5/13/11…Friday XIII part???

Bloomberg Quote of the Day: “A door is what a dog is perpetually on the wrong side of.” – Ogden Nash

Bloomberg Top Stories:

*U.S. Consumer Prices Increased 0.4% in April on Gains in Fuel, Food Costs

*Euro Strengthens as Growth Beast Forecasts; Commodities, Most Stocks Gain

*Debt May Exceed Size of Economies This Year For Greece, Portugal, Ireland

*Papandreou Urges Europe to Sell Common Bond to Tackle Region’s Debt Crisis

*Investors See Stocks Retreating as Yields Rise With QE2 End in Global Poll

*Japan’s Most Important Banker Shirakawa Sees Only Bubbles in Extra Easing

*Rising Rates Stoke Europe Asset-Backed Bonds as Sales Soar – a good thing?

*Buffett’s ‘All-In’ Railroad Wager Pays Off With $3.25 Billion in Dividends

(AH good for him but not to give to investors? TB owned BNI and loved div!)

*Banks Push U.S. Agency Not to Air ‘Dirty Laundry’ of Consumer Complaints

(Typical of people less respected than used car salesmen! See bank stocks!)

*AIG Fights Derivatives-Unit Bonus Disclosure in Sex-Discrimination Lawsuit

*Pfizer Sets Aside $772 Million, Settles One-Third of Pending Prempro Case

*Beverly Hills Apartments Lure Wealthy Investors Seeking Trophy Buildings

*Hedge Funds Fail to Flee London as Swiss Town Reveals Industry Wonder-Bust

*Pakistan Bombs Kill 80 as Taliban Vows to attack U.S. Over Bin Laden Death

*Obama Viewed Stronger Against Terrorism Than Bush in Global Investor Poll

Thursday’s volume was 949 million shares on an up day that started to look like another down one (Citi had 60M, 600M pre-split). Advance/Declines were +1.8x vs -5x. Breadth on the Nasdaq was lower at +1.3x vs -3+x. New 52 week highs rose to 297 from 228, for one day it was almost back the old range of 500-600, while new lows rose to 96 from 71 – watch closely. Compare the indices for last three days: Dow +0.5% vs -1% vs +0.6%, Transports -0.1% v -1.3% vs +1.1%, S&P 500 +0.5% vs -1.1% vs +0.8%, Nasdaq Composite +0.6% vs -0.9% vs +1% and 100 +0.6% vs -0.8% vs +0.9%, while the Russell 2000 was up just 0.8% vs -1.8% vs +1.6% vs 1.1% vs +0.5% vs -0.4% vs -1.3%…now down  1.5% last nine sessions and -2.7% from the rally high – the glory days are past.  

The Dollar held above 75 for a third day and after taking the market down, the ‘wiseguys’ took it back again causing a world of hurt for the shorts and those who ventured back into bonds, and is now 75.08 -.11. Since April 14th the long bond had been in a range of 4.47% to 4.36% broke below it for a few sessions then back up to 4.35% and back to 4.30%, but is now back to 4.33%. Meanwhile, the 10 year note continues below the old range (3.41% to 3.29%), and after trading up to 3.22% is now 3.19% again! For an eighth straight session T-Bills out to 3 months are effectively at ZERO percent. Gold peaked with a record high on 5/2 then immediately tumbled then back below $1500 but then rallied again yesterday and is now $1505.90 -.80. Support is $1462.50 hit last Thursday, just below the 40 day m/a! Crude, which has been weak ever since setting that rally high of $114.14, also on 5/2, had been up for three sessions after plunging to $94.63 on 5/6, just four days after the high! Then it rallied for two days before the key reversal Wednesday (higher high, lower low, close below prior session low), just when it looked like it might get back to the 40/50 day (107/106 area), falling to $97.50, 8 cents above Monday’s low. Overnight it is $96.36 +.39.

Global equity markets mixed: FTSE +0.6%% vs -1%; CAC 40 +0.5% vs -1.2%; DAX +0.1% vs -1.3%; Nikkei +0.7% vs -1.5%; Hang Seng +0.9% vs -0.9%; Korean Kospi -0.1% vs -2%!!!; Indian Sensex +1.1% vs -1.3%. U.S. Futures dead in the water: Dow +4; SPX +0.80; NDQ -2.25

…no time to be superstitious but the word for the day boys and girls is TRANSPARENCY…or more accurately a total lack of it and disgusting tactics by AIG and the banks to hide their true condition. This is what we get for bailing them out and letting the managements continue. This is what happens when Wall Street dictates regulatory reform to all to willing legislators with their greedy fat palms held out an up.

The success is largely a result of setting up Trojan horses to deflect the public’s attention…such as the creation of the teabaggers and rampant concern about the budget deficit by the GOP which created it in the first place through the Bush tax cuts ($2 trillion to the wealthiest Americans), and then two wars, one of which –Iraq – was unnecessary and likely upset the balance of power in the middle east by ridding Iran of its archrival. Well done…or did Dubya say “mission accomplished.” Despite this a global poll now shows that investors not only rebuff the GOP with 2:1 saying the U.S. must raise taxes but the unthinkable: they have more confidence in Obama than Bush in the war on terrorism. Why is it correct and necessary to put the burden of budget cuts entirely on the bottom 90% who received little benefit from the tax cuts (how about the dividend tax cut when virtually all of the stocks other than the wealthiest are held in IRA’s and will be taxed as ordinary income when withdrawn? You have Kudlow to thank for that one!), while refusing to even restore the old tax rates, eliminate the oil company subsidy or raise any other taxes? TB just learned that alcohol taxes are now labeled fees…see you can raise a fee but not a tax…talk about a lack of transparency…and who is affected by that most?

If you haven’t been watching the financial sector is in a world of hurt. Citi failed at its $46 resistance on 5/6, broke the 40/50 and yesterday the 200 day moving average after gapping down to s low of $41.62 yesterday before rallying back to $42.42 and is now -9.5% from the 4/28 high; BofA broke down thru the 200 day way back on 4/15 and has been going sideways ever since; Wells Fargo, although a much better run bank did similar to BofA but continues to slide. Ah, but Goldamn, with the aid of the highly paid employees who are effectively shorting it (a company that lost money trading only one day last quarter!), gapped down THROUGH the 200 day way back on 4/14 and has been sliding ever since, gapped down yesterday after Bove said they will most likely be prosecuted…isn’t that nice? The shareholders get screwed while the employees make money off the shorts…where the hell is the SEC on this??? Yesterday’s low was $140.66, lowest since 9/2/10, and a decline of 20% from the 1/18/11 high!!! Meanwhile, Jim Cramer, a former employee continues to brag and tout the stock…you rock, Jim!

So this is what a lack of transparency and effective regulation has wrought…Ayn Rand…you have no understanding of greed! Nor you, Alan!

Pardon TB’s negative attitude but in forty years in this whacky business he has never seen market action that rivaled the last three days…and if you can explain it you are a much better person than he!

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

Yesterday’s question on how much faith you have in the fairness of markets, although prescient as it turned out, produced only one comment from a reader, one in TB’s camp. But if you are willing to take what Goldman, Citi, and JPMorgan – and now AIG – dish out to you, then you deserve the value of your IRA/401(k). If you don’t speak up, who will?

Hope you all have a wonderful, FUN weekend!

TB

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