1/24/11…all that glitters

…certainly isn’t gold and stocks are beginning to tarnish…will they lose 10-15% of their luster from here? Don’t count on anything from tomorrow’s SOTU speech which is all it is: a pep talk. Yesterday, they played tapes from president’s going back to Nixon with the following recurring themes: we must be energy dependent, we are the strongest country in the world, everything is great. Of those things and the perennial: I will go through every item in the budget and won’t pass it if there is waste. Of course, the president has no power over the budget unless his party is in control of the House and Senate and they are likeminded…still they have their earmarks etc. How many president’s have asked for a line item veto?…and all have been dissed!

George Will and others on This Week yesterday pointed to the fact that the president’s approval ratings do not move on SOTU. People realize what it is…nothing but blather and a photo op for members of Congress.

There is only one good thing that will come IF a majority of members choose to sit by someone from the other side of the aisle: those listening will have to think about what is said and whether it is good or bad for them rather than see stone faces on the side of the opposition…note TB did not say ‘loyal’ opposition…that is a thing of the past.

The most important choice in where to sit however is visibility like those who gravitate to the aisle so they can be seen shaking hands with numbero uno. But it will be interesting to see where the tea party members sit…TB would bet in a cluster and you will know their feelings in an instant!

Will quoted Supreme Court Justice Roberts as saying that members of the court – as well as the military – should not be present at what is obviously a political speech – apparently he and Alito may not attend…but TB questions the timing of their decision to do so and in the wake of the Giffords shooting makes the gesture even more questionable. He also correctly stated that president’s from Jefferson thru Wilson merely sent their comments to Congress…but not in our age of visual fluff. Face it nothing will get done…nothing will change…except we might see a pop up – or down – in the market on what is said…but nothing lasting.

Back to the title today…gold has become a manipulated commodity second only to crude…and others thanks to the creation of ETF’s are doing similar. Today we learned that the going price for a metals trader is $3 million…this for a guy who might make or lose for you many times that amount…and not because he is smart or stupid…because some hedge funds power the trade in one direction or the other. Get past the Fortune 500 and how many CEO’s make $3 million a year…or even $1 million? This is another glaring example of misplaced values in our economy and why does it happen? Because the guys doing the hiring are in it for short term gains and besides it is with other peoples money.

Banks…notably JPMorgan paying bonuses on earnings produced by reducing the loan loss reserves…without which they would still have had losses in the bad years…so we forget those and pay a big bonus on what you did last year…and we wonder why American students rank 14th in the world in math, English, and science…yet number one in self-confidence.

Think about that and let’s look at Friday’s market action. Yay! The Dow was UP (0.4%) AND this time the S&P (+0.2%) but what about the Nasdaq Composite and the Russell 2000 both down 0.6%, and the 100 -0.8% – their third straight day of losses! Dow Transports were also down -.7%, their third straight day! – Thursday they closed BELOW the 40 day and Friday’s low was just 6 points above the 50 day! Do you really believe this is just your average day?

Friday’s volume was 1.27B shares…beating Tuesday’s 1.23B day for highest since 12/17 – and remember we don’t like to see above average volume on a down day…even a partial down day WHEN: advance/declines were mixed…breadth negative exceptslighly positive on the NYSE but 2:1 negative on BOTH Nasdaq and Amex! New 52 week highs were still above 100 at 143 and new lows still weak at 34…but compare to the 400-600 new highs set daily during the rally///clearly a warning shot!

TB wishes to reiterate that the Irish elections, originally scheduled for November are now slated for March 11. So? Because two of the three parties are vowing to repudiate the debt guarantees on Irish bank debt because it is destroying their economy and being made to primarily British, French and even American ($8 billion) holders. IF this happens look for a repeat of the stock selloff on the two events of the Greek crisis…and remember: Greece is not an industrial nation – Ireland is!

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

Disgusting! Watching the talk shows Sunday was not a pretty picture. Kay Bailey Hutchinson, outgoing senator from Texas who the Tea Party hates, defended them and added that it would have been a tough fight but she would beat them…how much more conservative can you get than her?…well, the answer is she isn’t extreme enough as happened in other venues around the country in the last election. The GOP is terrified of the tea baggers.

But who are the tea baggers really? Don’t they stand for the right principles…reduce the debt, lower taxes, personal freedom of choice? Well, it seems no they don’t: because while they agree on those three things they do not agree on what should be cut!

If you listened to GOP majority leader Eric Cantor on Meet the Press you can see just what is wrong with the GOP…they want change but have no idea of what they want to cut…except taxes…and TB would be there is no commonality there on what to cut. As David Gregory has done with every Republican on the show since and during the elections he asked what they would cut…Cantor danced around and came up with nothing…until a clip of Harry Reid saying Social Security is not in trouble…at which point Cantor said that people 55 and over don’t have to worry because their benefits will not change…too bad if you are 50-55 and have lost your job and likely it will be your last one. That is the new improved GOP speaking.

Paul Ryan will give the rebuttal (?) to the SOTU speech Tuesday…watch to see if he gives you one specific…and get this…the half-crazed Michelle Bachmann…from TB’s new home state will give a second rebuttal. She who the GOP opposed like the other tea baggers that were over the top. This is the new improved GOP?

A year ago the debate was on for healthcare reform…then it passed as Obamacare…to remind you of Hillarycare which also was misrepresented to build opposition by special interest groups. Now over the course of the year while the GOP has pledged to overturn it, what have they come up with: nothing! Meanwhile they continue to have their own healthcare paid by the taxpayers…many of whom can’t afford their own healthcare.

TB is going to write his Representative and Senators saying if you wish to make a symbolic gesture why don’t you propose paying for your own insurance? – just like we do! A doctor told TB that their healthplan, which allowed experimental brain surgery on a dying Ted Kennedy would cost $5,000 a month! Yet, we are not even told what the cost of THEIR health care is…that, not Obama is what is wrong with America (by the way what is wrong with him is his choice of advisors…Summers, Geithner – both responsible for the financial crisis by getting rid of Glass-Steagall…and ending ‘dumb‘ regulations…now he has picked Bill Daley, son of a Boss Tweed type mayor…and where did he come from? JPMorgan!, also Jamie Rubin…yep, Bob’s son who served on Obama’s transition team, on leave from Citigroup).

Lastly, Gregory quoted those who have argued on the far right that Obama isn’t a U.S. citizen and asked Cantor to set the record straight…also that Obama’s mission is not to destroy America. He said that was not worthy of comment…even though he believes Obama is well-intentioned, but wrong. He would not dispel lies that have circulated for more than three years…and this man is the GOP leader in the House!

TB concludes…there are no leaders in either party…but Obama and McCain are as close as we come to them…and while an improvement over Cantor, Boehner, Pelosi, and Reid…it is a sad commentary and raises the question of whether we are deserving of this great country of ours.

Have a reflectful day…write your elected officials on THEIR healthcare.


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, January 24, 2011.



  1. Yarnman said

    TB-The Federal Employee Health Benefit Plan is explained by Wikipedia. The government picks up about 72%-75% of the premium; the employee pays the remainder. In 2010 the government’s share was $40B to cover 8 million persons (includes family members), which is about $5000 per person. –Yarnman

    • traderbill said

      thanks yarnman!

      • traderbill said

        Here is the FULL story…look at this:

        For their FULL family the most expensive plan Blue Cross/Blue Shield costs $1,126.47…of which the Congressmen pay just 356 69. or $4,279 a year. That is just 2.6% of their $165,200 salary! Now consider two things: first, could you get that kind of deal? Could you even get it for $2,000 a month?

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