7/1/11…horrible quarter…not a bad year…thanks to past week!

Bloomberg Top Stories:

*Nothing Works in June as Stocks, Bonds, Commodities Drop on Slowdown Signs

(except for the past week which prevented a disaster! TB)

*Stocks Rise, Greek Notes Rally on EU Aid; Commodities Fall as China Slows

(These are two of the four major concerns of Bernanke…heed China! TB)

*Manufacturing From Asia to Europe Cools, Posing Dilemma as Prices Increase

*Manufacturing in U.S. Probably Cooled in June on Japan Supply Shortages

*Pandit’s Payout Climb Toward $200 Billion as Top Bailout Recipient Slips!!!

*Banks Should Disclose More Details About Pay, Bonus, Basel Committee Says

*Emerging-Market Stocks Poised to Surge on Greece Bailout – for how long???

*Transocean Adopts No-Apology Strategy in Pushing Blame on BP for Oil Spill

*Syrian Army Sends Tanks, Helicopters to Conduct Seeps Near Turkish Border

*Hot Weather Will Grip U.S. East, West on Holiday Weekend, Forecasters Say

*NBA Follows NFL in Locking Out Players After Failing to Produce Labor Deal

Volume dipped slightly to 3.8B shares while Big Board volume rose to 1.0B on index fund rebalancing for quarterend. 20 minutes prior to the close it stood at 600 million and 690M at the close the rest was orders on close…see what TB means about faux liquidity?

Dow rose 1.3%; Transports +1.3%; S&P 500 +1%, Nasdaq Composite +1.2%, 100 +1.3%, and Russell 2000 +0.9%. New 52week highs rose to 231 vs. just 54 new lows. Advance/Declines ran +2.8x on the NYSE and +6x!!! on Nasdaq, while Breadth was +2.8:1 on NYSE and +4.7:1 on Nasdaq. Don’t let Nasdaq volume fool you though as it was very heavy on sub $10 stocks many of which surged by 10% or more…get the picture?

…thanks to ‘the week that saved the quarter’ by rallying for five straight days…the Dow from 11875…the year to date numbers looks about where they were three months ago. But given the level of ‘optimism’ (not from TB), that should be a huge wake-up call, because so many bulls threw so much pabulum at keeping the rally alive.

But the fact remains that Bernanke has four major concerns: China (shown slowing today…as is manufacturing form Asia to Europe and likely the U.S); Greece (that problem for a remarkably meaningless country will continue to roil markets along with the other usual suspects); the debt ceiling (‘nuf said); unemployment. But is he the only thinker out there? Apparently so.

Here is the track record for the week, quarter and ytd for major indices…you decide:

INDEX             5 days      Quarter      YTD

DOW 30            +3.0%       +0.3%      +7.2%

Transports        +2.3%       +1.0%      +6.2%

Utilities         +2.4%       +4.3%      +7.0% – not surge!

S%P 500           +2.9%       -0.9%      +5.0%

Nasdaq Comp       +3.2%       -0.6%      +4.6%

Nasdaq 100        +3.1%       -0.8%      +4.8%

Russell 2000      +3.1%       -2.3%      +5.6%

KBW Banks         +3.3%       -7.8%       -7.5% – OUCH!!!

Oil Services      +5.3%       -9.5%       +9.4% – a change of fortune!

Note that the indices that SHOULD be leading are the worst performers yet this is billed as a growing economy…doesn’t look that way to TB!

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

So Goldamn has its squidlike tentacles involved in even more central banks and policy decisions…gosh they wouldn’t help their friends at their old firm would they? …or help themselves as Friedman who was Chairman of the New York Fed did, buying GS stock while aiding in the bailout setup. Got his hand slapped and had to step down…that’s it!

Then there is Greece…ah yes, Goldamn manipulated size of Greek debt thru swaps so they could issue more bonds…through them of course…and sold them to their own clients. There are no limits to their ingenuity or greed…right?

Ah, a special tribute to Vikram Pandit who despite the banks slipping of late, has amassed $200 million in bonuses…over the past quarter, despite a 1:10 reverse split that was supposed to improve liquidity, the stock is off 5.8%…who cares about the shareholders? BofA yesterday was the big decliner, falling 1.6% on 255 million shares. Over the past year the stock is off 21.8%, ytd -17.8%, and 17.8% for the quarter! Imagine! Meanwhile JPMorgan, run by wunderkind, Jamie Dimon is up 13.5% over the past year, -2.9% ytd, and -10.7% for the quarter…does this look like a banking revival? Definitely not. Remember: the only reason to own a bank stock is for the dividends…which are meager if anything. Even pseudo-industrial GE is off 5.2% for the quarter, but up 4.7% ytd…but at least up 34.7% over the past year…where to from here?

Lastly, despite their vows to cut the deficit, Boehner and Cantor were very vocal on talk shows that we must stay the course in Afghanistan…a decade after we went after one man, and finally got him after a diversion to Iraq. Both said too many billions have been spent and too many American lives lost to pull out now. Here are the cost estimates of the wars over the past decade according to Reuters when you include ramping up defense spending and social costs: Conservative $3.2 trillion; More inclusive $4.0 trillion. Think about that! As for total lives lost: 225,000 (Iraq 151k, Pakistan 39k, Afghanistan 34k). Do you believe it will be any better in five years when we pull out of Afghanistan…and how many hundreds of billions more will we have spent on an effort as futile as Viet Nam? Think about it and you decide, while we discuss sweeping budget cuts for our own citizens in a jobless economy.

Have a ‘firecracker Fourth’ – the weather is definitely assisting in that in most parts of the country.

TB

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