7/21/11…the secret is follow-thru

Bloomberg Top Stories:

 

*Euro Leaders Start Crisis Talks as Juncker Saus Greek Default is Possible

*Euro Weakens as Leaders Meet in Brussels; S&P Index Futures Erase Decline

*German Drive to Save Euro May See Joint Bond Surrender as Crisis Spreads

*Baby Steps Leave EU Leaders Fumbling in Debt Crisis

*Nokia Reports First Quarterly Loss in 1-1/2 Years as Handset Sales Decline

*Morgan Stanley Second-Quarter Loss Beats Estimate as Trading Revenue Rises

*Consumers Use Credit Cards for Necessities as Inflation Cuts U.S. Income

*Murdoch’s Iron Grip on News Corp. Triggers ‘Generic Discount’ by Investors

*Why CSX CEO Ward Is Determined to Scuttle Obama High-Speed Passenger Rail

*Grand Bargain Returns to U.S. Debt Talks as negotiators Open Paths to Deal

*State Laws Crafted in Unison as KOCH Joins Exxon in ALEC’s Industry Agenda

 

Volume was much lower at 3.5B shares while Big Board volume tumbled to 796 million shares, lowest since 7/8. This adds credence to TB’s theory that Tuesday’s rally merely spelled R-E-L-I-E-F. Show TB a single day that ‘CRISIS’ has not appeared at least once in top stories! Meanwhile the VIX slid lower to close at 19.09 -.12. The 40, 50, and 200 day moving averages are all clustered at 18.17-18.52.

 

The Dow, S&P 500, and Dow Transports all declined 0.1% in listless trading. The two Nasdaq indices declined 0.4%, while the Russell 2000 was off 0.3%. New 52 week highs slipped to 167 from 179, while new lows were declined to 62 from 78. Advance/Declines however were mixed at +1.2:1 vs +4:1 on the NYSE but -1.5:1 vs +4:1 on Nasdaq, while Breadth was +1.5x vs +4x on NYSE but -1.4x vs +5x on Nasdaq.

? Bonds were modestly weaker following Tuesday’s huge rally.

 

Overnight global equities are slightly weaker following their big rally yesterday: UK’s FTSE -0.1% vs +1%; French CAC 40 flat vs +1.6%; German DAX flat vs +0.3%; Nikkei flat vs +1.2%; Hang Seng -0.1% vs +0.5%; Korean Kospi -0.5% vs +1.2%; Indian SENSEX -0.4% vs -0.8%. These markets have been trendless for days! U.S. Futures rallying modestly on earnings (?) after being down earlier in the session: DOW +22; SPX +3.30; NDQ +1.75. Gold is $1598.90 +$2.00 after hitting a new record high of $1610.70 Tuesday, while Crude is $98.04 -.36, the 50 day is support at $97.45. U.S. treasuries weaker: 10 year 2.96% -5/16; 30 year 4.28% -17/32.

 

…in any sport the secret is always follow thru…and that applies to market rallies or politicians promises. Yesterday TB said the global equity markets have been ‘blessed’ but it may well be that they are damned! Look at the top stories…not just today but everyday – they are filled with more angst than a soap opera. But who cares, right? So long as earnings are rising…or losses are coming in less than expected…what have we become?

 

Meanwhile, as we discuss debt ceilings and budget cuts, the game not only continues in Washington of private companies and their lobbies ‘writing’ legislation to ‘help’ those poor legislators to get it right: for them! How stupid can we be? We let the banks, led by Sandy Weill and henchman Bob Rubin destroy the safety net of Glass-Steagall and despite that proving to be a wrong move, reduced investigations by the Justice Department, instead letting the companies investigate themselves…surprisingly finding no wrong-doing. We failed to go after Pfizer since they are too big to fail…despite the fact that it was the drug company lobby that bribed Louisiana Senator Taussig to use their plan which of course included no Medicare purchases of prescription drugs. Hear! Hear!

 

The Koch brothers, the biggest polluters and safety violators in the country and the money behind the tea party are at it agan, aligning themselves with Exxon to write legislation for their industry. Face it, folks, corporate America OWNS the Congress of the United States.

 

Oh and about that tea party…deapite being opposed to earmarks, higher taxes, and demanding a balanced budget, many of them ran on deriding their Dem opponents as well as Republicans on pork spending…but a recent study shows that many of them have lately embraced the same programs they opposed…yet insisting they aren’t earmarks – see beltway business as usual but you, the taxpayer/voter have been duped once again. A teabagger who opposed dredging a port in South Carolina teamed up with Sen. Lindsey Graham to force the Corps of Engineers to dredge that same harbor…and Graham threatened to not approve any Obama appointments if it was not done…the Corps caved…so much for that cost savings. The point is that it is business as usual but worse…yet the rhetoric has it that these are the good guys.

 

A Bloomberg story today says that CSX is the only railroad opposed to Obama’s high speed rail proposal…the reason is that it could hurt their freight business…now TB is not in favor of this either as it is too costly but for railroads which have been heavily subsidized since the collapse of Penn Central to want more is just another case of corporate control run amok.

 

If you think the summer is hot…wait until the rhetoric really heats up for the 2012 elections…and don’t think either party is your friend…because they aren’t. Will the tea party become just another upstart after the elections? TB is betting they will as the results of their harangues become more evident for what they are.

 

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

 

The heat wave has broken in Minnesota, the budget has been signed and now we just have the damage done to contend with. The borrowing from education and tobacco trust funds to balance the budget which a U of M financial analysis professor says will create an even worse problem in two years when it comes up again…and where will they borrow this time? Meanwhile, state workers are going back to work today…and not happily as they will not be compensated for the lost time…although the legislators continued to be paid! Parks can’t reopen yet due to vandalism and even the lawns at the Capitol have not been mowed for three weeks. The numbers crunchers are busy trying to assess the economic loss in the longest state shutdown on record…pity the poor businesses, that have also been damaged…through legislative stupidity…and for what? To sound big but kick the can once again.

 

Have a nice day!

 

TB

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