9/6/12…Obama didn’t, but…

Bloomberg Quote of the Day: “Silly things do cease to be silly if they are done by senible people in a sensible way.” – Jane Austin…silly me!

TB’s Late Quote of the Day (this has been sticking in TB’s craw since the speech…from the transcript:  “You deserved it because you worked harder than ever before during these years.  You deserved it because, when it cost more to fill up your car, you cut out moving lights, and put in longer hours.  Or when you lost that job that paid $22.50
an hour, benefits, you took two jobs at $9 an hour
(APPLAUSE)
You deserve it because your family depended on you.  And
you did it because you are an American, and you don’t quit.  You
did it because that was because it was because you had to do.
The driving home late from that second job, or standing there
and watching the gas pump hit $50 and still going.  When the
realtor told you that to sell your house you’d have to take a
big loss on your house.  In those moments, you knew that this
just was not right.  But what could you do except work harder,
do with less, try to stay optimistic, hug your kids a little
longer, maybe spend more time praying tomorrow would be a better
day.” (Discussed below)

Bloomberg Top Stories:

*ADP Employer Services Says U.S. Added 201,000 Jobs in August – a good start, if!

*Draghi Holds Key Rate Steady With Credibility at Stake on ECB Bond Plans

*Euro Survives 2012 Intact in Global Investor Poll Seeing Rescue of Spain

*Stocks Rally With Euro as ECB Meets; Gold Climbs, Spanish Bonds Advance

*AIG Seeks to Raise $2 Billion by Selling 600 Million Shares of AIA Group – $3.33???

*Euro Calm Spurs Most Bond Sales Since March as Strom Looms – it never left!

*Richest Man in China’s Value Climbs to $21.6 Billion on Demand for Drinks–soda pop!

*Bill Clinton Defends Obama Record While Rebutting Romney Criticism of Jobs

*Biden Takes Back Seat as Bill Clinton Follows Michelle Obama in Prime time – yep!

…Bill Clinton did! This from someone who didn’t vote for him either time. He told it and told it well…the big question is why haven’t the Dems defended themselves against the misstatements and outright lies spun by the Romney/Ryan team? It makes no sense.

It was an incredible speech…one that drove the factcheckers crazy all night and other than one glaring error that TB spotted his other comments were basically factually correct. But don’t take TB’s word for it…TB went to factcheck.org, which is supported by the Annenberg Foundation, Clinton speech factcheck , fully expecting to see it ripped to shreds. They did not.

The error TB caught however was that over the past two years medical cost have risen just 4% in each year…lowest in fifty years ‘due to Obama’s healthplan.’ The figures are correct but since the plan was not in effect it is impossible that that was the reason. Still, the provision limiting profits of insurers and the loss of jobs meaning fewer claims has set the stage for continued low inflation…if of course the plan survives which it won’t under GOP control. That is a fact!

TB watched in PBS and all evening David Brooks kept asking everyone from Julian Castro to Rahm Emanuel when they were going to discuss what the voters need to hear. The answer came loud and clear with Clinton’s 49 minute speech (as always he went over, this time by about 25 minutes).

After providing the data, he then summed up…took him about ten minutes to do it…with asking what you the voter wants…if you want what Romney/Ryan promise…you have to vote for them. But you only have their promise with no substantive facts about how they will do it. They promise they will repeal ‘Obamacare’ then replace it with something good….but will they? Can they with the Tea Party obstructionists? TB believes no, and we will be left with more uninsureds tying up emergency rooms and adding to the hidden costs of treatment.

Romney/Ryan (you have to use them together as Ryan is definitely the numbers guy), have to explain how they can have massive cuts to social services, increase military expenditures, and still cut taxes for the wealthy…oh yes, they will plug the loopholes. When? How? With that Grover Norquist pledge hanging over the GOP like the sword of Damocles it cannot and will not get done. End of story.

Elizabeth Warren added to the comments of Mass. Gov. Deval Patrick, but not as effectively. She could have added on the consumer protection agency that she was appointed to be the director but the Senate GOP members driven by Jamie Dimon thwarted that without an up or down vote…and tried to do it again. But it survived and its new director, a former Ohio attorney general, has succeeded in collecting $210 million from Capital One most of which was returned to those misled by their verbal statements to new cardholders. This has to awaken the others and that is what consumer protection is all about! Let’s see how she does in her battle with Scott Brown…who retaliated immediately against her speech last night…he had to…

The quote at the top of today’s column is directly from Romney’s acceptance speech. TB couldn’t believe it when he heard it: the secret it to lose one job paying $22.50 an hour (WITH benefits), and suck it up and take two at $9 with NO benefits…by the way you can’t afford the health care due to the cost of COBRA…good luck…you are on your own.

Note that 40% of the jobs lost were ‘high-paying’ while just 14% of the new jobs are!

As for the comment about keeping your home…it was Dick Cheney TB believes who said it is un-American to walk away from your home…something a business does every time it becomes economically unfeasible for them.

Well two weeks of taxpayer assisted conventions to the tune of $100 million (note Congress had no problem approving that!), come to a close tonight – thankfully!

Will Obama’s acceptance speech fall as flat as Romney’s did? We’ll know soon.

Have a great day!

TB

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

Stocks put in a rare second straight mixed day with little change in the indices (+ 0.1% to -0.2%) on almost all the indices while Dow Transports plunged 1.1% and the ‘bondlike’ Utilities fell 0.5% . Volume rose slightly to 3.3B shares vs 3.18B vs 1.81B shares vs 2.45B. The range since 7/29 is just 1.81B to 3.18B shares.  NYSE stocks executed without the aid of the ETN market rose to 676M shares vs 639M vs 746M shares vs 512M vs  509M vs 516m vs 504M – lowest since 8/15! There has only been ONE 700M+ day since 8/3, the highest since was 8/7 – neither were even close to 800M shares The high was 8/1’s 1.03B shares! Since 6/29 just 7 sessions have surpassed 800M shares. The average since 8/1’s 1.03B is just 606M, and the highest since 8/3 is 754M shares. There is STILL NO retail! The average for 2012 is just 783M shares and since 6/29 just 677M shares, levels not seen since week ended 12/30/11! 72 of the last 106 sessions have been less than 800M shares (68%!). Since 2/29 there have been just 19 ‘average’ days (mostly down!), including 3/16’s high for 2012 of 1.65B (4.85B including ETNs) and just 17 have been above 900M – 853M is the 12 month average and dropping! Since 11/1 there have been just 16, 1B share days…12 in 2012! Since 2/6 there have been 36 sessions less than 700M shares. 188 of the last 199 sessions have been less than the 12 mo ave (94%)!

Advance/Declines were NEGATIVE and have been positive for just four time in 12 sessions: -1.1x vs +1.5x vs +2.3x vs -2.5x vs +1.5x on NYSE and -1.3x vs +1.5x vs +1.7x vs -3x vs +1.5x on Nasdaq. Breadth was mixed but barely: +1.1 x vs +1.1x vs +3.7x vs -4.3x vs +1.2x on NYSE and -1.1x vs +1.1x vs +1.6x vs -6.5x vs +1.4x on Nasdaq. New 52 week highs slipped to 295 vs 310 (7/3’s 504 is the high), as did new lows to 63 vs 68. The ratio is +4.7x. The S&P VIX fell slightly to 17.76 -.22 from the highest level since 8/2 (17.98 intraday high of 18.96!), and has risen for 9 of the last 12 days after posting a 13.45, the low for 2012.

Here are the results of last 5 sessions: Dow +0.1% vs -0.4% vs +0.7% vs -0.8% vs flat; Transports -1.1%!!! vs flat vs +0.3% vs -1.1% vs -0.2%;Dow Utilities -0.5%! vs +0.1% vs -0.1% vs -0.5% vs -0.5%; S&P 500 -0.1% vs -0.1% vs +0.5% vs -0.8% vs +0.1%; Nasdaq Composite -0.2% vs +0.3% vs +0.6% vs -1.1% vs +0.1%; Nasdaq 100 -0.2% vs flat vs +0.7% vs -1.1% vs +0.1%; Russell 2000 -0.1% vs +1.2%!!! vs +0.4% vs -1.1% vs +0.4%; NYSE Financials -0.1% vs flat vs +0.8% vs -0.8% vs +0.1% (KBW Banks -0.2% vs +0.1% vs +0.3% vs -0.7% vs +0.6%; Nasdaq Banks -0.3% vs +0.7% vs +0.1% vs -0.9% vs +0.8%). NYSE Financial Leaders: BAC -0.4% vs +0.1% vs +1% vs -1.1% vs +0.5%. Faux banks still rising. Since 8/30 GS is up 5%; MS +8.1%…why???

European stocks strong, Asia not so much:  FTSE +0.7% vs -0.5% vs -0.9% vs +0.6% vs -0.2%; CAC 40 +1.3% vs -0.3% vs -0.6% vs +1.4% vs -0.5%; DAX +1.5% vs +0.3% vs -0.5% vs +1.4% vs -0.7%;Nikkei flat vs -1.1% vs -0.1% vs -1.6% vs -1%; Hang Seng +0.3% vs -1.5% vs -0.7% vs -0.4% vs -1.2%; Korean KOSPI +0.4% vs -1.7% vs -0.3% vs -0.1% vs -1.2%;Indian Sensex +0.2% vs -0.7% vs +0.3% vs flat vs +0.3%. U.S. stock futures strong and at session highs following ADP: DOW +77; SPX +9; NDQ +15.

Bonds closed weak yesterday and again overnight: 10 yr 1.64% vs 1.57%! – record low of 1.40%; 30 yr 2.75% -3/4 vs 2.68%. Long TIP 0.41% vs 0.38%. 0.28% is record low!The 5 yr TIP yields -1.40% vs 1,42%.10 yr -.67% vs -.71!Bills 0.10% 1 month; 0.10% 3 months; 0.13% 6 months. Reverse Repo 0.28%. 3 mo. Libor 0.41%! and 6 mo. 0.70% and slowly declining!!! European problem sovereign 10 years, Germany-benchmark 1.52% +5; Italy 5.41% -8; Spain 6.08% -27!!!; Greece 21.22% -11; Portugal 8.69% -6; Ireland 5.74% +2. Rumors fly and the changes on theses countries are incredible!

Gold consolidated slightly on an inside session but  closed at 1694.00 -$2. On the ECB news it had an o/n intraday HIGH of $1716.90 highest since 3/12/12!!! 7/12’s intraday low of $1547.60 was lowest since June 1. The hit stands at just $80 since 2/28!!! 2/28’s $1792.70 intraday high not seen since 11/16! The record high is $1923.70, a buying climax on 9/6/11. SUP at $1625, the 40 day, $1619, the 50 day. MAJOR SUP at $1653, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1705 +$11. Crude barely budged again and is weak after Tuseday’s high of $97.37 before imploding and closed at $95.36 +0.6?, eight days after an intraday high of $98.29 on a negative ‘key reversal’ killed the rally! Last Thursday’s close was $93.35, lowest since 8/16! SUP at the 40 day (92.51), and the 50 day (90.84), both rising sharply again. RES at the 200 day (96.62). Currently $96.19 +.83 – the o/n high was at the 200 day!!! A warning!   

Back to back weirdness…and the summer doldrums end this week – hopefully!

Yesterday TB commented on the weird divergence of the indices on Tuesday:

the Dow was -0.4% and the S&P -0.1%. Dow Transports, the Nasdaq 100 and NYSE Financials were all flat. In financials even the subsets were different with the KBW Banks +0.1% and the Nasdaq Banks +0.7%? That leaves the Nasdaq Composite +0.3%, Russell 2000 the big gainer +1.2%? and the lagging Dow Utilities +0.1%. All this on VERY WEAK VOLUME!!! So who is doing the buying…er…trading? You know who!

But it was almost as weird yesterday with the Dow +0.1%, S&P 500 -0.1% as were all the other major indices EXCEPT: Dow Transports -1.1%!!! and Dow Utilities -0.5% due to their correlation with bonds. Year-to-date the Dow is +6.7%,S&P 400 +11.7% BUT Dow Transports are OFF 1.4% – doesn’t that stand Dow Theory on its proverbial ear?

FedEx yesterday even lowered their forecast for the year for the first decline since 2009! Yet the bulls continue to praise stocks as the way to go…good luck to them amid all the signs of a global slowdown, not to mention the continuing credit crisis.

U.S. bonds have been suffering the past two days and again overnight after staging a rally for the second half of August! Meanwhile the moves in the problem countries are staggering…20 basis points or more each of the last three days…that is not investing that is pure speculation…even worse than our high freak traders!

Gold barely consolidated yesterday following its two day surge of nearly $30. Overnight it hit $1716.90, up $22.90 from last nights close! That is the highest it has been since 3/12/12!!! Silver is also roaring: $33.04 overnight, highest since April 3rd.  Crude is suffering and with the summer driving season over has little chance of moving higher unless…there is another crisis. Yesterday it tried to rally, failed at EXACTLY the 200 day moving average…speculatively driven!

BofA fell 0.1% and closed at $7.96 It has not been able to hold $8 since falling below it last week. Since 8/30, however, Goldman is up 5% and since 8/23, Morgan Stanley is up 8.1%??? Makes no sense to TB.

The notoriously wrong ADP employment survey indicates an increase of 201k jobs. Since it is primarily a survey of retailers and school just started again, it is probably higher than the number will be on Friday. Wait for Friday for more clues!!!

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