11/1/10…twenty questions

(While today’s column is lengthy, a third of it is from the poll discussed…sorry, TB)

Bloomberg Quote of the Day: “Success has ruined many a man.” – Benjamin Franklin, and lately some women too.TB

TB’s Quotes of the Day:

“On this day in history nothing of importance happened.” – anonymous, sounds like the stock market on Friday.” Remember Seinfeld? “It’s about nothing.”

“Not to decide is to decide.” – Harvey Cox (posted on TB’s desk)

…there were two quiz shows on TV every Sunday night, back in the early days of black and white…when Lucy showed off her new ‘set’ and the screen filled with snow to which she quipped “it’s the deer chewing on the cables on Mt. Wilson.” We’ve come a long way since then when after midnight and frequently during the day a test pattern would appear on the screen with an audible hum so you knew the set was still working. All the shows were performed live and that showed just how great comedians like Red Skelton were…what a ham!...or Groucho Marx’s often off-color quips.

The two shows however were What’s My Line? and Twenty Questions. In the first they had to guess the guests occupation, three wrongs and the guest won…$50 or something like that. The other had a guest that had done something newsworthy, or was a famous person (panelists were blindfolded for this one). So today, TB thought he would play a game of twenty questions gathered from a new poll (there are polls on everything these days) that Yahoo! is now running.

The significance is how the votes fell so try to answer the question before you see the results. It shows how nobody has a clue of what is wrong with the economy or how to fix it as some of the answers scored the exact opposite…or undecided. 75,000 votes are in.

  1. Is the U.S. economy headed for a double-dip or in a slow rocky recovery? This sums up what is wrong with the stock market: 46% said double dip, 54% rocky.

  2. Is the government doing enough to rein in Wall Street Excesses? 68:32 No!

  3. Does the grim U.S. employment rate trump the stimulus act’s other positive effects? 71/29 Yes! How come the government isn’t creating jobs? Huh, Obama?

  4. Given the economy’s mixed signals, is a second stimulus a good or bad idea? 3:1 bad idea! Now go back and read number 3? Are they on the same planet?

  5. Should more direct government pressure be put on big banks to increase lending? 60/40 NO! It is probably tighter regs that are causing them to go to Libor instead.

  6. Will new Wall Street regulations help prevent another financial meltdown? 3:1 NO! A lack of confidence here…been there, done that!

  7. Should the government do more to support the manufacturing sector as part of its efforts to strengthen the economic recovery? 3:1 YES Even if they outsource?

  8. Would you support raising the retirement age to help bring down the national debt? 70/30 NO! Consider that this is a younger group as it is on the web

  9. Can major new investments in the nation’s aged infrastructure help boost the economy over the long-term? 70/30 YES…but wait doesn’t that mean more government spending…see number 3 again!

  10. Should the government buoy the housing market, aiding current homeowners, or let prices fall so new buyers can jump in? 80/20 Let it fall!  This with unemployment at double digits?

  11. Which is mot important now: spending to keep the economy growing or cutting back government spending to bring the deficit under control? 77/23 say cut back! Now go back to 9!

  12. Should tax cuts only be extended for the middle class or should Bush tax cuts for wealthier Americans also remain in place? 53/47 extend both…dead heat!

  13. The president has ratcheted up his rhetoric and proposals on the economy. Art the moves too late to help save Democrats in the new midterm election? 3:1 Too late!

  14. Some are speculating Obama may pick a business leader to heat his economic team. Would such a change boost your confidence in the White House? 70/30 NO

  15. The new health care law is closing a Medicare gap in prescription drugs and protects kids with pre-existing conditions. With tangible benefits in hand, does the new law deserve a second look? 58/42 say they don’t want a second look

  16. The government is on the hook to grow the economy, but with the financial system saved (sic), do corporations also share a responsibility to boost hiring? 72/28 say yes…but are they? Aren’t they still outsourcing to cut bottom line expenses to offset a lack of top line growth? Is this sustainable?

  17. Are local businesses healing enough to start hiring more soon or will national economic policies still have to drive growth for now? 3:1 National…see 11???

  18. Are you optimistic that the job market will be well on its way to a normal (sic) unemployment rate within the next two years? 71/29 NO! See 1, 3, 4, 7, 9 etc.

  19. In light of the Wall Street meltdown should MBA programs rebalance their emphasis on business ethics in relation to profits and bottom lines? 82/18 yes!

  20. Do the ideas you’re hearing from your local candidates to bring bacdk lost jobs sound like real solutions or snake oil? 86/14 SNAKE OIL!

  21. Will increased investments in community colleges help American workers stay competitive in a global economy? 53/47 yes…education won’t help??? Hello?

  22. Given how contradictory opinions are on the deficit and spending priorities (do tell!), can the nation ever get its fiscal house in order? 53/47 NO! Have trouble making up your mind? Well…sometimes yes, and sometimes no…

  23. Should the U.S. risk a trade war to protect American jobs or is it not worth the economic pain caused by higher interest rates and a jump in consumer prices? 73/27 said risk a trade war!!! Ever hear of Smoot-Hawley? Guess not!

OK…cheated and snuck in three questions but the answers are revealing and should decrease optimism in stock market and the recovery. Meanwhile Barron’s roundtable shows overwhelming optimism in stocks…despite growth coming from cost-cutting? Why would TB want to join a club that would have him for a member?

Friday was as ‘nothing’ a day as you can get. Up or down minimally intraday then ended nearly flat. Volume was 1.04B shares yet there were 182 new 52 week highs however and 49 new lows…still can’t figure out how that is happening. On Wednesday, despite the market being down all day we managed 176 new 52 week highs! The same situation occurred a week ago Friday! How can you get that many new highs on a day that is down from the open thru the session??? Thursday we were up for only the first hour or so yet we had 278 new highs…149 of them on the NYSE! Now let’s compare advance/declines and breadth

10/29 10/28 10/27


NYSE              +1.7:1           +1.1:1            -1.9:1

Nasdaq                  +1.3:1           -1.4:1            -1.6:1

AMEX              +1.5:1               1:1           -1.7:1


NYSE              +1.2x            -1.1x            +1.1x

Nasdaq                  +1.2x            +1.1x       +2.0x

AMEX                +2.1x           -1.8x              -2.5x

TB won’t bore you again with volume figures except to say that yesterday’s was 1.0B shares…the range for the entire week, coming off last Friday’s 773 million share day which was the 2nd lowest of 2010, is just 966 million to 1.04M shares…nearly 200 million below average! That narrow a range has not been seen since the week of 9/10 when we put in the low for the year of 756 million shares…not something to be proud of!

Let’s put this puppy to bed with one last observation: ridiculously low Libor rates are again declining and that means either there is scant loan demand or the banks are becoming more cautious…TB believes it is safe to say there IS loan demand. Is this a sign of a strong economy? Next week we get the FOMC meeting followed by payrolls on Friday…will 600k or more souls miraculously get jobs? Does the recent decline in Weekly Jobless Claims mean fewer layoffs or does it mean as it does with Continuing Claims that benefits are exhausted…or those being laid off already used up theirs? Does dollar weakness translate to increased exports or just higher import costs and commodities prices (the danger of being the reserve currency of choice)?

. . . - - - . . . . . . - - - . . . (S.O.S.)

Jon Stewart and Stephen Colbert’s “March to Keep Fear Alive and to Restore Sanity” drew 200,000…that is more than the Obama AND the Glen Beck rallies combined. Dick Armey, bless his little heart said he watched it and it was entertaining…then went back to what he was doing. If there is any doubt that it was needed you only had to look at the demographics of the crowd. Politics are no fun anymore…no longer interesting…nobody says anything except that which promotes their point of view. If you listened to Sarah Palin yesterday on Fox…did TB have to add that?...you know this is no serious student of economics, politics, or history. She says the same old platitudes. The one TB loved the best is “everyone knows that when the government raises taxes revenues decline because people have less incentive to work.” She, like the GOP and other tea baggers don’t realize that restoring tax rates from temporary tax cuts is not raising taxes. She says there are plenty of things that can be cut from the budget so it will be unnecessary to raise taxes…yet she couldn’t identify one area other than to reduce the size of government…really? Last TB saw that will increase unemployment and yet the biggest criticism of Obama (other than being a Fabian socialist…haven’t heard that one since the days of Ronald Reagan who by the way she equated herself to with her reality show since he was an actor too), is that he HASN’T created jobs…hello Sarah…he has no control over the private sector. Oh, and what about helping those companies to hire…nobody mentions that when they do and those that are, do it through outsourcing! Then she said we have to get back to the principles of Art Laffer…the Laffer Curve…she doesn’t even look at the data and see that trickle down does not work! It was never meant to work…it was designed to cut the tax ‘burden’ on the wealthiest Americans…how come their incomes have risen exponentially, while inflation adjusted incomes for the rest of us have been decimated…almost literally! Sarah Palin, Glenn Beck and the others are opportunists. The Dems have only themselves to blame though because this ignorant country doesn’t have a clue about the difference between the ‘marginal’ and ‘effective’ tax rate. The richest do though and it is only the marginal rate…restoring tax rates and then adding to the rate above $250k means only the amount ABOVE that number, yet we make it sound like it is on the entire $250k…shame on the Dems for not pointing this out while the wealthly use this as a tool against us. Also as Robert Reich quipped: “show me an millionaire who pays the marginal rate and I will show you a dumb millionaire!” A joke? Ask Warren Buffett why his tax rate is less than his secretary’s? He’ll tell you!

Lastly, do you notice that Stewart and Colbert are always labeled comedians? What ever happened to the word satirist? It seems to be reserved for the extreme right-wing writers who spew forth false and misleading statements and when caught say it was just ‘satire.’

We will wake up Wednesday morning with a new…but not improved…Congress. Palin said they will not compromise on anything….gridlock when we are on the brink of a full-blown depression…that’s the ticket!

Yesterday, TB drove to Wisconsin…just an hour away, not a trek! Amazing crossing the state line you can tell you are in a different state…away from the bustle of the Twin Cities…Halloween is a big thing in the Midwest…because they know where things come from: the ground…also because they have four seasons unlike California which has at best two. All of us went with the kids trick-or-treating…it was great fun. See there is still some sanity out there, Jon. But then back in Minnesota we have loonies running for office and two candidates for governor that shouldn’t even be on the ballot…makes me long for the sanity of Caleeforneea, doesn’t it Meg?...Carly? Anyone?

TB did something he hasn’t for a long time…went to see two movies, Secretariat and Social Network.

Secretariat has an incredible cast…a great story, there was one error at least, possibly two but they were to pull you into the drama…HIGHLY RECOMMENDED!!!

Social Network was more of a commentary on what is coming out of Harvard including the illustrious Larry Summers (the actor had all of his ‘tells‘ down pat). The main point to TB is how all these brainy (or rich) kids think. They want it all…want it for themselves. The best comment was. Zuckerberg asked why people don’t like him. The legal assistant said, “Mark, you really aren’t an asshole…you just try so hard to be one.”  Recommended, but a downer unlike the horsey story!

One more column tomorrow then off to the west coast till December 15th. First to Seattle to see a recovering friend, then a wine-tasting trip along the Columbia River from Walla Walla to Portland. Then back to the bay area and will then resume the columns.


Trader Bill thinks it is clear to anyone reading these missives that they are merely commentaries...as he sees it...and do not necessarily reflect the views of anyone other than his own. Information is gathered from sources he has found reliable, but no guarantees of accuracy are implied. These are merely observations of events in the marketplace offering in an attempt to offer a non-mainstream viewpoint. Copyright TBD Capital LLC, November 1, 2010.


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