10/17/11…the joy of victory…

This week’s economic calendar is relatively heavy on manufacturing sector indicators with the October Empire State Manufacturing Survey and September Industrial Production (Monday) and the October Philadelphia Fed Survey (Thursday). However, the highlights of the week will be the inflation data, the September PPI (Wednesday) and the September CPI (Thursday). We will also get September Housing Starts (Wednesday) and September Leading Indicators and September Existing Home Sales (Thursday). In addition to the economic indicators, the Federal Reserve will release its Beige Book (Wednesday) in preparation for the upcoming November 1 – 2 FOMC meeting. Courtesy of Steve Wood, Insight Economics, Walnut Creek, Ca.


Bloomberg Top Stories:

*Manufacturing in New York Region Shrinks More Than Economists Forecast

*Stocks Erase Gain, Euro Weakens as Germany Damps Expectations on Debt Plan – yawn!

*Citigroup Profit Rises 74%, Beats Analysts’ Estimates on Accounting Gain

*Central Banks Selling Most Treasuries Since 2007 Prove No Barrier to Rally

*Political Aides Getting Canada Data Day in Advance Hurts Market Confidence – duh!!! Come on!

*Apple Sells More Than 4 Million IPhone 4S Units in Debut Three-Day Weekend – trib to Jobs?

*Biggest G-20 Rate Cut Bets Erased on Global Market Rebound – especially Brazil

*Shipping Surge Leaves Equity Analysts Trailing on Rates – is it up or down? Down or up?

*Best Buy Sales at Risk as ‘Surgical Shoppers’ Lack Buying Impulse – let alone money!!!

*California Diminished by Tax Revolt of 1978 Shows How U.S. Invites Decline: meaning tax cuts!

*London Exchange Access Curbed as Wall Street Protests Spread Around the World
Volume slumped again to 3.64B shares from 3.94B shares on an up day that was predicated on the G-20 fixing the Euro crisis…it didn’t!. NYSE stocks executed on the Big Board dropped again to 847M shares from 898M shares, the lowest volume in a week with only ONE 1B share day. Advance/Declines were positive:+5:1 vs -1.5:1 vs +4:1 vs. +1.2:1 vs. +10.4:1 vs +5.5:1 vs +2.7:1 on NYSE and +3:1 va -1.1:1 vs +2.7:1 vs. +1.5:1 vs +4.9:1 vs +3.3:1 vs +2.2:1 on Nasdaq. Breadth was also positive: +6x vs  -1.9x vs +5.2x vs +1.6:1 vs +9.7x vs +16.3x vs +5.9x vs +5.7x vs -30x vs -16x on NYSE and +3.2x vs +2.1x vs +2.6x vs. +1.5x vs +7.6x vs. +7.9x vs +7.6x vs +8.7x vs -10x vs -9.2x on Nasdaq! New 52 week highs jumped to 55 from, 32 from 46, and while still puny surpassed new lows which were steady at 37 vs 38 from 46. The ratio turned positive for the second time in a week but barely and on weak numbers. Negative is where it has been for months! VIX dropped solidly to 28.24 -2.46, the lowest since 8/3! The 40 day (36.24) and 50 day (36.44) remain res. Plunged thru support at 30, now res. Support is now the 200 day, 22.92.

Here are the results for the week: Dow +1.5% vs -0.4% vs +0.9% vs. -0.2% vs +3.0%; Transports
+2.2% vs -0.6% vs +1.3% vs. +0.2% vs +3.9%; S&P 500 +1.7% vs -0.3% vs +1.0% vs. +0.1%
vs +3.4%; Nasdaq Composite +1.8% vs +0.6% vs  +0.8% vs +0.7% vs +3.5%; 100 +1.9% vs +0.9% vs +0.8% vs +0.7% vs +3.5%; Russell 2000 +2% vs -0.2% vs +1.7% vs. +0.6% vs +4.4%; NYSE Financials +1.2% vs -1.7% vs +2.5% vs -0.3% vs +4.7%.

European stocks are mixed following the G-20 which produced the rally Friday, Asia strong: FTSE +0.2% vs +1.1% vs -0.9% vs. +0.3% vs -0.7%; CAC 40 +0.1% vs +1.2% vs -1% vs. +1.4% vs -0.5%; DAX -0.1% vs +1% vs -1% vs.+1.2% vs -0.3%; Nikkei +1.5% vs -0.9% vs +1% vs. -0.4% vs +2%; Hang Seng +2% vs -1.4% vs +2.3% vs +1.0% vs +2.4%; Korean KOSPI +1.6% vs +0.7% vs. +0.8% vs. +0.8% vs +1.6%%; Indian Sensex -0.3% vs +1.2% vs. -0.4% vs. +2.6%
vs -0.1%. US futures slightly weaker: DOW -17; SPX -1.90; NDQ -8.25. Bonds attempting to rally following a bad week with the 10’s taking out 2% and 30’s 3%: 10 yr now 2.24% +3/32, off a RECORD low 9/23 of 1.6855%; 30 yr  3.25% -3/8; Long TIP still above 1%! 1.12% -1/8.

Gold continuing to rally overnight and is back to highest since 9/23. Friday it closed $1683.00 +$14.50), following 9/26’s low of $1534, lowest since 7/6!), and is now $1687.00 $4.00. 9/23’s low was nearly to the 200 day, $1536.60, now critical support. The record high is $1923.70, a buying climax on 9/6. Making a run at the highs? Res is at convergence of 40/50 day: $1750. Crude was also up Friday, closing at $86.80 +$2.57, and is up slightly overnight to $86.84 +.04. 10/4’s close was lowest since 9/23/10 as was low of $74.95! Major sup/res at $85, convergence of 40 and 50 day m/a’s

…and the agony of defeat. Did you seriously believe the G-20 could fix things? Not on your life! …in your life? The G-20 met…they discussed…they decided…and Germany quashed it!


Let’s see how U.S. Markets react today especially in the wake of the Empire State Survey which was abysmal.


Poor old George Will…the man has become a conservative ideologue and doesn’t even know it. Worse, he doesn’t get it! Last week he proclaimed that Occupy Wall Street was the best thing that ever happened to the GOP, likening it to the Viet Nam protests which culminated in the 1968 Democratic Convention in Chicago and from then on the GOP controlled the White House and Congress for 20 years. But George, this is not hippies and Viet Nam, this is a cross-section of America, the ‘silent majority’ that the GOP used to brag was on their side.


But this time the silent majority has been ignored by the GOP since 2000 in favor of the big spenders on Wall Street who back both sides to make sure THEY win! They also have the most powerful lobbyists who influence staffs and legislation…often writing it for them!


This silly group according to the GOP…and that is the nice comment…or thugs, or worse, has spread to cities like Salt Lake City…even Green Bay when TB was there! Green Bay? Now it has gone global to Rome, Paris, and London. Let them eat cake. Heck they don’t know what they want…there is no leadership. No? Listen, even the WalMart Women who refused to get involved say they are mad as hell at Wall Street and how Main Street has been ignored by both parties.


TB has warned of the wealth gap creating class warfare and if it is ever solidified by a strong leader, big changes will come…and not the ones we want because it will go to extremes. A viable third party? No! But the point of a third party is that every major reform has been created by one of the two parties adopting portions of their platform. The GOP is still dealing with trying to hold on the Right to Lifers and the Evangelicals. They are in the wrong era. Yet Cain said yesterday that he wants NO abortion for any reason…life threat to the mother? That is their decision – but if abortion is illegal who would perform it? Incest, rape? Tough luck!  But there is one thing missing in this GOP proposal as it always has been: you can force a woman to have a baby…you cannot make her care for it. This is what Planned Parenthood does, yet the GOP hates them as much as NPR and that is saying a lot!


We are now seeing the class warfare brought on by the largest wealth gap ever. A small group that controls over 80% of the wealth yet complains about paying 50% of the taxes…and some at rates that are laughable…15%…and effective 22% per the IRS!


The OWS was mocked for not having a common goal, unlike the Tea Party…but that is not true. The Tea Party THOUGHT they had a common goal but the ideologues they installed instead took it as a mandate (always a bad thing to do in America), seeing NO tax increases (even removing stupid subsidies and reversing ill-advised tax cuts which were the biggest cause of the deficit – followed by Dubya’s Medicare Part D!


So they created a crisis by misusing the debt to GDP. Why did that ratio surge? Because REVENUES and GDP plummeted! Not because of social security, food stamps, etc. Polls of teabaggers even show they were not in favor of not raising taxes – so long as spending was cut too. Instead the candidates…including Romney behaved like sheep refusing even $1 in tax increases for $10 in cuts…if that isn’t an ideologue TB doesn’t know what is.


Let’s hope that the jobs bill can be reshaped to pass…because if not we are not going into recession, we are going into DEEP recession…or worse. You decide!
. . .   – – –  . . .

Back home from a wonderful trip to all new places! Meanwhile the Packers won – go Pack go! – and the miserable Vikings embarrassed themselves by not even leading in the FIRST half this time. Crucified!


Weather is changing from Fall to …the W word? Temp down to the 40’s here but still nice…got some beautiful fall pics on the trip but colors are fading fast here.


Have a great week!




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