12/21/11…and up again! Go figure

Bloomberg Quote of the Day: “Some praise in the morning what they blame at night.” – Alexander Pope…just about describes the American people, doesn’t it??? TB


Bloomberg Top Stories:

*ECB to Lend Greater-Than-Forecast $645 Billion as Banks Line Up for Funds

*Wall Street Trading Revenue to Decline as ‘Year to Forget’ Comes to an End

*Bernanke Money Policy Seen Achieving Goal as Savers Become Consumers Again

*Italy’s GDP Contraction Might Indicate Fifth Recession Since 2001

*Bonds Stop Flowing as Collateral Recycling Gets Stuck at ECB – good reason for stock rally???

*Failed Deutsche Telecom Deal May Push German Takeovers to Eight-Year Low

*U.K. Stores Brace for Most Insolvencies Since 2008 as Sales Weaken – it can’t happen here!

*Mortgage Bonds Miss Out on Rally as Europe Bank Sales Loom

*Missing ‘January Effect’ May Elude U.S. Stocks Next Year – hold cash???

*Payroll-Tax Politics Pose Election Risks for Republicans in House, Senate – shameful!!!

Volume climbed back to 4B shares from 3.6B shares Monday, in yet another whipsaw and in case you haven’t noticed the swings are more volatile – right back above the 200 day moving averages. Meanwhile, NYSE stocks executed on the Big Board jumped to 947M shares from 775m shares, almost back to 1B which would be a first since 11/30 and highest since 8/8 to the lowest since 11/14. 25 of the last 28 sessions have been less than 1B! Advance/Declines were hugely positive: +7.5:1 vs -4:1 vs +1.7:1 on NYSE and +4.7:1 vs -4:1 vs +1.3:1 on Nasdaq. Breadth was even stronger: +35x!!! vs -3.1x vs +1.9x on NYSE and +11x!!! vs -5x vs +1.4x on Nasdaq. New 52 week highs climbed to 185 from 128 while new lows plummeted to 115 from 314 from 201!!! Note that the 201 was surprisingly high on an UP day! The ratio is nearly 1.5x positive again! VIX gapped down and declined to close at 23.22 -2.70, lowest since 7/27. Screwy!!!

Here are the results of the past three sessons: Dow +2.9% vs -0.8% vs flat; Transports +3.4% vs -2.3% vs +1.5%; S&P 500 +3% vs -0.8% vs +0.3%; Nasdaq Composite +3.2% vs -1.2% vs +0.6%; Nasdaq 100 +3% vs -1% vs +0.5%; Russell 2000 +4.2% vs -1.9% vs +0.8%; NYSE Financials +3.7% vs -1.9% vs +0.4%  Leaders: BAC +3.5% vs -4.1% vs -1.1%; C +4.6% vs -4.7%; GE +2.5% vs -0.9% vs +1.3%. How do you invest against that backdrop? You don’t! You gamble!


European equity markets weaker, Asia stronger except UK and India: FTSE -0.4% vs -0.3% vs -0.1%; CAC40 -0.4% vs +0.8% vs +1%; DAX -0.1% vs +0.8% vs +0.8%; Nikkei +1.5% vs +0.5% vs -1.3%; Hang Seng +1.9% vs +0.1% vs -1.2%; Korean KOSPI +3.1% vs +0.9% vs -3.4%; Indian Sensex +3.4% vs -1.3% vs -0.7%. U.S. stock futures little changed: DOW +7 SPX -0.20; NDQ +0.50. Bonds little changed and mixed: 10’s and 30’s still below 2% and 3% respectively. 10 yr 1.95% +1/32. RECORD low 9/23 of 1.6855%; 30 yr 2.94% -3/16; Long TIP 0.66% +5/16. 0.57% at high three weeks ago. The 5 yr TIP yields MINUS 0.96%!!! 10 yr -0.17%. 3 mo. Libor 0.57%, and 0.80%. 6 mo. – 3 mo. above 0.50% and six month above 0.75%…and climbing. Bills -0.02% one month. 3 months 0.00%. 6 months 0.03%.

Gold finally up after four sessions below $1600 and the 200 day. It closed at $1617.60 +$20.90 and is now $1625.90 +$8.30. The record high is $1923.70, a buying climax on 9/6. RES is 1719, the 40 day and $1707, the 50 day m/a! Major Res at $1800-1806, the November highs. Crude exploded to the upside and took out the 200 day ($95.78) closin $97.22 +$3.34, and is now $977.49 +.29.  Major sup/res is the 40/50 day m/a at $96.93-94.89.



…can you believe they attributed the rally to the surge in housing starts…true, the highest in three years but from what level??? Are we nuts??? Nevermind the idiots in the Senate who may have just succeeded in bringing on another recession. This will backfire badly on the GOP! AND the nation…too sad to believe it happened. Let’s recap: the House sent a bill extending the payroll tax cut for one year…hello…didn’t we do that for the beloved Bush tax cuts? Also included emergency unemployment insurance extension. Dead on arrival, so the only thing Reid could produce was a two month extension which was then dead on arrival at the House. Do these people even talk to one another? There will be lots of finger-pointing come election time!


But for the stock market…not to worry…and complacency is illustrated by the VIX which fell to the lowest level since July 27th. How can that be…note that the VIX has been complacent during every selloff…even declined slightly on the big selloff Monday which negated Friday’s rally and more. Less volatile??? MORE VOLATILE!!! Each swing has been bigger than the preceding in these events. It has to make you stop and wonder…perhaps even think for yourself!


. . .   – – –  . . . note that the same old SOS applies…perhaps more so!


TB is not proud to be an American these days…at least not proud of his government. This in a country that had compassion for the less fortunate during the Great Depression now shows loathing for those without jobs. 47 million Americans are now getting food stamps up from 25 million a year ago…deadbeats…that’s what they call them! New Jersey, the second wealthiest state reports its food banks are now being swarmed by those who GAVE food a year ago. Must be getting better, huh?


All of the miserly gains in the economy we have had will be eaten up by the failure to pass the extension of the payroll tax cuts…even some Republicans are talking about it…including a GOP strategist TB listened to yesterday…there will be hell to pay in November! What? Me worry?

Thankfully Newt has peaked, blaming it on negative ads from his opponents. Funny, he didn’t get one endorsement from anyone who served under him. How about his cry for subpoena’s for judges who don’t please him. March them before Congress…defend the Constitution but separation of powers and checks and balances be damned…oh yes, we need you Newt – NOT!!!

Hope you have a great day!




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