5/27/11…in memoriam

Bloomberg Quote of the Day: “Call no man foe, but never love a stranger.” – Stella Benson, from a poem ‘To the Unborn’ and part of the title of a Harold Robbins novel. tB

TB’s Quote of the Day: “Keep your friends close – your enemies closer – Arab proverb…or possibly Sun Tzu in The Art of War, said as Hold your friends close, your enemies closer, in The Godfather…whatever. TB

Between those two quotes lies a world of difference. TB

Bloomberg Top Stories:

*Stocks, Commodities Advance After G-8 Statement on Growth; Dollar Weakens

(Does that supersede a weak GDP number? TB doesn’t think so – politics!)

*Banks Said to Be Offered Choices in Proposed Accord on U.S. Foreclosures

*Consumer Spending in U.S. Climbs Less Than Estimated on Food, Fuel Prices

*Global Economic Rebound Weakens on Quake, Oil Price, European Debt Crisis

*Smallest Canadian Stocks May Lose Edge After Doubling Return of S&P/TSX 60

*Singapore’s Economy Set to Overtake Hong Kong’s in 2011

*Russia Says Qaddafi Has Lost Legitimacy to Govern, Joining Support of NATO

Thursday’s volume slipped from 963 million Wednesday thanks to AIG’s 225 million shares), to 862 million but that was with 200 million at the close which dramatically altered the 52 week high/lows: New highs were 163, then revised to 178 but the big story is new lows which surged from 89 at the close to a 137 final!. It was an up day, but only the Russell was impressive at +1.2% on top of a +1.3% gain Wednesday…still, selloff has been so bad that it remains below both 50 and 40 day m/a’s. BofA, the new Citi, had volume of 123M shares producing a meager 0.7% gain and is still off 3.8% last nine sessions. Advance/Declines were +2.4x, with some of that coming at the close. Breadth was +3x, but volume makes that iffy. Here are the indices over the past five sessions: Dow +0.1% vs +0.3% vs -0.2% vs -1.1% v -0.7%; Transports +0.2% vs +0.9% vs -0.6% vs -1.6% vs -0.6%; S&P 500 +0.4% vs +0.3% vs -0.1% vs -1.2% vs -0.8%; Nasdaq Comp +0.8% vs +0.6% vs -0.5% vs -1.6% vs -0.7%; 100 +0.7% vs +0.3% vs -0.6% vs -1.5% vs -0.8%; Russell 2000 +1.2% vs +1.3% vs -0.5% vs -1.8% vs -0.7%.   

The Dollar is trading with a 75 handle for a third session and is now 75.15 -.43. A weaker dollar has been good for stocks lately. Bonds are slipping but there will be light trading and an early 1pm EDT close: 30 yr 4.25% -7/16; 10 yr 3.08% -3/16. T-bills which traded at ZERO for ten straight sessions effectively remain at 0.05%. Gold is now $1526.50 +$2.80. 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 a key reversal ten days ago (higher high, lower low, close below prior session low). For a second day it is above par which is resistance/support, now $100.74 +.51.

Global equity markets rallying because the G-8 has a positive forecast…is that more important than data we are seeing??? FTSE +0.8% vs +0.4% vs -0.4% vs +0.6% vs -1.7%; CAC 40 +1.1% vs FLAT vs -0.4% vs +0.4% vs -2%; DAX +0.4% vs -0.4% vs-0.3% vs +0.9% vs -2%; Nikkei DOWN 0.4% vs +1.5%!!! vs -0.6% vs +0.2% vs -1.5%; Hang Seng +1% vs +0.7% vs +0.1% vs +0.1% vs -2.1%; Korean Kospi +0.4% vs +2.8%!!! vs -1.3% vs +0.3% vs -2.6% vs +0.8% vs  -1.9% vs +1.6% vs -0.1% vs -0.8% vs -0.1% vs -2%!!!; Indian Sensex +1.2% vs +1.1% vs -0.9% vs +0.1% vs -1.8% vs +1% vs +0.3% vs -0.3% vs -1.1% vs -1% vs +1.1% vs -1.3%. U.S. Futures slightly better: Dow +5; SPX +1.80; NDQ +3.50 – big yawn!!!

…most of us today think of Memorial Day as a three day weekend…that is because in the governments infinite wisdom (although it does improve productivity), it doesn’t need to be on May 31st. That means, hamburgers and hot dogs, the Indy 500, NASCAR…you know, fun things. A weekend not to think about the stock market.

But what about all those who made this day possible and did not get to enjoy the fruits of their sacrifice? This is particularly unsettling to TB having just read ‘Unbroken’, the story of a downed airman in WWII, who with his pilot spent a record 45 days adrift, was then captured by the Japanese more than 2,500 miles away, tortured, and much more. It was as if just when you thought it couldn’t get any worse, it did. But the true horror in his life was returning home. The nightmares, alcoholism, self-destruction that was worse than all that came before.

TB grew up near the VA in southern California and saw the wino’s hanging out and since no one understood post traumatic stress saw them as losers – as everyone did. Why didn’t they make something of their lives? It was troubling to read the book and feel the shame at how wrong he, and they, had been. War takes the best and then destroys them; Darwinism in reverse.

Tom Brokaw was absolutely correct to call the predecessors of the baby boomer’s the ‘greatest generation’ – although many boomers still think he was talking about them. As someone wrote: “it isn’t that the boomer’s are egocentric, it’s just that they think the world revolves around them.”

But the greatest generation in their zeal to improve our (boomer’s) lives, they created their greatest failure. They gave us everything we wanted…they wanted us to excel…they overlooked our flaws…our disdain for the government they had selflessly obeyed…and our lack of commitment so service. They tried to teach us how to save but the advent of credit cards allowed us to spend it before we had it, sometimes while they shook their heads sadly. We wanted it all and didn’t want to wait for it…but the cost of that is in the satisfaction of saving for something and then feeling proud when you got it. If it was a car that pride lasted five years or more…no need to buy a new one.

Contrast that to us…TB can honestly say he never owned a car that within three months he didn’t see one he would rather have…and if only he had saved the money that he wasted on ‘flipping’ cars.

We did a miserable job of teaching our kids about finance…and they their kids…allowances became ‘how much do you need?” Now we have volunteers going to schools to teach kids how to balance a checkbook, and understand compound interest.

We pay for testing to beat the tests so that we have no way of knowing how smart a kid is relatively…only that the ones who can afford the cram courses score highest and get into the best schools. Cheating is rife…papers are available over the internet, but as a teacher once told TB: cheaters never prosper, their grades just look that way.” Little consolation to him as he struggled with the binomial theorem and saw others openly cheating.

This brings us to Memorial Day. What would the founding fathers and the other persecuted souls who came to this country think of us and what they sacrificed for? What if we could speak to a fallen soldier and ask if he thought his sacrifice was worth it? What would he say? Would we feel shamed? Dunno, the answer lies within each of us.

We are not alone…Israel in an even shorter time has seen the same deterioration of values. So have other countries. What kind of people have we become and what legacy do we have for our children and grandchildren? Think about it.

Public service has become a joke…it is a way to wealth. It is about lying, deceit, and placing yourself above the people you serve. Since Bush I, we have had two presidents who did no military service, and one who received $1 million in flight training then didn’t live up to his terms of service. Where to from here? (This is not meant to make a statement other than what a change this is from the past.)

Look at the some people who want to be President, or recently dropped out:

  1. a real estate developer who you would not want to be on the other side of a deal with, who needs trophy wives to support his ego
  2. a former house speaker who has the audacity to say his affairs were because he worked to hard for America, but not to judge him on his past
  3. a woman who was a one-term mayor, elected governor but after getting the VP slot came back and said she didn’t want to be ‘lame duck’ – after just one year in office??? Now, one of her trusted aides is telling what she made him do…and she became the force behind the teaparty

Then we have on the other side of the aisle, John Edwards, a man we now know was a total fraud…about his wife…and now about to be prosecuted for his political dealings.

TB has no doubt that career politicians were not what the founding fathers wanted…in fact they designed the term structure to prevent this or at least keep them in touch with their constituents. Now they have incredible benefits and retirements and spend much of their time fund-raising. It is about time we do something about it it…don’t you think?

One final question: when and where did we lose our compassion for those more unfortunate than ourselves? Do we truly believe we succeeded by being the best, or were we just lucky? Most likely it is a combination and a big part of the luck was being born of the right parents. This is what sickens TB about the political ‘debate’ we are living in.

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

While writing this, two baby rabbits, a squirrel, two chipmunks, four mallard ducks, and two geese crossed between his window and the lake.

Nice way to start the day…have a fun but thoughtful weekend.




  1. Yarnman said

    TB–Although the parenting birds are looking for protein-rich insects for their hatchlings at this season, it’s still a good time to put up a bird feeder (that’s squirrel proof), if you haven’t already done so, to catch a look at some smaller birds. You’re lucky to to be on the Central migration flyway, and should have good birding in all seasons. If you aren’t into “birding”, get the Roger Tory Petersen guide to Eastern Birds. It’s still the best for casual birding because it points out “field marks” for easier identification, and the arrangement of the guide is better than the more “fashionable” Sibley guides of more recent vintage.–Yarnman

    • traderbill said

      Wow, Arny! You are a veritable storehouse of information!!! A good friend stayed with us last week and he is an avid birder and living here where they are much more interesting than N.California is exciting!!! Thanks, TB

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