3/28/11…T+3 is here

This week’s economic calendar is very full and has several important indicators. The highlight of the week will be the March Employment Situation (Friday). We will also get February Personal Income & Outlays and February Pending Home Sales (Monday), the January Case-Shiller Home Price Index and March Consumer Confidence (Tuesday), the March ADP National Employment Report (Wednesday), the March Chicago Purchasing Managers Index and February Factory Orders (Thursday), and the March ISM Manufacturing Survey, February Construction Spending, and March Motor Vehicle Sales (Friday). All-in-all, a very busy week. Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA

Bloomberg Top Stories:

*Treasuries Drop on Economic Outlook; Stocks, Futures Fluctuate, Oil Falls

*Treasuries Snap Seven-Month Losing Streak as $100 Oil Drags on U.S. Growth

*Mortgage Bonds Lose as Volatility Forces Hedge Fund Sales

*Consumer Spending in U.S. Probably Increased as Labor Market Strengthened

*Goldman Making Money From Special Situation Seen at Risk With Volcker Rule

*Ireland Wants Bondholders to Share burden of Bank’s Losses, Minister Says – here it comes!

*Italy’s Debt-auctioning Immunity Resists Portuguese Contagion

*CEO’sTap Record $940 Billion Cash for Dividends as M&A at Post-Lehman High – still low!

*Qaddafi Has $7 Billion of Bullion to Fund War Against Rebels

*Kan Told to Decentralize Japan as Aide Says ‘Big One’ May Annihilate Tokyo

*Proximity Pays as General Dynamics, Lockheed Snare Washington Tech Dollars

*Spain is Building a ‘Firewall’ Against Contagion, Pimco’s Bosomworth Says

*Radiation Level Outside Damaged Japan Reactor May Cause Death Within Hours

*U.S. Navy Says Japan Radiation Can Be Cleaned Off Vessels With Soap, Water

*Libya Rebels Target Sirte With NATO Support as Jets Bob Qaddafi Hometown

Friday’s 823 million share day market the FOURTH consecutive 800 million share day and was the 3rd lowest volume of the year. Feb.14’s 817 million was the lowest. Only Monday’s 1B share day was above and it was 130 million shares below average. The average for the entire week was just 880 million shares! TB cannot recall any previous time that volume has been this low since the 1980’s. True, the NYSE isn’t what it used to be but even combining the other trading platforms it pales and is not a sign of strong retail investor demand…have individuals thrown in the towel on stocks? This is also the lowest average volume for four straight sessions since during the Christmas/New Years holidays (12/20 to 12/31 ranged from 467 million on 12/27 to 829 million on 12/20 for a nine day average of just 718 million shares or 400 million a day below average (1.13B)! Today is the T+3 final day of trading for the quarter for hedge funds and based on the low volume could prove interesting.

The Dow and other major indices rose about 0.5% while volatility (VIX) declined slightly again to 17.91 – a level that we should not be at given the global issues facing us, right?

Advance/Declines and Breadth ran positive 1.5 to near 2:1 and we had 355 new 52 week highs and just 29 new lows – scoffing at reality?

The big banks for the most part did little following the Fed’s surprise and ridiculous decision to allow them to pay dividends again…uh, not so fast BofA! But the results were mixed with JPMorgan, Morgan Stanley and Citi flat on the week (despite the silly 1:10 reverse split announcement to ‘fool’ institutional investors into thinking the stock is worth more than $10 a share and thus putting it back on their radar screens); GS fell about 1.2% on the week, while BofA having been rebuked on its dividend payment plan fell about 4% and was down every day of the week except Monday when it rose a penny.

The KBW Bank Stock Index rose 0.5% on Friday.

Overnight, global equities are mixed: Europe slightly positive, Asia slightly negative for the most part. Bonds are slightly weaker with the 10 year and long bond down 9/32 to 3.47% and 4.52% respectively. Gold is at $1414.40 -$13.20! Crude $104.04 -$1.37. Dollar doing slightly better with the Index at 76.33 +.18, Yen at 81.73. TB has stopped quoting Libor since the game has been effectively rigged by some of the banks to stifle competition…I’m shocked! Collusion?…in a capitalist society? What next???

TB’s Quote of the Day: “In just one day, Obama fired more cruise missiles than all the other Nobel Peace Prize recipients combined.” – a blogger, heard on NPR.

TB’s Poem of the Day:  Ireland was Ireland when England was a pup,

Ireland me Ireland, the land where I grew up,

I am an Irish Catholic, I always go to mass

If you do not like me Irish face,

You can kiss my Irish…hand!

…Tokyo…solved! Libya…solved! …well at least who cares what the outcome is as it will either be Al Qaida or the Muslim Brotherhood that is in control most likely. So what do we do? Did you ever wonder why Qaddafi (Khadaffi, etc.) has problems? It’s all in the PR…he can’t even get them to spell his name correctly, or is it that as whimsical (?) as he is he doesn’t even know or likes to change it? We, in America, just stop worrying about it…after all we live on an island so what can go wrong…oops, that would be Japan and it did! For the umpteenth time the Japanese are being asked to decentralize the government before the ‘big one’ comes…wait? TB thought this WAS the big one…certainly at 1,000 times bigger than they were told to expect anyway.

Can you imagine the Muslim radicals claiming if it weren’t for the oil no country would care? What about Egypt??? OK, bad example, but what about…uh…hmmm, perhaps they have a point. Yesterday, CNBC showed a map of Africa and the Middle East with the trouble spots in red…starting in the west with Tripoli…appropriately as that is where the first revolt occurred. It is a solid mass of red now from west to east (Iran), like a giant Maginot line. You can go to the website and get the latest news on each of the countries. Still U.S. stock volatility is dropping.

It didn’t take long…but longer than expected…for the new Irish government to warn bondholders of Irish banks that they are expected to share in the losses. How un-American! …not to mention unfair as the previous government…thrown out in the worst defeat since the Irish Constitution came into being…gave their word and in the process destroyed the finances of the government! Bring in Hank Paulson…he can fix it it…and Bernanke, and Geithner…in fact TB proposes a new form of Lend-Lease where they get all three PLUS Greenspan as a sort of exile for his sins. Repayment of course is just as it was expected in WWII…we want all that junk back when they are done with it…not! Erin go brah!

TB read a lot of ‘stuff’ over the weekend – all sent by readers…thank you!

On the Fed decision to allow banks to resume payment of dividends

Simon Johnson Dividends

On the bi-partisan attack on Elizabeth Warren

Simon Johnson Warren

On the bull market in stocks (a contrarian view by some well-known investors)

http://seekingalpha.com/article/259961-investment-legends-say-dollar-collapse-inevitable?source=email_the_macro_view=

On Libya, and why we should be careful what we wish for http://www.wnd.com/?pageId=278105

On the wealth gap

http://www.nytimes.com/2011/03/26/opinion/26herbert.html?nl=todaysheadlines&emc=tha212=

All are highly recommended…you decide!

Lastly, due to cotton prices rising so rapidly, although the contract now stands at $296, down from the $296.65 record high on March 9th, it now costs the government more than a dollar to make a greenback. cotton/dollarThis is a sure sign of inflation as just last year it cost more to make a penny than a penny! TB has long suggested stopping making pennies, but the GOP says this is a symbol of dollar strength…WTF??? TB would merely have merchants round up or down…mostly up right?…after all most stores have a penny pot for you to use if you need one. But…see, the GOP wants real cuts…NPR funding, eliminating collective bargaining…in other words a return to Reaganomics and supply side economics…the less tax the rich pay the wealthier we will all be…it’s the principle of trickle down…which when TB has felt it, is not pleasant.

Back to work!

TB

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