1/23/12…there’s nothing ‘super’ about SuperPAC’s

TB’s Quote of the Day: “Why would I want to join a club that would have me for a member?” – Groucho Marx…perhaps the Croates should consider this before joining the EU??? TB


This week’s economic calendar is back-loaded. The highlight of the week will be the advance report on Q1 GDP (Friday). We will also get December Pending Home Sales (Wednesday), December Durable Goods Orders, December New Home Sales, and December Leading Indicators (Thursday), and mid-January Consumer Sentiment (Friday). In addition, the FOMC will hold a 2-day meeting (Tuesday and Wednesday). Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA


Bloomberg Top Stories:


 *Finance Ministers Meet on EU Crisis Solution as Greek Debt Swap Unresolved – yawn!

*Stocks Rise in Europe Before EU Meeting; Euro Strengthens as Gas Plunges

*Greece’s Creditors Have Made ‘Maximum’ Debt-Swap Offer, IIF’s Dallara Says

*Gorman’s Pay Said to Be Cut 25% as Dimon’s $23 Million Held Flat for 2011 – what a guy!

*Halliburton Fourth-Quarter Net Climbs as U.S. Hydraulic Fracturing Surges

*Speculators Raise Wagers on Higher Metals by Most Since July – hence this:

*Pan American to Acquire Minefinders in Deal Valued at About $1.49 Billion!!!

*Europe Giving Euro Doomsayers Pause as Investors Avoid Sanatorium at Davos

*Europe Will Ban Iran Oil Starting July 1 to Boost Pressure on Nuclear Plan

*Gingrich Pressed to Release Freddie Mac Contracts as Race Moves to Florida


Volume dropped surprising to a slightly below average 3.9B shares from 4.43B shares…surprisingly because it was options expiration. Only the Dow and NYSE Financials had strong gains, while both Nasdaq indices and Transports were slightly negative? S%P 500 barely positive on a parallel day to Thursday? NYSE stocks executed on the Big Board rose to 927M shares from 806M shares, still about 100 million short of the twelve month average – and an hour before the close that stood at just 600 million shares…the rally in the Dow began 15 minutes before the close adding 25 points for the 96 point gain…after the surge on the open it languished at up about 70 most of the session. 45 of the last 48 sessions have been less than 1B! Advance/Declines were positive: +1.4:1 vs +1.9:1 vs +3.9:1 vs +1.5:1 vs -1.9:1 on NYSE and +1.5;1 vs +1.4:1 vs +3.3:1 vs +3.3:1 vs +1.2:1 on Nasdaq. Breadth was less so: +1.2x vs +2.2x vs +6.9x vs +1.1x vs -3.2x on NYSE and +1.4x vs +1.8x vs +4.5x vs +1.4x vs -1.8x on Nasdaq. New 52 week highs plunged to 199 from 287 while new lows dipped to 27 vs 33. The ratio is still about 6x positive. The S&P VIX plunged again to 18.28 -1.59, the lowest reading since 7/22…just before the selloff began AND far too complacent!!!

Here are the results of the past five sessions: Dow +0.8% vs +0.4% vs +0.8% vs +0.5% vs -0.4%; Transports DOWN 0.4% vs +1.6% vs +1% vs -0.1% vs -0.6%; Dow Utilities +0.3% vs -1% vs flat vs +0.2% vs -0.1% vs flat; S&P 500 +0.1% vs +0.5% vs +1.1% vs +0.4% vs -0.5%; Nasdaq Composite DOWN 0.1% vs +0.7% vs +1.5x vs +0.6% vs -0.5% vs +0.5%; Nasdaq 100 DOWN 0.2%+0.7% vs +1.4% vs +0.9% vs -0.4%; Russell 2000 +0.3% vs +0.4% vs +1.8% vs +0.2% vs -0.8%; NYSE Financials +!%??? vs +1.7% vs +1.6% vs +0.1% vs -0.8%. NYSE Leaders:  BAC +1.6% vs +2.4% vs +4.9% vs -2.1% vs -2.7% vs -1.2% vs +3.6% vs +5.7%!!! vs 1.5% vs -2.1% vs +8.6%; C +1.1% vs +1% vs +2.9% vs -8.3%!!! vs -2.7% vs +1.1% vs +4.2%; GE FLAT vs +0..7% vs +1.5% vs -0.7%.


Global equity markets stronger, except Japan, Hong Kong and Korea closed for Chinese New Year, gung hay fat choy!: FTSE -0.1% vs +0.6% vs -0.1% vs +0.9% vs -0.3%; CAC40 -0.5% vs +1.7% vs -0.2% vs +1.6% vs +0.8%; DAX -0.3% vs +0.8% vs +0.2% vs +1.9% vs +0.1%; Nikkei DOWN 0.5% vs +1.5% vs +1% vs +1% vs +1.1% vs +1.4%; Hang Seng closed vs +0.8% vs +1.3% vs +0.3% vs +3.2%!!! vs +0.6%; Korean KOSPI closed vs +1.8% vs +1.2% vs flat vs +1.8% vs +0.6%; Indian Sensex +0.4% vs +0.6% vs +1.2% vs -0.1% vs +1.7% vs +0.7% vs -0.9%. U.S. Futures modestly higher: DOW +12; SPX flat ; NDQ +2. Bonds slightly weaker: 10’s and 30’s both above 2% and 3% respectively. 10 yr 2.04% -3/16. RECORD low 9/23 of 1.6855%; 30 yr 3.13% -1/2; Long TIP 0.79% -7/16; 0.57% at high. The 5 yr TIP yields MINUS 0.99%; 10 yr 0.00%. 3 mo. Libor 0.56%, and 0.79%, steady. Bills 0.03% 1 month; 0.04% 3 months, 6 months 0.07%. Reverse Repo 0.20% vs 0.24%

Gold higher and well above the 200 day ($1640). It has been above $1600 for 8 straight sessions. It closed at $1664.00 +$9.50. The overnight high is $1677.90, highest since 12/11 and it is now $1675.50 +$11.50. The record high is $1923.70, a buying climax on 9/6. Support is $1671, the 50 day, $1650, the 40 day m/a, all declining. Crude closed very weak at $98.46 -$1.93!!!, lowest since 12/21. It is now $99.40 +$1.07. RES is again $100, support the 40 day (99.32) and the 50 day (99.13), major support at $95.41, the 200 day.


…can the GOP sort out the mess they have gotten themselves into with all those negative ads? It is good news however for America and Americans as rather than the race being decided by three insignificant states, two far to the right of right, perhaps the rest of us might get a say, or is that too much to ask? See comments on SuperPACs in next session.



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

So Gingrich won by a landside and is already saying he is the candidate and the only one who can beat Obama by a ‘landslide.’ It is that very arrogance that disturbs TB and it should you in how he might handle foreign policy as he is a bigger gunslinger than Dubya was.


What happened to Romney’s $350 million SuperPAC? For weeks before the vote, the SuperPACs had bought all the available air time in South Carolina drowning out any candidate who wanted to get his point across…is this America? In the end, unbelievably, in this bible belt state, Gingrich won by a landslide, and all because of his dressing down of a questioner, questionably in the debate. How is it in a state that values the family, a serial cheater wins by so much…put your values aside Christians TB guesses.


Thanks to The Baseline Scenario, and The Atlantic Monthly, we are now aware of a study of SuperPACs by a Harvard professor (oops, that discredits him right?), that found that SuperPACs rather than helping the interests of their corporations…and presumably shareholders…found that they instead promote the interests of the CEO, personally and sometimes his political aspirations. Hey, it’s your money people…but if as a friend says: “so what they all lie,” appeals to you, then go with it but the problem with them is they aren’t telling you anything that helps you decide how to vote, instead they are merely confusing the voters and making them NOT care about voting. Wait for the race once the GOP has chosen a candidate…it will get much worse…from both sides.


Don’t believe TB about SuperPACs…Sandra Day O’Connor said Citizens United was one of the worst decisions ever. From the beginning of PAC’s TB felt they didn’t serve the interests of the shareholders or the employees (so what, they’re union, right?), and look how both union and non-union middle management and below have fared for the past three decades…not well. Nor have shareholders been served well…but top management…huge pay and bonus increases, more lowered bar stock options, and of course those golden parachutes that reward CEO’s when they fail…while the wealthy scream taxpayers have to have ‘skin in the game,’ but CEO’s???


The study of SuperPACs follows prior studies of corporate stock buybacks which are done at the wrong time…usually when stock prices are HIGH, and largely to offset expiration of employee stock options…in other words confuse and obfuscate. The studies show that buybacks produce short-term results thus favoring short-term investors at the expense of long-term investors…read: mom and pop.


So if you want to believe that politics is just about lying, that is your prerogative but you reap what you sow…and so does the country and your kids.


TB is a bit sick of the term ‘socialist’ being applied to Obama…after all both Romney AND Gingrich supported national healthcare initiatives similar to Obamacare. As Bob Sheiffer said, and did, on Face the Nation, look up the terms ‘liberal’ and ‘conservative’ in the dictionary…they have been modified by the opposite sides to mean ‘radical’ and ‘reactionary.’  No wonder there is no compromise in American politics and thus nothing being done when lots should be done.


How about the GOP coming clean and not blaming Obama for the biggest deficits in history and Gingrich’s new one: more people on food stamps than ever before in history…yep Newt, that is a fact and so is the REAL unemployment rate…don’t they go hand in hand or is it just bad politics to say so? Blame Obama? Blame Bush and the GOP with the help of the Democrats!


Not much to look forward to for TB on SuperBowl Sunday as his beloved 49’er’s stumbled last night…just couldn’t carry it to the end…Patriots are now favored by four…


Have a great week!




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