12/26/13…a birthday wish from TB: read it and weep!

Today is TB’s 69th birthday, so ‘it’s my party and I’ll cry if I want to, cry if I want to, you will cry too when it happens to you!’

Joke of the Day from the Friar’s Club Encyclopedia of Jokes: Sign above bank teller’s station: “To err is human, to forgive is not bank policy.” – unattributed

Bloomberg Quote of the Day: “Rumor travels faster but it doesn’t stay longer than the truth.” – Will Rogers

Bloomberg Top Stories:

*Erdogan Resignation Call Chokes Plan to Prop Up Turkish Lira Led by Basci

*Yen Weakens on BOJ Bets as Turkish Stocks Drop, U.S. Index Futures Advance

*Amazon Refunds Shipping Costs After UPS Misses Christmas Deliveries

*Bond Downgrades at U.S. Companies Escalate With Leverage Highest Since ’07 – and what pray tell happened a year later? Stock market began its descent – buy stocks?

*Deutsche Bank Sees Asian Comeback as Pimco Positive on Growth

*Mizuho Chairman Tsukamoto Steps Down After Fresh Penalties for Crime Loans

*GM’s Robo-Glove to Automated Meat Hook Smooth Human-Machine Teamwork-sure!

*Citrus Bug Bites Florida Orange Harvest to Two-Decade Low

*Women Take on Philippine Rebels for Mindanao Peace to Unlock $300 Million

*Iranians Pile Into Stock Markets as Nuclear Détente Triggers 133% Advance – SELL!!!

*Erdogan Recruits Loyalists to Steel Cabinet as Corruption Scandal Deepens! – again!

*Cairo Bomb Injures Five as Egypt Tightens Noose on the Muslim Brotherhood

*Abe Angers China With Visit to Japan’s Yasukuni War Shrine on Mao Birthday

*Yassar Arafat Died of Natural Causes in Russia Tests Disputing Swiss Study

Tuesday’s Market Summary:

The Dow squeaked higher to another new record high of 16360.60, and closing just 3 points below that, making the third straight record high since 11/29’s (monthend) record, of 16174.51. Volume? Heh, heh….just 1.3B shares and 272M shares traded on the floor of the NYSE…BOTH TWELVE MONTH LOWS!!! Disregard everything that happened Tuesday and ask yourself how confident you are that the ‘rally’ (sic) will continue past January. Note the top story above on leverage at U.S. Companies and that this is the highest amount since 2007 – the year financial stocks peak if you recall as did home  prices. Also be aware that New Home sales fell sharply and mortgage apps – from purchases to re-fi’s and ask yourself if you fell lucky…well do you, investor?

Skipping over the volume, Advance/Declines and Breadth were positive AND the VIX declined again to 12.48 -.56, lowest since 11/22 – from which it began its rapid rise

Modest gains in all indices of 0.2-0.4% except the NDQ 100 which rose just 0.1% – Apple not cooperating!Dow Utilities rose 0.4% vs -0.3%, this the only loser on Monday.

The Nasdaq 100 gained just 3.4 points vs +38 vs +32.5 vs -11 vs +40 vs -6.5 vs -19. Breadth was positive again at +2:1 vs +4:1 vs +4:1 vs +3:1 vs -2:1 vs +8:1. Just two  members gained more than an index point, led MSFT +3.4 vs -1.1 vs +3.8 vs -2.4; TSLA +0.9. Two losers: APPL -2 vs +3.4 vs -3.4 vs -2 vs +2.5 vs -4.9; BIDU -0.8 – had to fudge to get even two movers.

Dow 30 +0.4% vs +0.5% vs +0.3% vs +0.1% vs +1.8%!!! Dow Transports ++0.4% vs +0.4% vs +1.1% vs flat vs +1.2%; Russell 2000 +0.4% vs +0.9% vs +0.9% vs -0.7% vs +1.3%; Dow Utilities +0.4% vs -0.3% vs +1% vs -0.7% vs +1.2%; S&P 500 +0.3% vs 0.5% vs +0.5% vs -0.1% vs +1.7%; Nasdaq Composite +0.1% vs +1.1% vs +1.2% vs -0.3% vs +1.2%; NDQ 100 +0.1% vs +1.1% vs +0.9% vs -0.3% vs +1.1%.

*NYSE Volume plunged for a second day in a shortened session, to a 12-month low of 1.3B shares vs 2.83B vs 4.97B one of the three highest of all time on options expiry, vs 3.49B vs 4.29B vs 3.25B. The record high (?) is the 4.97B shares Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume also plunged to a 12-month low of 272M shares vs 611M vs 1.97B – highest since 9/20’s huge 2.06B shares, vs 701M vs 828M. The 12-month average dipped to 720M shares. This year there have been just TEN 1B+ share sessions! There have been 39 800M+ shares in 2013: 18 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They slipped to a still high 608 vs 698 vs 550 vs 304 vs 334. Recent high is a super-strong 890!!! New lows were lower again at a weak 44 vs 68 vs 81 vs 127 vs 131 vs 135 vs 133 vs 353. Recent low is 35!  

  1. Advance/Declines were positive: +2x vs +2.4x vs +3.1x vs -1.4x vs +3.6x! (recent range -17.5x to +6x) on NYSE and +1.6x vs +2.6x vs +2.6x vs -1.6x vs +2.5x (recent -4x!!! to +3.8x). Breadth was similar: +3.1x vs +2.9x vs +2.3x vs -1.14x vs +4x! (recent -18.6x!!! to +7.2x!!!) on NYSE and +3x vs +4.3x vs +4.6x vs -1.3x vs +3.1x (recent -12.8x to +6.5x).  
  2. NYSE Financials rose just 0.2% vs +0.7% vs +0.5% vs +0.2% vs +2.1%!. BofA most active: +0.1% vs +0.6% vs -1%! vs +0.4% vs +0.4%, closing at $15.70 +.01. 11/25’s 12-month high was $15.98, highest since 6/1/10. Brokers -0.3% vs +0.9% vs +1.8% vs -0.6% vs +1.8%; KBW Banks +0.2% vs +0.9% vs +0.5% vs +0.1% vs +2.1%; Nasdaq Banks +0.1% vs +1.4%! vs +1.3% vs -0.7% vs +1.4%.
  3. Volatility (S&P VIX) fell sharply again closing at 12.48 -.56! Lowest since 11/22! High for last week was 16.67! It is well below the 40/50 day m/a’s: 13.65/13.76, while the 200 day is 14.38. The recent range is 11.83-21.01!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Bonds declined yet again and the 5-30 year continued to flatten! 30 yr closed at 3.89 -7/16 while the 10 yr closed at 2.98% -7/16. Long TIP closed 1.59% -3/8. Overnight they are slightly weaker again: 10yr 2.99% -3/32 (recent range 1.63% to 2.99%), and the 30 yr 3.91% -1/4 (recent range 2.67% to 3.92%). The long TIP is 1.61% -3/8. The (record?) low of 0.36% was set on 4/5. NOTE recent high yield: 1.63%! Libor update: 0.247% 3 mos, 0.349% 6 mos. (both almost at record lows!). Foreign bond markets closed for ‘Boxing Day’, Tuesday’s closes: Germany 1.89% +1; UK 2.97% +1; France 2.48% -1; Italy 4.15% -2; Spain 4.19% -1; Portugal 5.95% -1; Greece 8.04% -16!!! vs -11 vs -3 vs -11! Recently: 7.71% – 12.57%. Japan trading…0.70%!!! +2.

Gold bored us yet again with a second straight ‘inside’ day making range very tight and closed just above $1200 at $1204.40 +7.40. Last Friday’s low was $1188…at least still above Thursday’s $1186 – LOWEST since 12/31/02. Recent high is $1375.40 on 9/19. $1200 is sup/res, and $1300, psychological resistance with major res at the 40 day ($1260!) and the 50 day ($1273!). The 200 day is a $1360. Overnight it is slightly higher at $1208.30 +$5.00, with a session high of just $1208.700

Crude traded in another narrow range and almost parallel to Monday, making an effective three straight ‘inside’ days and closed slightly higher at $99.17 +.26. Last Wednesday’s low was $96.26, lowest since 12/3. On 11/27 it printed a new low of $91.77, lowest since 6/3!!! 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. It remains above the 40 day m/a ($95.70) and the 50 day (96.41), both major support! The 200 day is $98.89, and major sup/res! 4/18’s low of $85.61 was lowest since 12/11! The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly lower at $99.17 -.05, range $99.05-99.65.

Overnight markets:

European markets closed for Boxing Day, Asia mixed: UK closed vs +0.2% vs +0.5% vs +0.3% vs +0.8%; France closed vs +0.1% vs – vs +0.1% vs +1%; Germany closed vs +0.9% vs +0.6% vs +0.5% vs +1.1% vs +1.1%; Japan +1% vs +0.1% vs closed vs +0.1% vs +1.7% vs +2%!; Hang Seng closed vs +1.1% vs +0.5% vs -0.3% vs -1.1%; Korea -0.1% vs +0.2% vs +0.7% vs +0.4% vs +0.1%; India +0.2% vs -0.3% vs +0.1% vs +1.8% vs -0.7% vs +1.2% vs -0.2%. U.S. stock futures higher in another very tight range again: DOW +45; SPX +2.20; NDQ +6 – nothing to see here…

Some random thoughts:

Not much to comment on today as we head into yearend…besides it’s TB’s birthday…69 awesome years – not that he looks ‘awesome’ but the years have been…awesome and breathtaking describing his ‘going on’ 42 years in this wacky business of ‘investing’ (sic).

Kids…thinking of a career??? Avoid this one and do something that produces value. Fortunately many are and turning to teaching, engineering and other sciences. As for the Ivan Boesky inspired, Gordon Gecko quote: “greed is good” – it is most definitely not!

Our kids will not thank us for what we did for them. The ‘greatest generation’ for their suffering tried to make life better for us…and they did…to a fault! We took that largesse and turned it into greed and a lack of humanity. Remember the anti-Viet Nam riots, draft dodgers, and flag-burners, which TB a Viet Nam vet, loathed. He was at UC Berkeley on Navy Day, October 27,1965 and saw the beginning of the movement…student on the quad curious but most sitting and eating their lunches…girls still wearing dresses!…and of course Mario Savio, the founder. People stopped by his booth and listened, then went on their way. Who knew?

Then TB went to Viet Nam…thought he was doing good, only to find out a few years after his return what a fouled up war it was…all based on the fear of ‘domino theory’.

It divided the country, ruined lives, and even one of the perps, Robert MacNamara, Secretary of Defense under LBJ, finally issued a mea culpa in his memoir (sic), stating he knew it was wrong but could do nothing about it (sounds a lot like ‘I was just following orders’, no?, yet HE was making policy. If he felt that way, he should have resigned!)

For more than fifty years youth had no cause and thus no direction…until 2008…and the failure of the government to prosecute brought on the ‘Occupy Wall Street’ movement, which the GOP immediately, without even stopping to think, dismissed as a bunch of dirty hippies (shows you how dated that was!).

The movement had two major flaws…first while it had the appearance of a ‘grass roots’ movement, it had no focus – unlike the Tea Party (wrong though that was, including the name, as well as the funding by the self-serving Koch brothers), and turned to anarchy.

This was the second flaw…to occupy, is revolutionary…to reform is what a democratic government does. Therefore the name TB wanted was Reform Corporate America – and Government, with the catch name: RCA! If you want to start a group with that name, have at it as you have TB’s blessing…but do so now! TB lacks the energy and contacts.

We now have produced the biggest wealth gap since the era of the Robber Barons, which led to the Great Depression. We just had a Great Recession, which was arguably a depression but actually a financial crisis, and which cannot be cured by either monetary of fiscal policy…the average one lasting eight years. The Fed has tried to artificially cure it with ‘quantatative easing’ but has only succeed in inflating asset prices, mainly stocks, which has driven an even bigger wedge between the top 1% and the bottom 90% – the area of concern should not be the top 1% but the new grouping devised by the IRS more than five years ago: the top 0.1% – now mainly occupied by those from the financial district and CEO’s – many of whom created the problems, and didn’t even rate a hand slap. Welcome to the new America, and if you and I don’t do something soon, it will be an abomination of the name.

There, it was my birthday and I have said my piece. You have a choice: agree or disagree. Just ask yourself this: what would the founding fathers say? One thing for sure is they would say: stop holding the Constitution in front of you while you destroy it!

Have a great day…TB plans to!

TB

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