4/8/11…is there an end to the madness?

Bloomberg Top Stories:

*Stocks Rise, U.S. Futures Climb; Oil Trades Above $111 as Gold Hits Record – been there, etc.

*Portugal Pressed to Make Deeper Cuts to Win $115 Billion in Emergency Aid

*Stress Tests Toughened as EU Lines Up 90 Banks to Face Capital Examination – oops!

*JPMorgan’s Dimon Gest 51% Raise to $23 Million With First Bonus since 2007 – oh yes…

*U.S. Corn Supply Shrinking as Meat, Ethanol Demand Send Crop Price Higher – flawed policies!

*Corporate Jets First Perks to Go for Executives in Leveraged Buyouts – see you didn’t need it!

*Sellers of Portfolios-To-Go May Become Wall Street’s Next Thundering Herd

*Obama Demands Budget Deal Today to Avert Government Shutdown as Talks Fail – Surprise!

*Libya Risks Somalia Like Chaos as Fighting Drags On, Russia’s Ivanov Says – more pirates???]

*Loser Alert! Rich People Are Rich For Good Reasons –interesting article, not what you think!

The major stock indices were all  down from0.1% tp 0.5% (Dow Transports), with advance/declines and breadth all negative by about 1.5x or more. Yesterday’s volume of  907 million shares, following 885 and 830 million, and in turn following Monday’s 770 million share day, was again only achieved in the final five minutes as at that time it stood at 734 million…and that was with another 580 million shares delivered by Citi. After breaking out to the old trading range yesterday the stock closed off one penny with a range of just 11 cents! Let’s look at the volume of the week, with and ex-Citi.

 

Thursday Wednesday Tuesday Monday 12 mo Ave Ave since 3/21

907M         885M          830M     770M       1127M            876M

568M        640M          409M     297M         571M            406M

339M         245M          421M     473M         554M            470M

Citi post 1:10 split volume:

56.8M        64.0M         40.9M    29.7M        57.1M           40.6M

Why the surge in Citi volume with nothing to show for it? Last chance for flash traders to make their money on penny trades. Remember they not only do not pay for these trades but are paid a rebate for helping the volume. Much easier to do with a $4.60 stock than a $46 stock! At any rate it is currently overstated volume by more than 400 million shares indicative of a lack of sellers…you saw them try to take it down yesterday on the Japanese quake and weak consumer credit (at the low Dow off 98)…got no traction…but it will come…when?

This time however, Volatility (VIX) ROSE to 17.11 +.21, not big but concerns were there.

Overnight, equities are strong…thank you Portuguese bailout…a good reason for a rally right? Oh, and so what if the ECB is going to conduct new stress tests on 90 banks…tougher tests! Especially when we didn’t even take it down on the fear factor!. FTSE and CAC40 +0.8%; DAX +0.6%; Nikkei +1.9%!!!; Hang Seng +0.5%; Korean Kospi +0.3%; Indian Sensex the only loser, -0.8%. U.S. Stock Futures up: DOW +38; SPX +5.70; NDQ +7.50. U.S. Bonds weaker, no surprise there, with the 10 year -3/8  to 3.59%, and the long bond 4.64% -7/16 .

Gold is up $11.40 to $1470.70, after setting another new record high of $1474.50 o/n! – Silver still at a 31-year high!; Crude is $111.36 +1.06 after setting a new rally high o/n of $111.90. Dollar at new cycle low of 75.08, lowest since 12/4/09!

…yesterday TB gave his friends quote “the market will continue to go up…until it doesn’t!” It looked like yesterday might be the day but it wasn’t. This despite Portugal, another quake in Japan, and a total failure of Congress to agree on anything…with just one day left to keep from shutting the government down. Teabaggers in control and not giving up. Smart…very smart…until they feel the public rath! Meanwhile Obama did the right thing using the bully pulpit to say he wouldn’t sign a one-week debt extension – one of the few things he has shown leadership on lately. Say what you will but as TB sees it a government shutdown will guarantee him re-election (heck Lincoln got re-elected in an unpopular civil war that began 150 years ago…so don’t rule Obama out. This is not to say TB approves but hey readers, you show TB one candidate in either party that is showing leadership qualities and you know about the devil you know theory. TB cannot think of one that has shown he/she could do a better job. TB said when Obama was running he should have named his advisors. Actually he did shortly before the election and then put in place Summers, Geithner and Emanuel, forgetting totally about Volcker. Oh, and then to add a second person from Illinois he put in Daly…right out of JPMorgan to replace Rahm from a great American ‘Boss Tweed’ heritage and representing a bank that has done reprehensible things to municipalities and helped drive commodities prices higher in 2008 and most likely now.

 

Ah yes, commodities prices. In case you didn’t notice we still have the excise tax on Brazilian ethanol…made from cane (efficient) as opposed to ours from corn (inefficient but keeps the farmers happy. Did you know that less than 10% of corn production goes for food purposes?…unless you count feeding hogs and cattle that ultimately get consumed. So those same farmers are getting squeezed too. Happily the wealthiest Americans don’t need to worry about this or any other inflation or health care costs, or education costs. There is a Bloomberg story out today about a study that shows that how rich you are depends on where you were born, if you were born of a wealthy family, and of course gender, that makes up 80% of it. The rest is up to you. Of course, this doesn’t mean you can’t become rich but that’s the way to play it.

TB has been taking flack from some readers for not being harsh on Warren Buffett. After reading articles of late…especially a CNBC interview of Michael Steinhardt by Becky Quick (who TB is sure is in love with the man), and Carl Quintanilla (a boyish looking guy who more than anything seems to want to be liked…not a good attribute for a reporter, perhaps that is why he is a junior anchor?). Steinhardt took him to task for praising one of the division heads that he was considering as his replacement. It seems the man left…was let go?…but you wouldn’t guess it by Warren’s praise. Seems he picked a company and invested in it and it did well…but only after HE had bought it for his own portfolio…disclosed?…at any rate not only did he get a fat goodbye check, but the Oracle’s praise. TB had a former colleague who was with American Funds do this with a small cap portfolio. He claimed that he did it because the stocks he bought were too small for the portfolio…then as they went up in value he bought them in the fund he managed…THAT folks, and what was done here is called FRONTRUNNING and is patently illegal! If the SEC turns its back on this it is business as usual! Disgusting. Oh, and TB’s friend, fined by the SEC, and fired. Of course, this didn’t stop him from being hired by a well-known San Francisco firm that didn’t have the highest of scruples. As an old math teacher told TB: cheaters never prosper their grades (paychecks) just look that way! TB has to stop writing now as he is feeling ill.

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

Donald Trump, aka The Donald, with the beautiful hair, was on Meredith Veira and both made fools of themselves. Trump for insisting that Obama was born in Nigeria and Veira for letting him get away with it…actually he steamrolled her with crap. TB is sick of this far right slander that has gone on for more than two years and has been disproved. But what is worse is that Congress doesn’t have the guts to make a statement disavowing these shameful lies and putting it to rest…that is what ideologues do…if it serves their purposes then the truth just gets in the way. That is why it too 72 pages of ‘could’ and should’ to camouflage flawed data on jobs and cost savings in the Path to Prosperity, which may lead us to the poorhouse. Look, TB is not against spending cuts, there is certainly enough waste in government, but as shown the other day it is the cuts they are proposing at a time when jobs are not being created. What kind of logic says that by laying off government workers more jobs will be created. By the way this was the same logic used by the wise men at the Federal Reserve in the 1930’s who said that as unemployment rises wages will decline and people will again be hired…it took WWII to accomplish that…anyone up for WWIII? After watching PBS’s The Civil War TB hopes that is not what it takes…plus his own experience in Viet Nam!

TB has a lot of stories from the Naked City but is going to put the pen down as the drama over the debt ceiling continues…yawn.

Have a wonderful weekend!

TB

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