3/13/12…love means never having to say you’re sorry

Bloomberg Top Stories:


*U.S. Retail Sales Climbed in February by 1.1%; Ex-Autos +0.9%

*Stocks Rise as German Economic Confidence Jumps; U.S. Futures, Copper Gain

*Carlyle Owners Took $400 Million Tax-Deferred Payout Before IPO With Debt – see below!

*German Investor Confidence Surges on Signs Debt Crisis is Easing – comment du jour

*Tainted Libor Rate Guessing Games Face Replacement by Verified Bank Trades – finally!

*Greek 2023 Bonds Yield More Than 2042 Securities on Concern Over Debt Load

*JPMorgan Defies Banks as Mutual Fund Losers by Breaking Into U.S. Top 10 – oh joy!

*EU Joins U.S., Japan in Challenging China’s Rare-Earth Export Restrictions

*Power of Bernanke’s Words shown in Flattening Yield Curve – power of jawboning!

*Coffee Drinkers From Amazon to Rio Push Brazil’s Consumption Past the U.S.

*Private Equity Buying U.S. Foreclosures for Hot Rentals Net 8% – more wealth transfer!

*Romney Leads in Poll Showing Most Americans Disapproving of Private Equity – timely!

*Obama in Poll Winning More Americans Than Not Asserting They’re Better Off

*Suspect in Afghan Civilian Killings Knew Tensions of War From FOUR TOURS!!!   



Volume dropped to 3.06B which may well be a new low for the year vs 3.5B shares. Contrast to 4.16B on Tuesday’s big downdraft, and the Dow remains still remains below 13k, not even an intraday high for SEVEN sessions! Two weeks ago Wednesday’s high was the highest of the recovery at 13,055.75. NYSE stocks executed on the Big Board PLUNGED to 644M shares, lowest of 2012, from  719M or about 350M below average. Two week ago Wednesday’s was the highest of 2012, 1.11B shares. Since 11/1 there have been just seven 1B share days…only two in 2012! Since 2/6 there have been FIVE sessions less than 700M shares. 82 of the last 87 sessions have now been less than 1B! Advance/Declines were negative: -1.2x vs +2.3x vs +3.9x vs +3.7x vs -10.4x!!! on NYSE and -1.3x vs +2.6x vs +2.6x vs +2.9x vs -4.6x! on Nasdaq. Breadth was similar: -1.7x vs +1.8x vs +5.8x vs +4.7x vs -24x!!! on NYSE and -1.6x vs +2.5x vs +2.7x vs +3.6x vs 6.5x!!! on Nasdaq. New 52 week highs slipped to 213 vs 294, while new lows rose to 36 vs 28. the ratio is +6x vs +10x. The S&P VIX, after climbing to 20.87, highest since 2/10 while gapping up for two straight sessions fell for a third day and is now at the lowest since 7/1/11, closing at 15.64 -1.47. This on a mixed session??? Oh! Options expiry Friday, that explains it! Extreme caution advises since today could be another up session on strong retail sales!


Here are the results of the last five sessions: Dow +0.3% vs +0.1% vs +0.6% vs +0.6% vs -1.6x; Transports -0.3% vs +0.3% vs +1.4% vs +0.5% vs -1.5%; Dow Utilities +1.1% vs +0.4% vs +0.2% vs -0.1% vs -0.4%; S&P 500 FLAT vs +0.4% vs +1% vs s+0.7% vs -1.5%!!! Nasdaq Composite -0.2% vs +0.6% vs +0.9% vs -1.4%; Nasdaq 100 FLAT vs +0.4% vs +1.3X vs +0.7% vs -1%; Russell 2000 -0.3% vs +1.3% vs +1.3x vs +1.1% vs -2.1%!!!; NYSE Financials -0.3% vs +0.3% vs +1.4% vs +1.1% vs -2.8%!!! NYSE Financial Leaders: BAC -0.8%! vs -0.1% vs +0.5% vs +4% vs -3.3%! vs -2%!; C +0.5% vs +0.6%.


Global equity markets generally strong on German Investor Confidence and strong U.S. retail sales: FTSE +0.8% vs -0.1% vs -0.1% vs +1.3% vs +0.4%; CAC40 +1.1% vs -0.1% vs +0.1% vs +1.9% vs +0.7%; DAX +1% vs +0.1% vs +0.2% vs +0.7% vs -1.5%;  Nikkei +0.1% vs -0.4% vs +1.7% vs +2% vs -0.6%; Hang Seng +1% vs +0.2% vs +0.9% vs +1.3% vs -0.9%; Korean KOSPI +1.1% vs -0.8% vs +0.9% vs +0.9% vs -0.9%; Indian Sensex +1.3% vs -0.4% vs +2.1% vs closed vs -0.2%. U.S. stock futures also rallying: DOW +61; SPX +7; NDQ +13.25! Bonds a little weaker: 10’s and 30‘s above 2% and 3% respectively: 10 yr 2.06% -9/32. RECORD low 9/23 of 1.6855%; 30 yr 3.20% -5/8; Long TIP 0.79% -1/4. 0.57% at high. The 5 yr TIP yields MINUS 1.41%; 10 yr -0.25%. Bills 0.04% 1 month; 0.08% 3 months, 6 months 0.14%. Reverse Repo 0.23%. 3 mo. Libor 0.47%, and 0.74%, stable.

Gold closed below $1700 at $1699.80 -$11.70…just $2 above the 50 day m/a.  A week ago Tuesday’s $1792.70 intraday high, not seen since 11/16! It had been above $1600 since Jan. 31, and is now $196.00 -$3.80, below the 40 day too! The record high is $1923.70, a buying climax on 9/6. Res is $1720, the 40 day and $1699, the 50 day, sup $1680, the 200 day, all rising! Major support is $1652, the 1/25/13 low! Crude also closed lower at $106.34 -.96. It is now $106.77 +.43, with support at the 40 day (102.30), the 50 day (102.07), and major support at $94.91, the 200 day, all rising. Resistance remains at $110.


What a day where the Dow fought, and failed to get back above 13k  for a 7th straight session. Most of the session it was up slightly while the others were in the red. Dow Utilities (+1.1%) were the biggest winner after having been in a slump, while both the S&P 500 and Nasdaq 100 managed to eke out a FLAT session. All other indices were down! Both Advance/Declines and Breadth were negative after three straight positive sessions following that huge decline. But the most amazing fact was the VIX which took an 8% decline (usually associated with a big rally. It has been down for four straight sessions despite a lackluster market and after gapping up for two straight sessions to a high of  20.87, highest since 2/10 but ignored the indices yesterday to clise at 15.64 -1.47, lowest since 7/1/11!!! TB was perplexed until he noted Friday is options expiry!!!


Meanwhile, fund manager John Hussman of Hussman funds, a PhD with a solid track record and a bear currently, sees a sharp correction coming, exacerbated by investor complacency, a high 18x Schiller p/e, and corporate insider selling outnumbering buys by 4:1 – a distinct negative. The only caveat TB would add is that you don’t know if those options exercised were due to options expiration…but if so it means they exercised and then sold immediately! Think about it.


Did you see the headline above on the Carlyle Fund (aka the ex-President’s club?). Yep they issued debt, did an IPO and took out a combined $400 million deferring the taxes. No wonder people are sick of it all.


You decide if stock market offers value…TB already has…it offers RISK!!!


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

…now we have a trilogy of movies, adding Love Story (1970). The reason is Mr. Romney’s insistence that he would never apologize for an American action…this is not only arrogant but stupid. He and Gingrich criticized Obama but in light of the latest atrocity in Afghanistan, Newt backed off. We now have a hat trick: desecrating Afghan enemy bodies, burning the Quran, and now a massacre by what has to be a PTSD soldier. He is from Fort Lewis, WA where several soldiers involved in recent incidents have come from. Note also that the Army is complaining that the cost of treating PTSD patients is too expensive…c’est la guerre!


First there was the GOP screaming about phasing down Afghanistan saying commanders on the ground were opposed…some probably were…but that was all considered in the decision. This followed the constant complaint about a deadline…started by Bush by the way. The argument is that with a timeline the Taliban will just wait. They will wait if it takes a thousand years. Afghans have no sense of time. Like we did with the French in Viet Nam, and from the Russians in Afghanistan, we failed to heed their mistakes. Translation: you cannot beat them.


Then there is the complaint that Obama seeks consensus with the other powers, as opposed to Dubya’s ‘go it alone’ cowboy approach, which contradicted his own father’s in Gulf War I.  Also, we went into Afghanistan to do one thing: get Bin Laden and Al Qaida – we failed and partly because we split off to Iraq thus creating the two longest wars in U.S. history.


That is the point: we have troops who have been fighting for too long…they have had their families torn apart, yet the ‘patriots’ say we must continue to fight this losing war. In Viet Nam it was under Democratic leadership, now it is the Dems who want to end it while the GOP wants to fight, not just in Afghanistan but Syria and Iran…to do otherwise is a sign of weakness.


…like never having to say you’re sorry? …or “I’m sorry but…”


Obama’s approval rating has slipped from 50% to 46%, lowest in his term…but on what? They continue to blame him for gas prices. Yesterday, TB pointed out that he has no control over gas prices…or crude prices. Refineries are not operating at capacity, the pipeline that ends in Oklahoma (where they wanted yet another Canadian pipeline), is called the ‘roach motel of oil,’ it comes in and doesn’t go out…it does, but slowly and at $1 or so less than West Texas Intermediate. We are being ripped off by the oil companies…seen their profits lately? Meanwhile, crude prices are high due to unrest and despite the GOP, it was higher under Bush…but explain why crude was higher but the price of gas at the pump was lower. We also know that that spike in oil was caused by speculation – by the banks, chiefly Goldman, Lehman, and Morgan Stanley using a loophole in the trading rules that put no limits on their positions. They doubled up while writing commodities swaps to mutual funds entering on the advice of their consultants. The funds lost, the public lost, but the banks got richer…isn’t that how it goes?


Have a great day!




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