10/10/11…occupy this!

This week’s economic calendar is fairly light. The highlight of the week will be September Retail Sales (Friday). We will also get August International Trade and the September Treasury Budget (Thursday), and September Import & Export Prices, early October Consumer Sentiment, and August Business Inventories (Friday). In addition, the Federal Reserve will release the minutes to the September 20 -21 FOMC meeting (Wednesday).
Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA

Bond market closed for Columbus Day.
Volume declined again to 4.76B shares from 4.94B shares on a down day breaking three straight strong sessions. NYSE stocks executed on the Big Board however slipped to 1.13B shares from 1.19B shares. Advance/Declines were negative: 2.5:1 vs. 5.5:1 vs +2.7:1 vs +1.5:1 va -10:1 vs -3.9:1 on NYSE and -3.1:1 vs. +3.3:1 vs +2.2:1 va +2.7:1 vs -10:1 vs -3.4:1 on Nasdaq. Breadth was similar: -4.4x vs. +16.3x vs +5.9x vs +5.7x vs -30x vs -16x on NYSE and 3.2x vs. +7.9x vs +7.6x vs +8.7x vs -10x vs -9.2x on Nasdaq! New 52 week highs however only rose 9 to 22, while new lows rose to 102 from 81, vs. two day’s ago’s amazing high of 2102. The ratio is -5:1. The VIX meanwhile dipped slightly and remains below the 40 day (36.79), closing almost to the 50 day (35.64), at 36.20 -0.07.

Here are the results: Dow -0.2% and +1.14% for the week vs +1.7% vs +1.2% vs +1.4% vs -2.4% vs -2.2%; Transports -1.4% and +4.1% vs. +2.2% vs +2.7% vs +4.4%! vs -3.6% vs -3.5%; S&P 500 -0.8% and +4.1% vs. +1.8% vs +2.3% vs -2.9% vs -2.5%; Nasdaq Composite -1.1% and +2.7% vs. +1.9% vs +2.3% vs +3.0% vs -2.9% vs -2.6%; 100 -0.7% and +3% vs. +1.6% vs +2.5% vs +2.1% vs -2.5% vs -2.7%; Russell 2000 -2.6% and +1.9% vs. +3.2%! vs +1.5% vs +6.5%!!! vs -5.4%!!! vs -2.8%%; NYSE Financials -2.8% and _0.2% vs. +3.2%! vs +1.4% vs +3.1% vs -4.4%! vs -3.6%. Note the volatile Russell 2000 was the worst performer along with financials again.

Etocks are up globally for a third straight session, due to the Merkel Sarkozy agreement to find a solution to the banking crisis in three weeks…think about it…they are smoking rope! But, it is something for the market to hang on: FTSE +1% vs. +0.8% vs +2% vs +1.9% vs -3.4%! vs -1.7% vs -1.3% vs -0.7% vs -0.2%; CAC 40 +1.1% vs. +0.9% vs +2.3% vs +2.9% vs -3.2% vs -2.3% vs -1.8% vs -0.1% vs +0.1%; DAX +0.5% vs. +.08% vs +1.5% vs +3.5% vs -4.1%! vs -2.8% vs -2.5% vs -0.4% vs +0.1%; Nikkei +2.0% vs. closed vs. +1% vs +1.7% vs -0.9% vs -1.1% vs -1.8% vs flat vs +1% vs +0.1%; Hang Seng flat vs. +3.1% vs +5.7%!!! vs closed -3.4%! vs -4.4%!!! vs -2.3% vs closed vs -0.7%; Korean KOSPI +0.4% vs. +2.9% vs +2.6% vs -2.3% vs -3.6% vs closed vs flat vs +2.7%!!!; Indian Sensex +2.8% vs closed vs -0.5% vs -1.8% vs -1.8% vs -1.5% vs +1.5% vs -0.5%. US futures have been building steam overnight on the accord: DOW +126; SPX +14; NDQ +27. Bonds closed Friday with 10 yr still above 2% at 2.08%, after a RECORD low 9/23 of 1.6855%; 30 yr above 3% at 3.02%..

Gold continued to hold above $1600, for a sixth day closing $1635.80 -$17.40), following 9/23’s low of $1534, lowest since 7/6!), and is now $1667.00 +$36.20. Last Monday’s low was nearly to the 200 day, now $1536.60, now critical support. The record high is $1923.70, a buying climax on 9/6. Crude was up slightly Friday ($82.98 +.39) and is safely above $80. Tuesday’s close was lowest since 9/23/10 as was low of $74.95! Overnight, it is $84.58 +$1.60, first support at $80.

This is TB’s 901st blog and rather than be tired and bored he continues to find more things to write about as he works on the book covering his forty years in investments.

…on Sunday, This Week With Christiana Ananpour, had a blogger who is one of the leaders of the Occupy Wall Street protestors. He was very clear and concise, not the hippies depicted by Ann Coulter and Eric Cantor. Both say this is not like the Tea Party. No, it is not, but it is going to grow and TB predicts will be the biggest protest since the 1964 Viet Nam protests which TB highlighted on Friday. Even George Will dismissed them saying they will guarantee an GOP victory in the 2012 presidential race – they will not! This is what TB began writing about and was chastised for that no one went to jail from Wall Street for the biggest financial debacle in history. In fact, they continue to prosper even though shareholders suffer. Look at Bof A which fell 6.1% on Friday and is at its lows, or Citi which fell 5.3%.,and lovable Goldamn is barely off it’s lows since 2009. Meanwhile JPM, the best of the litter is still way off yet Jamie Dimon continues to reap big bonuses despite shareholder suffering. The stock market was carried by rising corporate profits estimates but they have begun to slow this year. According to Bloomberg in Q1they grew 20%, Q2 19%, and for Q3 just 14% – smallest since Q4 2009! Furthermore, analysts are lowering estimates and many corporations are lowering guidance. Have the markets already noticed these trends? Are we at the new normal as El-Erian would say?

This cannot be labeled class warfare although that is what TB  believes it is. The wealthy continue to control the financial system. George Will mocked them and said they are disorganized and unlike the Tea Party…but remember that was funded by the now defrocked Koch Brothers. Do you think any candidate is going to support this group, since, unlike the Tea Party doesn’t have the blessing of Wall Street…from whom all big campaign contributions flow. TB repeats that the tea baggers have been duped, and are a bunch of middle class Americans that have been used as pawns by the wealthiest people in America. No, that is not the case but it wasn’t the case in 1964 either.

But this is totally wrong…Peggy Noonan gets it…and she was not talking off the top of her head like Will was. She sees potential to this group. But it won’t be good news for the Dems either but it will reinforce the feelings shown in continual polls that the GOP Congress is more responsible for our problems than Obama. So let them mock this movement…TB isn’t as sanguine and believes that it will grow and unlike the Tea Party which immediately won an election this will take time…money talks, but people are waking up.

Then on Face the Nation, Bob Shieffer had Newt Gingrich and Herman Cain. Look:

Gingrich blasted the Supreme Court…it seems so long as they rule they way he thinks they are OK but if not then Congress should subpoena them. Here is a man who claims to be the best historian on the Constitution in America and he doesn’t get it.

Then Cain said that the Wall Street protestors were merely jealous of those who have money…this is a disgrace to people of his race and to the sensibilities of the American people. What kind of man is this??? Be careful of him…be VERY careful! Uncle Tom is too good a name for him…way to kind.

Next, in trying to explain how his 9-9-9 plan is good and that economists aren’t doing the math said that the 9% won’t apply to used articles. So Shieffer asked him how many cars Detroit will sell with a double sales tax. Cain said yes but as soon as the supply of used cars is exhausted they will buy new ones…huh? Oh it gets better…he also told Shieffer…and TB has been waiting for this one…that it would apply to food and prescription drugs…yet not be regressive. Also, Medicare would be paying the additional 9% tax too! Then he said, as if it was a simple matter, we just shelve the income tax, and use his 9-9-9 instead. Hello, Herman…you may have been CEO  of a fried chicken concern but you know nothing. Do you honestly think an army of CPA’s, tax lawyers, and tax preparers like H&R Block will just let this happen? Get real…they have powerful lobbyists too. Lastly, Cain mocked the protestors as not understanding that Wall Street is the heart of economic growth…really? If you take out the financial sector (including real estate), growth, despite two massive Bush tax cuts was nothing…nothing…and the growth supplied by Wall Street was mirrors and we are now paying dearly for it along with the rest of the world.

We are one sick country being controlled by  a few sick wealthy people who don’t get it that their money will be worthless if the system implodes. Worse, we have politicians in the form of Cantor, Gingrich, Cain and others who are seriously damaging our country, if not outright destroying it.

How can Cantor mock this group when embracing the Tea Party’s make no compromises, and in fact hold the country and its hurting citizens hostage. Remember it was a well-respected GOP staffer that resigned in disgust and blew the whistle, saying that beginning right after the 2010 elections they were going to create a crisis…yes, we had a problem, but one we have wasted nearly a year in solving, but it was not of crisis proportions. Furthermore, their refusal to take even $1 in tax increases for $10 in tax cuts is irrational and the mark of ideologues. We do not need ideologues, we need problem solvers. Unfortunately, we have no real leaders, so this is what we are left with.

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TB will be traveling this week but will try to write when possible



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