 and the 30 yr’s 3.23% to 3.05%, now 3.15% -13/16. The long Tip also weaker at 0.56% vs 0.53% vs the high of 0.60%. Libor update: 0.240% 3 mos., 0.450% 6 mos!!! Foreign bond yields higher ex Italy, Spain and Greece: Germany 1.47% +2; UK 1.97% +1; Italy 4.62% -11!; Spain 4.97% -5; Portugal 6.02% +1; Greece 10.67% -11!!! Japan 0.66% +4.

Gold closed slightly higher climbing back off support as the loss from the 1/17 high of $1699.90 dipped at $117! It closed at $1571.10 +2.40, down -$73 in 7 sessions but still above a week ago Thursday’s low of $1554.30 – not seen since May 2012! Overnight it is $1574.70 -.40. The total breakdown through the 40/50/200 day m/a’s, has major resistance $1643-1668, with first resistance at $1600, a double bottom from 8/14-15, also a psychological level. Last time it was below $1500 was Sept. 2011!!! Crude also rose slightly yesterday, a day after setting another new low of $89.33, lowest since 12/26, and way below the 40 day ($94.93), AND $94.10, the 50 day. It closed at $90.82 +.70. Overnight it is little changed at $90.69 -.13 in a tight range, just above the 200 day 90.37!

Some random thoughts:

As long as we allow a narrow minority of extremists (financed by some of the richest men in America and the financial sector to dictate to first their own party (GOP), even as its popularity declines by polarizing their constituency we will continue to languish economically and culturally. They create one crisis after another due to a public that only listens to that which represents their views.

The majority has already become a minority and the minority of wealthy individuals is shrinking but driving the wedge further between the classes in what has amounted to the biggest transfer of wealth and power in our (any nations?) history. No nation can survive in its original form under that scenario. Rome, France, Russia, 0and others who have attempted it have been thwarted in a most painful way that benefits no one and punishes everyone. You decide which makes sense.

Have a great day!

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