1/9/14…’wolves’ or sly foxes?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If love is the answer, could you please rephrase the question?” – Lili Tomlin, and…”Love is what happens to a man and a woman who don’t know one another.” – W. Somerset Maughan, or…

“Love is like an hourglass, with the heart filling while the brain empties.” – Douglas Jerrold

loomberg Quote of the Day: “If you can’t feed a hundred people, then feed just one .” – Mother Teresa…better make that two Mother…like ‘one hand for the ship and one for yourself.’

Bloomberg Top Stories:

*First-Time Unemployment Claims in U.S. Decrease to Lowest Level in a Month- booyah

*Draghi Reinforces Pledge for Low Interest Rates to Stoke Europe’s Economy

*BlackRock Traded Using Nonpublic Data From Analsyts, Investigations Shows – No!?!

*Gross Says Focus on Shorter Maturities as Slow Inflation Pace Trumps Jobs

*Alcoa Will Pay $384 Million in Penalties, Fines in DOJ, SEC Bribery Cases –same old

*Ford Boosts Quarterly Dividend 25% as Automaker Cites Improved Liquidity – really?

*KKR Raises $2 Billion for Credit Fund Investing in Global Distressed Market

*Bitcoin Believers Stoke Computing Arms Race Seeking Virtual Currency Glory – hmmm, could the ‘unknown programmer’ actually be the guy in New Zealand?

*Christie Presidential Prospects Face Early Test Amid Traffic-Snarl Crisis

*U.S. Energy Secretary Moniz Cancels India Trip Amdi Diplomatic Fraud Row – ???

*Military Costs Are Resolved ass Congress Moves to Avoid Government Shutonwn

Wednesday’s Market Summary:

The rallies of late are…uh…short and uh…not so sweet! Biggest volume day since December 20th and it was a mixed day…3.63B shares for NYSE stocks and Real NYSE Volume of a well above average 759M shares – not only highest but first time above 700M since 12/20! True, it wasn’t a down day but it sure was mixed. Dow Transports and the two Nasdaq’s both in the green at +0.3% – puny! Next best was the S&P 500 and the Russell 2000, both FLAT! Dow -04% and Dow Utilities the goat again at -0.5%! What’s a mother to do? Or how about the schizophrenic NYSE Financials? Brokers -0.4%; KBW Banks +0.8%, Nasdaq Banks +0.4%…for a combined +0.4% – isn’t that special?

Nothing to see here folks, except another psychotic indicator: Apple, which can’t make up its mind what to do? UP 0.6% yesterday but on Tuesday’s rally it fell 0.6% vs up 0.8% and DOWN 2.2% a day after plunging 2.4%. Why the interest in Apple? Because it is a significant part of the two Nasdaq’s (especially the 100) and the S&P 500, weighting unavailable.

Also yesterday, we got the release of the December FOMC minutes…why did they begin the taper? Strong economy – survey says NO! Well, why then? Because they felt the taper wasn’t really stimulating the economy! Consequence? Bonds which had been sharply lower came back wth minor losses…except TIPS which posted more than a half point gian to 1.48%! – why do you want inflation protection after that??? Oh, and the 10-30 curve FLATTENED again. That spread was as wide at 125bp’s on March 28th , and as low as 89bp’s on September 5th – yesterday? It came in to 90!!! Hmmm…

Advance/Declines were slightly negative while Breadth were slightly positive? The VIX declined ever so slightly to 12.87 -.05, but the range was 12.86-13.24 – back to that pesky 13 handle…a state of flux…flummoxed?.

The Nasdaq 100 gained another 10 points (8 of them from three stocks) vs +31 vs -12 vs -25 vs -28 vs +22. Breadth was barely positive at +1.3:1 vs +3.5:1 vs -3:1 vs -2:1 vs -6:1 vs +3:1. Just six members gained more than one index point, while one (MSFT -4.8!), lost more than a point: BIIB +3.5; APPL +2.7 vs -3 vs +4.4 vs -9.7!!! vs -6.4! vs +5.3! vs -2.6 vs -3 vs -2;  MU +2 vs +1; AMZN +1.6 vs +1.8 vs -1.1; CELG +1; GILD +0.9; MSFT -4.8!!! vs +1.9 vs -5.6! vs -1.9 vs -2 vs +1.

Dow 30 -0.4% vs +0.6% vs -0.3% vs +0.2% vs -0.8%; Dow Transports +0.3% vs +0.7% vs -1.3%! vs +0.5% vs -1.5%!Russell 2000 – vs +0.9% vs -0.8% vs +0.5% vs -1.1%!Dow Utilities -0.5% vs +0.8% vs +0.2% vs -0.3% vs -1.6%! S&P 500 – vs +0.6% vs -0.3% vs – vs -0.9%; Nasdaq Composite +0.3% vs +1% vs -0.4% vs -0.3% vs -0.8%; NDQ 100 +0.3% vs +0.9% vs -0.3% vs -0.7% vs -0.8%.

*NYSE Volume rose again to an above average 3.63B shares vs 3.48B vs 3.23B vs 2.76B vs 3.06B vs 2.3B vs 2.27B vs 2.04B. The record high (?) is the 4.97B shares of 12/20/13 and Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume also rose to 759M shares vs 699M vs 669M vs 544M vs 624M vs 568M vs 462M vs 424M, from the new 12-month low of 272M. The average since 12/20 is just 618M shares with a high of 759M! The 12 month is 719M shares. Last year there were just TEN 1B+ share sessions! There were 39 800M+ shares in 2013: 18 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They rose again to 355 vs 316 vs 271 vs 217 vs 201! Recent high is a super-strong 890!!! New lows barely budged to a still very weak 30 vs 20 vs 30 vs 23 vs 43 vs 78 vs 72 vs 76 vs  60 vs 44 vs 68 vs 81 vs 127 vs 131. Recent high is 353; low 20!!!  

  1. Advance/Declines were negative: -1.3x vs +1.9x vs -1.2x vs +1.8x vs -2x (recent range -17.5x to +6x) on NYSE and -1.1x vs +2.3x vs -1.7x vs +1.6x vs -1.8x (recent -4x!!! to +3.8x). Breadth was slightly positive: +1.04x vs +1.5x vs -1.3x vs +1.2x vs -2.1x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.4x vs +3.8x!!! vs +1.1x vs +1.2x vs -1.4x (recent -12.8x to +6.5x).  
  2. NYSE Financials +0.4% vs +0.4% vs +0.1% vs +0.5% vs -1%. BofA most active – natch: +0.4% vs -1% vs +1.5%??? vs +1.9%??? vs +3.4%???, closing at $16.58 +.08. Brokers -0.4% vs +0.7% vs -0.4% vs +0.6% vs -0.4% vs +1.2%!; KBW Banks +0.8% vs +0.4% vs +0.4% vs +0.8% vs -0.5% ; Nasdaq Banks – vs +0.5% vs -0.7% vs +0.2% vs -1.3%!!! vs +0.1%.
  3. Volatility (S&P VIX) fell for the 4th straight time in 7 days and remains below the 40/50 day (13.62/13.56) and well below the 200 day (14.40), closing at 12.87 -.05. 12/26’s (TB’s birthday) 11.69 was lowest since 3/15/13!!! Recent high on 1/2 was 16.67! 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 were weaker but came back from a rout caused by release of the FOMC minutes from last month, while the long TIP closed higher? What? Inflation fears??? Slightly weaker overnight : 30 yr 3.90 -1/16; the 10 yr  2.99% -1/32, recent high 3.03%! Long TIP 1.47% +1/8? The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.242% 3 mos,0.345% 6 mos. Just above  record lows 0.240%!!! and 0.344% respectively!). Foreign bond yields slightly higher except Italy/Spain/Portugal – Greece just above a new post-crisis low!!! Germany 1.91% +1; UK 2.97% +1, recent high 3.03%!; France 2.54% +3; Italy 3.87% -1; Spain 3.75% -3; Portugal 5.29%!!! -5; Greece 7.55% +1. Recent range NOW: 7.52%-12.57%. Japan …0.69% -1. Yen weaker again at 105.00…1/3’s 105.44 weakest since 10/1/08!!!

Gold traded in a narrow range and closed lower at $1225.50 -$4.10, following Monday’s ‘outside day’ which had a high of $1247.70, highest since 12/16. This Jan. 2’s low of $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. $1200 is sup while $1300 is psychological resistance with major res at the 40 day ($1238!) and the 50 day ($1255!). The 200 day is $1343. Overnight it is slightly higher at $1228.70 +$3.30.

Crude crushed again falling to $92.26 – lowest since 11/27!!! Before stabilizing to close at $92.33 – talk about a ‘bad day at Black Rock! Down and downer? Note 12/27 was first time above $100 since 10/21! 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 is way below the three key m/a’s which are now major res: 40 day m/a ($95.93!!!), 50 day (95.87!), and the 200 day ($99.03!!!) – the 40/50 still falling and all major resistance! 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 up slightly at $92.83 +.50.

Overnight markets:

European equity markets slightly better, Asia weak: UK +0.1% vs -0.4% vs +0.5% vs +0.1% vs +0.3%; France – vs -0.1% vs +0.4% vs -0.1% vs +0.7%; Germany +0.2% vs -0.1% vs +0.6% vs +0.1% vs +0.5%; Japan -1.5%! vs +1.9% vs -0.6% vs -2.4% vs closed three days; Hang Seng -0.9% vs +1.3% vs +0.1% vs -0.6% vs -2.2%!!!; Korea -0.7% vs flat vs +0.3% vs +0.4% vs -1.1%! vs-2.2%!!!India -0.1% vs +0.2% vs -0.5% vs -0.3% vs -0.2% vs -1.2%! U.S. stock futures higher overnight: DOW +38 (range 78); SPX +3.50 (10); NDQ +4.50 (16).

 

Some random thoughts:

The Polar Express is just a memory…+4 degrees here! ‘we’re havin’ a heat wave, a tropical heat wave…’ An idea TB forgot to mention yesterday to amuse yourself in the weather…go to Starbuck’s  – or Caribou – get a Latte…set it on the ground for 10 minutes and recycle the cup…kids, be sure to wear gloves when doing this!

Now back to the promised review of The Wolf of Wall Street. Who was that guy from Texas who wrote the funny reviews? Aha…Joe Bob Briggs! Here is what he would have said: Gratuitous sex, gratuitous nudity (including one of a male appendage), gratuitous fu. Destruction of the Lamborghini is worth the price of admission. Too bad it is so far into the movie that it is too late to leave.

But here’s the thing: you have Leonardo de Caprio, a minor part by Matthew Mconnaughey (very strange role and even ‘sings’ – raps – one of the songs, ‘Money Chant.’ But was it to show the evil and excesses of Wall Street? Frankly, no, it glorified them.

TB has mentioned his discussion with Michael Lewis before. Lewis wrote Liars Poker as an ex-Salomon bond salesman (stock salesmen were the lowest tier at Solly, especially the Dallas office). He told TB he wrote it to try to get college students to think about careers that did some good…engineering, etc. He was giving a speech at OhioState and then in the Q and A the first question was this: “How did you get your job at Salomon?”

He threw in the towel it was hopeless.

Back to Wolf…how many people saw it that were disgusted? How many felt revulsion for Jordan Belfort? How many envy? Sex, drugs, and rock and roll was the game from the 60’s on…especially on Wall Street, but it was muted and undercover at the big Wall Street firms. Remember Bonfire of the Vanities? How tame that was…Sherman McCoy just had a mistress! But after becoming a convicted felon he became an idol…whereas he thought he would be a pariah. Belfort skipped that step…and there is no doubt in TB’s mind that if he showed up on career day at any college, there would be a line at his booth.

Reportedly he paid over $110 million in fines, but he then wrote the book, and a sequel, and now has movie rights. Of course, he has seen the light…sober for more than ten years, or so he says anyway…but what about the victims? How much of their purloined funds did they recover? He spent three years at a ‘Club Fed’ with tennis courts…swell!

Can’t wait for Bernie Madoff’s book which he would write about the greed of those who are trying to recover their lost retirement funds? He now believes that he and his family are victims and mourns the loss of his son who committed suicide. If they had let him keep going none of this would ever have happened…right? Damned SEC!   

By the way, the movie fails to make the distinction between a Wall Street firm and a ‘boiler room’ operation…he never had credibility…no ‘pink sheet’ trading ‘penny broker’ ever has! Well…mostly…last night on Frontline: To Catch a Trader, they made mention of Gruntal, a firm where the rule was: there are no rules!

How about the last $2.6 billion slap on the wrist for JPMorganChase, the once respected bank headed by the once respected ‘wunderkind’, Jamie Dimon? Why? For not doing due diligence in investing client money with ….Bernie Madoff! It was about those big finders fees…like the hedge funds that had 100% of their clients money with him and were earning 2% +20…and that didn’t include the kickbacks from Bernie!

How many lost suits…without admitting guilt…can one bank have? They run the gauntlet of crimes from ripping of municipalities, to breaches of contract, to Madoff. Ethics start at the top…if the ‘perps’ were punished by Dimon, there would be no incentive to be a liar and a cheat. Who does he think he is? Eric Holder?

There is a growing school of thought that another financial crisis is on the way and this one will be too big for the taxpayers to absorb. One has to look no further than JPM to see who the cause will be. While the U.S. finds loopholes in the voluminous Dodd-Frank ‘reform’ act, Europe is shoring up their banks…finally. Damn, we are a stupid nation!

Ending on a bright note: it seems that even Newt Gingrich believes there is a ‘wealth gap’ problem…of course he doesn’t see it necessary to eliminate the ‘carried interest’ provision which applies a mere 15% tax on hedge fund operators, and why Mitt Romney has $100 million in HIS 401(k). This, on the 50th anniversary of LBJ’s ‘war on poverty’ – that program worked up until the 1980’s but then came Reaganomics and it has been downhill for middle class and below since then. But finally, perhaps in a Machiavellian way, the GOP is coming to the conclusion that ‘Houston, we have a problem.’ This is not in the spirit of largesse…it is survival of the fittest…and the status quo! This from the party that has driven a democracy towards a ‘duopoly.’ Are they serious? Not when the House Speaker John Boehner chimes in that he would like to have extended unemployment benefits but only with $7 billion in spending cuts – Grinch!!! Not to be confused with ‘Gingrich’ hmmm hominym? Is this what you want?  

Beautiful sunrise on LakeMinnetonka…but red sky in the morning? (sailor takes warning). Have a great day my friends! 

TB

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