3/29/11…a bad case of gas

Bloomberg Quote of the Day: “I always find it more difficult to say the things I mean than the things I don’t.” – W. Somerset Maugham…and TB!

TB’s Quote of the Day: “Those who cannot learn from history are destined to repeat it.” – George Santayana…then we are doomed…doomed TB says!

Bloomberg Top Stories:

*Stocks Decline in Europe on Bank Capital, Japan Concerns; U.S. Futures Gain…HUH???TB

*Fed’s Bullard Says Fed May Decide on Tighter Monetary Policy Before View Clears

*Bullard Says $100 Billion May Be Cut From Asset Buying Amid Recovery

*Irish Plan for Bank Debt May Rely on Trichet Again…and again…and again…TB

*European Bank Funding Threatened by Basel III Rules Clash With Solvency II

*Japanese Oil Ports Still Open to World’s Biggest Operator of Supertankers

*BP Managers Said to Face U.S. Review for Manslaughter Charges on Oil Spill

*Cash-Paying Vultures Pick Bonds of U.S. Housing Market as Mortages Dry Up

*Argentine Debt Safer Than Ireland First Time Since January on GDP

*No One Cries for Argentina Embracing 25% Inflation as Fernandez Leads Boom

Monday’s 784 million share day marked the FIFTH consecutive  day of less than 900 million shares  and a new low for the year eclipsing Feb.14’s 817 million share day. Over the past five days the average has been an unbelievably low 836 million shares!  While some have scoffed at TB’s warning, yesterday was the last day for T+3 settlement in March and therefore the cutoff day for hedge funds since they rely on leverage. Consider: the market was up – as much as 50 points early in the session and remained in the black until 15 minutes before the close, although it began its swoon 25 minutes before the close plunging 45 minutes in that interval AND closing at the session low: 12197! This is the kind of trading that TB noticed on several prior T+3 quarterends going back to December 2008! THAT dive didn’t end until the 3/9/08 bottom! A friend suggested, by backtesting,  that you could then buy in again two days before the true quarterend. TB diagrees as the only relevant period for this is since December 2008 and there are too few observations (TB never noticed this before as we were in a bull market! Will history – recent history that is – repeat itself? Time will tell…it always does…in the meantime you are simply gambling while the guys with the big stake hold all the cards…think, don’t act hastily!

The Dow and ALL major indices declined by about one-quarter percent –except the Dow Transports which has become an almost contrarian indicator of late and closed up 0.4%??? Volatility (VIX), which had declined  to 17.91 –  lowest since 2/18 and nearly filling in a gap from that date – rose sharply through the 50 day moving average and closed at 19.44 just above the 40 day (19.34)! Yesterday TB warned that given the global issues facing us it should not be anywhere near that level…he was right!

Advance/Declines and Breadth ran negative 1 to 1.5:1 yet we had 230  new 52 week highs and 40 new lows – highs declining from 330 Monday and lows up from 29!

Goldamn had another ba day yesterday closing at $156.47! That is just 51 cents above the 200 day and you can expect it to decline again since a NYT article said that GS ‘partners’ are selling the stock – big time! They are circumventing Dodd-Frank by ‘hedging’ their restricted stock…isn’t that supposed to be insider information since the reason this stock is restricted is to allow clawbacks??? In other words, short the stock, then let them take it back from you the next time the firm needs a handout from Club Fed!

These guys make TB sick! Their greed is insatiable, but perhaps their hubris will bring them down…only individually one can help. Jim Cramer remains the one true believer!

Meanwhile BAC closed below the 200 day m/a for a second day. Citi closed down slightly and since these stocks were a fav of hedge funds…based on volume of course…this is a bad omen for the sector.

Overnight, global equities are off slightly, except India’s Sensex (+0.9%) and Korea’s KOSPI (+0.8%). Bonds are  weaker again on Fed concerns with the 10 year -5/16 and long bond -3/8 to 3.45% and 4.52% respectively. Gold is at $1417.50 -$3.80! Crude $103.37 -.60. Dollar continuing to slowly climb with the Index at 76.42 +.22, Yen weaker at 82.40. Let the games begin…oh? They already have???

…or gas prices. Hey how about the pick up in consumption? That has to be good right? On the surface yes, but where did the surprise come from? OIL! In other words it not only reduced spending on other goods it decreased disposable income…now, that’s a recovery to write home about!

Ah so who is responsible?  A friend and reader sent this story to TB. No one seems to take TB seriously but you better look at the stories indicating some of the intelligencia are finally getting it! Too bad they didn’t two years ago when TB started warning of these things. Learn people…your future depends on it. OIL PRICES ARE MANIPULATED and next to Wall Street are the sleaziest. They might be sleazier but WS is so good at distributing the pain to everyone…in spades!

Gas Prices

Speaking of responsible…or irresponsible as some of TB’s readers called those who lost their homes. Here is an article by Joe Nocera, who with Bethany McLean penned the book I talked of previously, All the Devils are Here. This one is about someone who did go to jail in the financial crisis.

http://www.nytimes.com/2011/03/26/business/26nocera.html?emc=eta1

This story was referenced in a link from another reader. Thanks, guys and gals for making TB’s life so much easier…although these stories make him ill!

Here is that story: Liar Loans

. . .  – – –   . . .    . . .  – – –  . . .

Can you conjugate the word Obama?

Obama

Obushma

Obomba

This is what happens when TB has too much idle time and a friend suggested that is what he is going to call him for going into Libya…and dammit it isn’t about the oil! …is it???

Loved that quote from a blog in the column yesterday so am going to repeat it: “In one day Obama fired more cruise missiles than any other Nobel Peace Prize recipient.” Hear! Hear!

But lest you want to mock the man, he finally stood on his hind legs last night – for the first time since his popularity gained after the Arizona shooting of Gabby Gifford and others. Since then everything has been “we are considering all of our options.”

Last night he sounded presidential and despite Fox’s Brit Hume who never likes anything to the left of Barry Goldwater, and Sean Hannity who probably believes Goldie was too liberal, there were some amazing converts. Bill O’Reilly lauded him for his stand, as did CNBC’s Larry Kudlow…an amazing juxtaposition! This left Hannity and Hume…the ‘H’ brothers? …out in ‘right’ field.

His speech was a surgical strike against both factions of the right: those who said we should go in alone and show who is boss…a strategy that got us into Afghanistan and Iraq alone (please…you call that a coalition? No, a coalition is like Gulf War I where Jim Baker spent days and weeks traveling to elicit support, unlike the Rumsfeld cowboys acting on Dubya’s desire to settle a score…remember ‘mission accomplished? It still isn’t! As for those who said stay out, it would have sent a signal to Iran that we would stand idly by. No it was a masterful speech…perhaps he will now have the gumption to continue in that vein…one can hope!

Kudlow had on presidential hopeful and former Minnesota governor Tim Pawlenti (who someone described as a nice guy but boring…boring is nice except in his case!). Tiny Tim II said that growth is the objective and Kudlow kept baiting him to adopt the lower taxes, trickle down approach. First, Pawlenti is no Ronald Reagan! Second, while we remain mired in the worst financial crisis in history, he wants less regulation…yes…that’s the ticket! Free market capitalism…a theory expressed by the neo-classical economists that Kudlow so admires such as founder Ludwig von Mises. Theirs is a masterful philosophy…and a truism…were it not for one immeasurable element that pervades every system from  capitalism to communism: human greed, and uncontrolled greed not only put us where we are today but will do so again, and sadly TB believes very soon…beware of Focault’s pendulum, it packs a mighty punch.

You owe it to yourself and your country to read the link today. They are not pleasant reading but TB feels vindicated by them despite objections from his friends to the right.

Have a reflective day!

TB

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