11/2/11…deceit and contempt

Bloomberg Top Stories:

 

*Greece Will Hold No Alternative to budget Cuts as EU Races to Save Pact (this does not preclude the people from throwing out the government as they have hundreds of times throughout history. Did you know that the Defense Secretary fired all the generals and replaced them – the last time there was a crisis they had a bloodless military coup…think, people! TB)

*U.S. Futures Rise, Commodities Climb Before Fed; European Stocks Fluctuate – Same old…

*U.S. Companies Add More-Than-Expected 110,000 Workers in October, ADP Says (correlation with Labor Dept on this is sketchy at best…and we need 400k! Wait for Friday to find out! TB)

*Corzine Steak Dinner to Traders Gave No Hint of MF Global’s ‘Doom’ – lies, lies, and more lies

*Papandreou’s Gamble Adds Hint of Arab Spring to Greek Crisis – just what we need!

*Debit-Fee ‘Flop’ Leaves U.S. Banks Looking for $8 Billion in Lost Revenue – short banks! TB

*Equity Correlation Bets Reach Record as Europe Eclipses Earnings – watch out!

*Saudi Top-Oil Premium Set to drop on Naphtha’s 3 year low – short refiners!

*Organ Trafficking Gangs Force Poor to Sell kidney’s for Desperate Israeli’s – like Mexico?

*WikiLeaks’ Assange Loses Appeal on Extradition to Sweden Over Rape Charges
Volume surged to 5.65B shares from 4.2B shares, so this is the biggest day since that whopping 6.63B shares in Thursday’s mega-rally. Back-to-back huge down days following mixed day where the worst performer was NYSE Financials for a THIRD session, followed by the Russell 2000. All indices are now below their 200 day m/a’s except the NDQ 100 which closed just 2 points above and is now major support (2296). Game, set, match!  – confirmed! NYSE stocks executed on the Big Board rose to 1.33B shares from 1.14B shares, highest since last Thursday’s 1.43B shares. We have now had six straight 1B+ share days, not seen since 10/7 when there were 13 straight 1B+ share days, all but one above 1.1B. Advance/Declines were worse than Monday: -5.9:1 vs -4.5:1 vs +1.1:1 vs +6.9:1 vs +4.1:1 vs -5:1 vs +5:1 vs +6.5:1 on NYSE and -5.3:1 vs -3.6:1 vs -1.3:1 vs +5.1:1 vs +2.7:1 vs -4:1 vs +5:1 vs +3.5:1 on Nasdaq. Breadth was about as bad as Monday: -13.8x!!! vs -15x!!! vs -1.2x vs +17.2x!!! vs +3.7x vs -9x!!! vs +6.5x vs +5x on NYSE and -11.1x!!! vs -7.5x! vs +1.1x vs +6.8x! vs +1.5x vs -5x vs +1.5x vs +4x on Nasdaq! New 52 week highs were more than halved for a third time to 27 from 64, while new lows more than doubled to 93 from 42. The ratio turned NEGATIVE breaking the seven straight positive sessions buy -3.4x!!! vs +1.5x vs +3x vs +9x.  VIX screamed for a second day to 34.77 +4.81– a huge gap up on the open for a second day and the close was just above the 40/50 day convergence (34.71) while the high was a huge 37.53!

Here are the results for the past six days. Dow  -2.5% vs -2.3% vs +0.2% vs +2.9% vs +1.4% vs -1.7%; Transports -2.6% vs -2.4% vs -03% vs +4.5% +0.3% vs -2.2%; S&P 500 -2.8% vs -2.5% vs flat vs +3.4% vs +1.1% vs -2%; Nasdaq Composite -2.9% vs -2.5% vs -0.1% vs +3.3% vs +0.5% vs -2.3%; Nasdaq 100 -2.6% vs -1.9% vs +0.1% vs +2.8% vs -0.1% vs -2%; Russell 2000 -3.7%!!! vs -2.1% vs -0.6% vs +5.3%!!! vs +1.9% vs -2.8%; NYSE Financials -4.5%!!! vs -3.9% vs -0.6% vs +6.6%!!! vs +1.6% vs -2.7%!!!. The highlighted indices tell the story. Look at the banks BAC -6.3%; C -7.7%; JPM -5.9%; WFC -4.4%; GS -5.5%; MS -8%!!!; GE -4.1% and F -5.1% were volume leaders along with BAC and C. Note Ford is off 12.5% since 10/24!

European stock markets tentatively strognger but not even a dead cat bounce…Asia mixed FTSE +0.2% vs -3%!!! vs -1.3%! vs -0.3% vs +2.5%; CAC 40 +1.1% vs -4.4%!!! vs -2.1%!! va -0.4% vs +4.8%; DAX +1.2% vs -5.3% vs -1.8% vs flat vs +4.3%; Nikkei -2.2%!!! vs-1.7% vs -0.7% vs +1.4% vs +2%; Hang Seng +2% vs -2.5% vs -1.8% vs +1.7% vs +3.3%; Korean KOSPI -0.6% vs flat vs -1.1% vs +0.4% vs +1.5%; Indian Sensex -0.1% vs -1.3% vs -0.6% vs +0.1% vs closed. U.S. stock futures: DOW +70 vs -194; SPX +9 vs -29; NDQ +15 vs -46!!! Bonds lower after two straight up day – Monday’s rally was HUGE!!, Tuesdays was one of the biggest TB can ever recall, Wednesday’s was even stronger, weaker overnight: 10 yr closed 1.99% +1+1/8, off 9/16 to 2.05% overnight but still up 3 points last five sessions! RECORD low 9/23 of 1.6855%; 30 yr 3.09% vs 2.99% -2 points but still up 7-1/8 points in five sessions! It was up EIGHT points at the high!; Long TIP 0.79% -2-1/8 but still up 8-1/4 points over last five sessions! Another record low yield!!! The 5 yr TIP yields MINUS 1.04%!, 10 yr ZERO. Libor  0.43% 3mo, and 0.62% 6 mo. Bills still yield zero percent out to six months where it is 0.04%. 

Gold reversing again oveernight – strange as it is running counter to crisis du jour. It fell $13.40 yesterday to $1711.80 and is off $35 in two sessions. Now $1733.70 +$21.80!  9/26’s low was $1534, lowest since 7/6, now critical support). The record high is $1923.70, a buying climax on 9/6. Res/SUP is again $1707, the 40 day, then $1730, the 50 day….converging while 200 day continues to rise. Major support $1600! Crude up overnight after two straight down days closing at $92.19 -$1.00, and is now $93.50 +$1.31. Last Tuesday WAS a peak! MAJOR resistance is $94.78, the 200 day…missed on last Tuesday’s rally by 10 cents. Support is the convergence of the 40 and 50 day m/a’s at $86.05-19.

…TB is sick of the anti-OWS folks. Why? Because they are mad as hell and the government has ignored them. Listen to Steve Forbes buddy Christy Todd Whitman who opined on Bloomberg and really ticked TB off. She says while they are angry they are channeling it at the wrong people – wrong people? Wall Street did it…what sort of crazed fool loans 1105 on a house, encourages people to take it, does it without documentation and then says people should be more responsible??? TB will tell you…the same ones that shoved these dogs into pools and unloaded them to unsuspecting investors. You know about Goldman but now it seems Citgroup did one that even GS would have been proud of. Picked the mortgages, the worst they could find, sold them to their clients as sound, then bought credit default insurance on the entire deal!

Christy…what is wrong with you…have you forgotten how you issued pension obligation bonds to bail out the state pension fund then watched the entire thing go down the drain? That is the mess you left for…drum roll pleas…Jon Corzine…who now has presided over yet another debacle…don’t you get it? This wouldn’t be happening if we didn’t regulate them! Oh, TB is on a tear now…some Stanford prof was asked about MF (TB could give you two words – hyphenated, that could be what firms name was), comingling client funds which the auditors avoided saying only that no money is missing…they just lost it. When asked if any other firm had done this the guy was almost apologetic and said one but it was much smaller…see this one is bigger so that must make it ok! OK…sheesh! Better hope SIPC doesn’t run out of funds…oh well Uncle will lend it to them of course!

What was her big advice? Kids, vote in every election? Ms. Whitman…can you get it through your head that we have voted and what do we get? Nothing…that is what crony capitalism is: owned lock, stock, and barrel by the financial sector. What do you expect when Goldman was the biggest contributor to Obama’s campaign…and in the top ten for McCain? Covering the basis. Also, remember the GOP hatred for FNMA/FHLMC…that didn’t stop them from taking money from both agencies…a wink and a nod. Why do you think the House Financial Services  Committee needs 61 members? So everyone can get their fair share. Vote, Christy? Make the votes mean something…what a hypocrite!

TB got so bored seeing the stock market drop…very little in HIS clients accounts…so he turned on Bloomberg and was riveted at what he saw. First Tom Keene interviewed Mike Mayo, a former sell-side stock analyst who was fired by Deutsche for issuing a sell recommendation on Credit Suisse. CS complained and he was canned. Other sins a sell-side analyst can commit? Embarrassing management of a client on a conference call. Remember when Bethany McLean asked Jeff Skilling that embarrassing question and he practically stripped her of her clothes with his response. She however worked for Fortune and then brought down Enron since nobody else would. Mayo’s prediction? Bank revenues in 2012 will be the WORST since 1938 and earnings will evaporate. Bank on it as TB sees it. He says their profit margins are shrinking due to low interest rates and of course not wanting to lend so they are doing everything they can to pull a rabbit out of a hat…at the expense of depositors.

Then came a former institutional stock salesman named Devoe who is editor of a financial newsletter. He said that when negotiated commissions disappeared firms went from being neutral to supporting their product clients at the expense of both institutional and retail clients. That is when they began telling the analysts to make nice on the conference calls and in their reports. He also…just like TB has been telling you…so maybe now someone will listen…puts the blame for the crisis on brokerages morphing from partnerships to publicly traded companies so they can play more aggressively…with other people’s money…OPM is always the best, no?

OK, to be fair and equal like FOX…Abbey Joseph Cohen is very bullish on stocks…too bad Abbey cause they are about to get cheaper! Hey…wait a minute…didn’t you say that all the way down in 2000? Trick question…yes you did! Unequivocally! You go girl…and take GS with you!

The phenomenal rally in bonds following the huge selloff shows just how hard it is to be in the right sector…and worse to time it right…moves of this magnitude can destroy you. So much for the biggest rally since 1994…the Dow is now up just 0.7% ytd from up 5.5% just THREE sessions ago! Anyone who claims to have a model for this is an outright liar…or worse.

IF OWS doesn’t wake you up to the reality of the crony capitalism, just vote the way you have and be content with the future you have sown. Note that the banks will have $8 billion less by not charging debit card fees…they will do everything in their power to make it up…especially the big ones like BofA, Citi, and JPMorgan…that means more risk…do we want yet another blow-up? How could Jon Corzine bring down a primary U.S. government securities dealer in less than two years? You have to wonder…

. . .   – – –  . . .

Off to a meeting today with Sen. Al Franken’s aide on elder abuse by using the U.S. mails to fraudulently get them to purchase things they don’t want or need…you know those you have won $3 million you just have to send in you name to win. TB’s take is the postal service, so deep in the red has its inspectors turning their back on MAIL FRAUD if its first class…and it all is! Tb’s proof? When he saw some of these items on a relatives credit card he called them and without question they cancelled the charges…however they wouldn’t cancel prior charges. The best was ARP not to be confused with AARP…which is clearly what they intended. They charged him $19.95 a month…AARP is $19.95 a year…coincidence? TB thinks its fraud!

Have a great day. Enjoy the dead cat bounce while you can…

TB

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