11/15/11…contempt for voters!

TB Saiz: “What good is insider information if you don’t use it to advantage?” Ask your friendly congressman…and you have to use those friends in high places to get you into IPO’s! Why does Congress show so much contempt for the people who put them there?

 

Bloomberg Top Stories:

*Retail Sales in U.S. Rise More Than Estimated on Electronics, Auto Demand

*Stocks, Euro Fall as Spanish Yields, French Bond Risk Climb; Copper Drops

*Wholesale Prices in U.S. Drop 0.3% as Costs for Automobiles, Energy Fall

*New York Manufacturing Unexpectedly Expands as Shipments, Work Hours Rise

*Credit Rating Fees Rising Faster Than Inflation as Governments Fret Expenses

*Bank Loans Accelerate in U.S. as Fed’s Fisher Sees Growth – he does? Where? Not jobs!

*Fed Employees Serve Treasury in Assignments Deepening Crisis-Forged Ties – not good!

*Moynihan Says Economy Continues Expansion at Slow Pace as BofA Cuts Staff – oh joy!

*Hedge Funds Raise Bets on Oil Advance to Highest Since May

*China Wary of Choking on U.S. Dollar Driving Hong Kong Dim Sum Debt Sales – lol!

*Gingrich Said to Be Hired by Freddie Mac to Win Republican Allies on Hill

(as always, the GSE’s spread their money to BOTH Dems and GOP…friends in high places!)   


Volume dipped for the third consecutive day as we approach options expiry after a big rally: 3.15B shares from 3.4B shares. Hello Ms. Schapiro??? Where is your SEC on this and what are they doing about it??? NYSE stocks executed on the Big Board also tumbled for a third day to 710M shares from a way below average 762M shares – still at lowest since May 27th

(692M on the day before the Memorial Day weekend, a modest up day)! Once again, repeat after TB: DOWN big volume, UP average or less volume. Advance/Declines were solidly negative: -3:1 vs +6:1 vs +2.3:1 vs -9:1!!! vs on NYSE and -3:1 v +3.6:1 vs +1.7:1 vs -6.9:1! on Nasdaq. Breadth was similar: -5.5x vs +12.8x! vs +2x vs -60x!!! on NYSE and -3.6x bs +6x vs +1.6x vs -18x!!!! on Nasdaq. New 52 week highs ran 91 vs 96, while new lows rose nearly 50% to 95 from 68. The ratio is a slight negative.  VIX rose to 31.13 +1.09 back above 30 which is sup/res and still high lending credence to the ‘high frequency trading’ explanation.

Here are the results for the past four days: Dow -0.6% vs +2.2x vs by 9:1 vs -3.2% by 30:0; Transports -0.7% vs +2.8% vs +1.3% vs -3.8% by 19:1; S&P 500 -1%! vs +2% vs +0.9% vs -3.7% by 499:1!!!; Nasdaq Composite -0.8% vs +2% vs +0.1% vs -3.9% by 7:3; Nasdaq 100 -0.6% vs +1.9% vs -0.1%vs -3.6% by 99:1; Russell 2000 -1.6%! vs +2.6% vs +0.9%+3.9:1 vs -4.8% by 4.7:1; NYSE Financials -1.8% vs +2% vs +0.4% 2.3:1 vs -5.6% by 63.5:1!!! BAC -2.6%v s +3% vs -2.1%; C -3.2% vs +2.4% vs -0.7%; MS -2.7%.

 

Global stock markets weak: FTSE -1% vs -0.6% vs +1% vs +0.3% vs -1.6% ; CAC 40 -2% vs -1.3% vs +1.5% vs +0.9% vs -2.2%; DAX -1.9% vs -1.1% vs +2.1% vs +1.5% vs -2.3%; Nikkei -0.7% vs +1.1% vs +0.2% vs -2.9% vs +1.2% vs -1.3% vs -0.4% vs +1.9% vs closed vs -2.2%!!! vs -1.7%; Hang Seng -0.8% vs +1.9% vs +0.9% vs -5.3%!!!; Korean KOSPI -0.9% vs +2.1% vs +2.7% vs -4.9%!!! vs +0.2%; Indian Sensex down for a 4th session -1.4% vs  -0.4% vs 1% vs closed vs -1.2%. U.S. stock futures WEAK: DOW -110; SPX -13; NDQ -22. Bond market rallying…finally!: 10 yr 2.01% +7/16. RECORD low 9/23 of 1.6855%; 30 yr 3.05% +1-1/16; Long TIP 0.74% vs .57% at high last Tuesday. The 5 yr TIP yields MINUS 1.07%! 10 yr -0.07%. Libor  0.47% 3 mo., and 0.67% 6 mo., still creeping higher! Bills still yield zero percent out to six months where it is just 0.04% – 1 month T-Bill 0%! 

Gold trading down overnight after a weak session Monday. It closed at $1778.40 -$9.70, and is now $1770.50 -$7.90. The record high is $1923.70, a buying climax on 9/6. SUP is $1720, the 40 day. Crude traded to highest since 7/26 yesterday, $99.69, but closed at $98.14 -.85 and is off overnight to $97.65 -.49. Support at the 200 day (95.15) which had been resistance for the past two weeks. Major support is the convergence of the 40 and 50 day m/a’s at $88.05-.10, still moving up.

 

Groupon watch continues (GRPN) IPO Priced at @$20 11/3

Day1 $31.14-25.90 closed 26.11 +$6.11

Day2 $27.78-24.59 closed $25.97 -.14

Day3 $26.21-24.75 closed $24.90 -$1.07

Day4 $24.56-22.76 closed $24.02 -88 – gap down on open from $24.75-$24.56 – now res.!
Day5 $24.96-23.20 closed $24.41 +.39 – first up day and higher high, higher low!

Day6 $25.23-23.61 closed $24.25 -.16 – down again on an inside session

Day7 $24.16-23.40 cloaws $24.07 -.18 – lower high and lower low

(TB wonders if your Congressmen got allocated any shares and were then flipped the first day?)

 

…TB was researching the old saw: how can you tell when a politician is lying? His/her lips are moving. Googling the quote he was directed to this site:

Major Felkins/Congressional deceit

 

This is a very good summary of just how much contempt our elected officials have for those who elected them…or didn’t! He covers the one TB coined that if Congress or the President wants to name an act or rule after you: run! You will be embarrassed. He also points to bills with nice sounding names that do the opposite of what the name implies. ‘Protection’ is one, ‘Improvement’ another and so on.

 

TB’s uncle, sued the government in what became known as U.S. v. Darusmont when it went to the U.S. Supreme Court. He had been transferred to California from Texas and sold a triplex, for which he was able to deduct the portion that was his residence, but on the balance, he paid the capital gain. Unbeknownst to him, Congress was working on the Tax Reform Act of 1976, and he thus incurred additional tax liablility. A lawyer friend suggested he take it to court and he won in the district court and on appeal. Then he lost and it went to the U.S. Supreme Court who didn’t hear the case as they concurred with the lower court decision. This case is taught in law school. Now consider that a Congressman would be aware of the pending change in the law and thus choose a different course of action on the disposition of the property. He however was unaware and although he didn’t become aware of the law until it passed, after the fact, the effective date was when it went to committee. He sued on the grounds that the transaction was prior to the enactment of the law. Despite losing, the case is taught in law school and thus he won in a way. This is a segue into how Congress has the advantages, and uses them!

 

How many of you have read the Tom Clancy novels with protagonist Jack Ryan? If you do, you know that the All-American hero, has a dark cloud in his past. ONCE, he did an insider trade and made a lot of money from it. It haunted him constantly, for fear of it being found out, then at one point he told the CIA Director, if memory serves, and the whole thing was put to bed. Probably a good thing for a national and international hero.

 

But now we know that Congress, which is made up of anything but heroes…some might say thieves and fools…which would bring a nod from TB, is once again above the rules. Thankfully 60 Minutes stood up to them and outed them with rebuttals that made them look foolish…and guilty! TB loves how they used the excuse that their investment advisor must have done the trades without their knowledge (remember Hillary’s trades in cattle futures?). If you missed it, here is a great summary from SF GATE: SFGate/Insider Trading.

 

Now consider that no person joins this elite club and leaves without having more than when they came to D.C. Also, they hold themselves above the people. Has anyone proposed that their draconian cuts with no revenue increases apply to themselves? Cutting their pay, paying more for their benefits? No! Not even the ‘affable’ (laughable) Eric Cantor or John Boehner who is guilty as charged along with his predecessors Nancy Pelosi, and Dennis Hastert. But the worse thing is they aren’t done with us once they’re gone. For instance former Senator Phil Gramm, whose name is on the bill that destroyed Glass-Steagall. After he was out of office he came back to lobby senators ON the Senate floor…obviously illegal. He then went on to become Vice-Chairman of UBS North America. His role: to provide strategic advice to institutional clients (also lobbyist…who better to do that than an insider? He even attempted to bankroll a low-budget porn film, which failed but later invested in a film that a nude Richard Nixon romping in the White House. (don’t forget his wife Wendy was former head of the CFTC and on the audit committee of Enron! What a wholesome American family that is!

 

Oh but it gets even better! Remember Raj Rajaratnam? Sentenced to 11 years for doing exactly what Congressmen can and have been doing! Note also that he bought information from officers of companies who sold information to research firms yet none of those officers has been prosecuted…at least yet. But ex-Congressmen roam the halls getting tips which THEY in turn sell. Is this a great life or what? No, it is sick!!! SICK!!!

 

2012 is the time to teach them a lesson…vote against EVERY incumbent on the ticket! The next election, do the same until they either reform or all the rats are out of there. We deserve more than this…much more!

 

TB sent the following letter to the leaders of the Senate and House Ethics committees. Hope you will all do the same…this is how we get their attention. Step two is to vote them all out! After all they propose painful cuts for everyone else but don’t cut their own pay or pay more for their benefits:

 

I have had no confidence in congressional ethics committees for years. You act at the pace of a wounded snail and with fewer teeth!

The clincher was last night on 60 Minutes which once again shows contempt for the rest of the citizenry by exempting Congress from insider trading…while they sent Martha Stewart to jail for a minor case of it. Shame on all of you. You have all lost your moral compass!

Do something to enact legislation banning insider trading and from allowing former members of Congress from obtaining and acting on insider information.

I have forty years investment experience and am thoroughly disgusted with the Congress of the United States of America!

What kind of people are you where the laws don’t apply to you?

 

When TB mentions Elizabeth Warren, he gets back comments that she is a flaming liberal. TB has backed off on that but believes it was the banking lobby, led by Jamie Dimon, that destroyed her chances of heading up the new Consumer Financial Protection Bureau. What is strange about this is anyone who can read saw the stories of doctoring loan applications by the banks, steering people with solid credit scores into subprime variable rate mortgages – especially minoritys. Here is her defense, courtesy of the wise Simon Johnson at The Baseline Scenario. Read it and then YOU decide. We have to start thinking for ourselves, because the government isn’t thinking…except with their wallets!

Simon Johnson/Elizabeth Warren. Who has more credibility: Simon Johnson or Karl Rove? TB has said he doesn’t anyone named Carl that spells it with a ‘K.’

 

. . .   – – –  . . .

TB keeps hearing and getting sent about the ‘hippish’ OWS people. This is a great diversion. TB would bet the Brits said the same of the bunch of hoodlums who destroyed property at the Boston Tea Party? Ignore the substance and focus on the flaws if you want to destroy something…or as the old saying goes: kill it before it multiplies!

 

One after another the GOP candidates expose their flaws. First it was Perry, then Cain who still insists he did nothing wrong to any women…amazing how women are willing to come forward and lie while shaming themselves, isn’t it? But more importantly Mr. Becki-Becki-Beckistan yesterday in an interview was asked if he agreed with Obama’s handling of Libya. He tried to get them to say the answer they were looking for and seriously could not even think of the answer except to say: whatever it was I disagreed with Obama…brilliant! Loser! Forget about Bachmann, hers are all over the place…by the way: what’s with her new do? Looks like a school marm?

 

Obama was right to stand up to the stupid, uninformed bravado of the normally calm Romney. See how simple it is: with Romney Iran has no nukes, with Obama they have them. Mitt, we expected more of you than this! Can we get a new slate of contenders? TB would still keep Huntsman who may be the dark horse and is the rational one of the lot.

 

TB keeps forgetting to comment on the passing of Andy Rooney. One of the great old style reporters who knew how to tell a story and despite his curmudgeonly ways had a lot of wisdom. TB can only recall a few that were as good: Art Buchwald, Herb Caen and Jim Bacon.

 

Here is Bacon’s best story: his good friend became LBJ’s press secretary and lamented that he couldn’t give him a scoop due to the time difference. But one night he called him and told him this: tomorrow at 9am, LBJ is going to hold a press conference in the Rose Garden. He is going to FIRE J. Edgar Hoover as head of the FBI. Your papers won’t hit the street until it happens, but you cannot call for confirmation, you have to trust me on this.Bacon wrote the story and submitted it to his editor. The editor insisted on confirmation and called the White House…of course being in the middle of the night the press secretary wasn’t there, and they called back to say it was erroneous.

 

The next morning, in the Rose Garden, LBJ named J. Edgar Hoover head of the FBI for life. Everyone knew that Johnson hated Hoover, especially for accusing his friend Jack Valenti of being gay. As he walked back into the White House he stopped in front of the press secretary, stared him down and said, “Listen you little SOB, I run this country, not you.” TB rests his case on the vindictiveness of Johnson.

 

(by the way, the movie was craftfully done but is a downer and only confirmed what we already knew about this Gestapo-like man. No mention of his being named Director FOR LIFE! Hoover even tried to pass the position on to his gay paramur, Clyde Tolson)

 

Have a great day and don’t let the B%*#&@%’s get you down!

 

TB

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