3/29/12…throwing out the good with the bad

Bloomberg Top Stories:

*U.S. GDP Grew 3% in 4th Qtr, Same as Prior Est.; Corp. Profits +7% yoy, smallest in 2 yrs

*Initial Jobless Claims Fell 5,000 to 359,000 Last Week – fewer layoffs but job still weak

*Best Buy Profits Beat Analysts’ Estimates; Retailer Will Close FIFTY Stores – ahem!

*Monti’s Labor Law Overhaul Revives Political Risks for Italy

*Goldman Should Stop Saying It Puts ‘Customers First,’ Advisor Levitt Says – partners first!

*Repeating Top Returns Eludes Yactman as Ericksen Navigates Market Swings – past returns…

*End is in Sight for U.S. Recovery: Bloomberg Businessweek Opening Remarks – nice!

*Branson Virgin Money With Wilbur Ross Seen Disrupting U.K. Retail Banking

*Secret Court Vote Starts U.S. Health Review That May Shape Roberts Legacy

(if you can make sense of the news stories on this, you are better than TB – confusion reigns?)

*Medicare Budget Debate Comes Down to Who Trims the $50 Billion Program

*Boeing Lobbies for $2 Billion in Fighters as Lockheed Delays Leave a Gap – Boeing? Fighters?

*Fuel Shortages Reported in U.K. as Drivers Fill Up on Tanker Strike Threat

Volume rose to 3.85B vs 3.46M shares on NYSE listed stocks. Also, NYSE stocks executed on the Big Board rose to 817M shares vs 730M, still about 200M below the 12 month average. Since 2/29 there has only been one 1B+ share day, 3/16’s high for 2012 and the average has been just 830M shares, 200M below average! Since 11/1 there have been just eight 1B share days…only three in 2012! Since 2/6 there have been FIVE sessions less than 700M shares. 92 of the last 100 sessions have now been less than 1B! Advance/Declines were negative for a second session: -1.8x vs -1.4x vs +3x vs +2.4x vs -2.8x! on NYSE and -1.9x vs -1.6x vs +3.2x vs +2.3x vs -2.2x on Nasdaq. Breadth was similar: -2.4x vs -2.2x vs +5.6x! +3x vs -7x!!! on NYSE and -2.2x vs -1.1x vs +4.2x! vs +2x vs -2.2x on Nasdaq. New 52 week were halved to 160 vs 366, while new lows nearly doubled to 54 vs 28! The ratio is now +3x vs +12x. The S&P VIX was steady at  to 15.47 vs 15.59, although intraday it hit 17.27, highest since March 9! Friday 3/16’s intraday low of 13.66 was lowest since 6/20/07’s 12.75.

As predicted, the  quarter end for hedge funds due to T+3 settlement has left the rest of us at their mercy until tomorrow…do we then plunge into April? Don’t be a ‘fish’!

Here are the results of the last five sessions: Dow -0.5% vs -0.3% vs +1.2% vs +0.3% vs -0.6%; Transports -0.3% vs -0.2% vs +1.4% vs -0.1% vs -2.1%!; Dow Utilities -0.9% (worst)??? vs +0.5% vs +0.7% vs flat vs flat; S&P 500 -0.5% vs +0.5% vs +1.4% vs +0.3% vs -0.7%; Nasdaq Composite -0.5% vs -0.1% vs +1.8% vs +0.2% vs -0.4%; Nasdaq 100 -0.5% vs +0.2% vs +1.8% vs -0.1% vs -0.2%; Russell 2000 -0.7% vs -0.7% vs +1.9% vs +1.1% vs -1%; NYSE Financials -0.2% vs -0.8% vs +1.4% vs +0.8% vs -1.2%!. NYSE Financial Leaders: BAC +1% vs -3.3%! vs +0.8% vs +2.5%! vs -2.2%! vs +0.1%; GE -0.2% vs -0.1% vs +1.4% vs -0.4%; F flat.

Global equity markets weaker for a second session, three for Europe!now down 2.5% last 9 sessions: FTSE -0.9% vs -0.3% vs -0.1% vs +0.5% vs -0.4%; CAC40 -0.9% vs -0.3% vs -0.3% vs +0.1% vs -0.7%; DAX -1.2%! vs -0.5% vs +0.5% vs +0.6% vs -0.6%; Nikkei -0.7% vs -0.7% vs +2.4%!!! vs +0.1% vs -1.1%!; Hang Seng -1.3%! vs -0.8% vs +1.8%! vs flat vs -1.1%!; Korean KOSPI -0.9% vs -0.4% vs +1% vs -0.4%! vs flat; Indian Sensex -0.4% vs -0.8% vs +1.2% vs -1.8%!!! vs +1% vs -2.3%! U.S. stock futures weak: DOW -38; SPX -4.80; NDQ -8.25. Bonds slightly better: 10’s and 30‘s still well above 2% and 3% respectively: 10 yr 2.16% +3/8. RECORD low 9/23 of 1.6855%; 30 yr 3.27% +3/4; Long TIP 0.83% +15/16, it was 0.57% at high. The 5 yr TIP yields MINUS 1.29%; 10 yr -.18%. Bills 0.03%! 1 month; 0.07% 3 months, 6 months 0.13%. Reverse Repo 0.21%. 3 mo. Libor 0.47%, and 0.73%, beginning to slowly decline.

Gold closed below $1700 for a 13th straight session and tanked, negating two days of progress, making the hit  $18 since 2/28, closing $1660.50 -$27.20!!! 2/28’s $1792.70 intraday high was not seen since 11/16! It has been above $1600 since Jan. 31, and is now $1661.90 +$1.40. The record high is $1923.70, a buying climax on 9/6. Res is $1689, the 200 day and $1711, the 50 day, then $1714, the 40 day, rolling over. Major support is again $1652, the 1/25/13 low, now res! Crude also tanked to $105.41 -$1.92. This cements it in a range of $105-110 since 2/21 – which way will it break? It is now $105.00 -.41, with support at the 40 day (104.40), the 50 day (103.40), and major support at $95.29, the 200 day…watch closely as all are rising! Major resistance at $110!

See what happens when there are two different quarter ends for different classes of investors? Hedge funds, due to leverage, have to close their books early or they could distort performance by buying and not settling on the trades. Others can do this but at their own risk. So it is proper but you have to be aware of it to play this game.

The worst performer was Dow Utilities…very unusual on a DOWN day! Best was NYSE Financials off just 0.2%. But the big story again is the Nasdaq 100 which fell  0.4% losing 11 points (0.2%), but as has been the case of late that was due to AAPL (+2.7 index points) and now Google (+2.1). Taking them out would make it off 16 rather than off 11 points for a loss of  0.7%, more in line with the 16 stocks up, 83 down!

Two more sessions of hell in which everyone’s quarterly performance is at risk. Before you  content yourself with the performance of the indices, the best of course contained Apple which is up 52.5% year to date (76.2% 12 months!), ex-AAPL how would that performance look? TB will address that again on Monday. Place your bets!

. . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)

…ah the wonderful U.S. Supreme Court which has fallen from grace due to its political leanings. First, was the Bush/Gore decision which they can only be commended on for ending a mess, but the decision smacked of partisanship (5/4), and although it was later determined that Gore received 500,00 more votes, he still would have lost the electoral vote, the fourth time this has happened. It is also noteworthy that Bush had picked up the phone to call Gore and concede when a reporter interceded and told him not to…hmmm, impartial press? Aren’t they supposed to just observe?

Next came Citizens United. In another partisan 5/4 ruling they opened the floodgates for disinformation and negative campaigning by allowing corporations to spend unlimited amounts of money. The SuperPacs exploded in size and now it is difficult for the candidates to get their story out as they are buying most of the air time. Wait until the real campaign begins. The argument is that unions give unlimited funds…but how much power do they have any more…a poor argument.

Now we are faced with the healthcare issue and hopefully, while it will likely be another 5/4 decision, it will not be thrown out in entirety, or the health insurers will have won again and in a country where the people move from state to state and frequently, portability is essential. Don’t be deceived that there are no good purposes in this bill, but it is truly sad the lengths the opposition has gone to destroy it. The irony is that most of this law was in accord with GOP ideas from before the Dems took control of Congress. It is very similar to Romneycare, which he now says is bad and takes no credit for.

Ah yes, the issue is states rights but given the corruption in insurance at the state level, and limited access in many states to several insurers, it is a license to steal for the insurers, and steal they will. TB has little or no respect for them since they went for profit, leaving only a few, notably Kaiser, that act for their members.

Then there is the despicable action of Billy Tauzin with the blessing of Bush for taking the teeth out of serious health care reform by prohibiting Medicare from negotiating for prescription drugs causing their costs to be 30% higher than Medicaid. Sadly, Obama succumbed to the powerful lobby too, now headed by Tauzin who is paid $11 million!

Capitalism is not dead and it is still the best system yet devised. But we do not have capitalism due to greed (which is rampant in all forms of government), but by caring only about themselves heads of major corporations and their boards have shirked their fiduciary duty to shareholders, and to the future of their companies for their own short term gains. Worse, their business practices have been corrupted and despite Sarbanes-Oxley enacted in the wake of Enron, not one CEO has been prosecuted, the same number as the financial crisis. Now they have destroyed the Volcker Plan, the key element of Dodd-Frank (after they first abolished Glass-Steagall), and fought the establishment of a new consumer protection agency (which Obama did an endrun on, and which may have been the greatest accomplishment of his administration.

The financial sector now controls the entire government of the United States and your vote is meaningless…a hard fact…as they will not allow change. As Simon Johnson, former chief economist for the IMF has stated: in every case where they were brought in to bail out a country it was due to the financial sector getting to close to the government.

It can’t happen here? You decide, but think carefully and beware what you wish for.

Mea Culpa: yesterday in commenting on a movie on Nancy Reagan which cast Jane Fonda to play her, TB said, “Nancy is rolling over in her grave now.” That happened because of the tone of the article. She is still alive which makes it even more of an insult.

Consensus is she is one tough woman…ask Don Regan who she ran out of the cabinet.

 

This happened once before with Lawrence Welk. A friend asked it he was still alive. TB replied, “he’s been dead for years.” Turned out he wasn’t but he died the next day, to which TB got from her, “you killed Lawrence Welk.” That wasn’t, nor is it, the intention.

Lastly, on the Trayvon Martin case, the right is having a great time destroying the character of Martin (a moot point), while ignoring Zimmerman’s being charged with assaulting a police officer and a case of domestic violence for starters. The point remains, had he not been ‘playing cop’ we would not be having this discussion. But that perhaps is a good thing, sadly over the loss of a life. Racism in the U.S. is buried but it still exists. We have all been guilty of it at some point or another, including TB sadly.

Have a wonderful, fun day!

TB

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