10/26/12…10 days, a cure?

…11 more days; a cure?

 

Go Giants!!! 2-0!!! Romo was having a great time, has attributes of a closer: relaxed!

 

 

Bloomberg Quote of the Day: “Take what you can use and let the rest go by.” – Ken Kesey…not the motto of the Koch brothers or many others of the top class, but then isn’t that what free market capitalism all about? Right Ayn?

 

Bloomberg Top Stories:

*U.S. Economy Grows at More-Than-Forecast 2% Rate, Aided by Housing Rebound

*Stock-Index Futures Pare Losses as Third-Quarter U.S. GDP Tops Estimates

*Spanish Unemployment Surges to Record 25% as Second Bailout Looms – 25%!!!

*BlackRock Seeking Money-Fund Compromise as Threat of Fed Oversight Looms

*Hong Kong Imposes Property Tax on Overseas Investors to Prevent Bubble

*Comcast’s Profit More Than Doubles on Asset Sales, Gains in NBC’s Ratings – ???

*Richest California Towns Debt Imperiled by Repayment Doubts – hmmm

*Women Chief Executives Dwindle to Two in FTSE 100 as Carroll Exist Anglo

*Hurricane Sandy Seen Becoming Worst Storm in 100 Years for Northeast U.S. – this could have an impact on state and local AND presidential election – perfect storm???

*Wen Jiabao’s Family in China Is Linked to Billions in Assets, NYT Reports

Gold and especially Crude continue to trade very weak. Gold is still in danger of closing below $1700 while Crude put in a new low Wednesday of $84.84, lowest since July 12th and it rose just 32 cents yesterday to a weak $86.05!

Globally bonds – now including Japan remain weak while the problem countries are rising again. Overnight Spain rose  while Portugal surged by 25bp’s…as Spain goes… n)

So far stocks have not even had a ‘dead cat bounce’ since Tuesday’s trouncing! For the week the Dow is till off 240 points (1.7%) and is been down 5 of the last six sessions, S&P 20 points (1.4%) but the real damage is the two Nasdaq indices which had been the leaders of the rally (?), and are off 0.7% and  0.8% respectively. After being down for four straight sessions, yesterday’s uptick was a joke. AAPL, which is 20% of the 100 has been down 15 of the last 21 sessions since the record high on 9/19. Consider Tuesday’s headline which sparked the selloff: lower corporate earnings, revised estimates and warnings. Yet yesterday stock were up early and higher earnings from a few reporting companies pushed them up in the overnight market…flawed logic…or just plain old hype?

– – –  . . .  – – –

Thanks to a friend here are the long-awaited details of the Romney Tax Plan:

http://www.romneytaxplan.com .

OK, in the interests of ‘fair and equal’ here is a clip from Rolling Stone on a name Obama called Romney…but do listen to it in entirety: Obama calls Romney a …

…is there a cure besides the ‘fiscal cliff’ which in TB’s opinion will force us into a deep recession or worse at a time when, as pointed out yesterday, the Fed is out of ‘bullets’? Was there an alternative to the bailouts, both financial companies and the auto companies? Will it happen again?

First, as TB has repeatedly said and Obama clearly stated in the last debate: sequestration will not happen! Why? Because despite the zealots who created the debt crisis when none existed (although we were on our way but their solution would clearly have destroyed this country as we know it), it is against the interests of both parties, and their special interest supporters to lose control of taxes and spending. TB predicts that Grover Norquist will be dethroned on the subject of tax increases or reductions in subsidies (if you google: Norquist, you will see that contrary to popular belief – including TB – the man is a ‘true-believer’ in the sense of Ralph Nader. Neither lives extravagant lives and fights tenaciously for their beliefs…that said, he is taking the wrong position, as are those who support his pledge), because without doing so no compromise can be reached.

As for the financial sector bailouts, any sane person who sat in front of a computer monitor they day they let Lehman fail, knows that there was no liquidity and no risk-taking! Had the Fed not stepped in and guaranteed financial commercial paper (with the exception of CIT Financial which was inexplicable as they were the primary source of funding for small businesses). Simon Johnson has written a short commentary that explains why neither the GOP or Dems are attacking the financial services sector as they strip Dodd-Frank of its power claiming it will destroy innovation. Johnson points out that that is precisely what caused the financial crisis and will cause yet another one if the panel succeeds in neutering it. Recall Johnson was former Chief Economist to the IMF and knows what he is talking about. Oh, the reason neither side is anxious for the truth to come out: Greenspan was appointed by a GOP president, Rubin served as Treasury Secretary to Clinton. Between the former’s Ayn Randian ideology and Rubin’s sellout to Sandy Weill, they are both a disgrace (note that Paul Ryan is also a believer in Rand!).

If TB had his way he would repeal Gramm-Leach-Bliley, break up the BIG banks, separate broker activities from banking activities (as Glass-Stegall did), require regulation and thus standardization of derivatives contracts so they can be traded on an exchange which would instantly decrease Wall Street’s desire to create them – no big score, no interest. It has been a failure, even its weak provisions not enforced, and the addition of Dodd-Frank has had the ‘intent’ altered by the banking lobby. Banks must not be able to choose their regulators from the different activities they are in, looking for the one who will interfere the least. The most vocal is Jamie Dimon of JPMorganChase, who presided over a $5 billion plus loss on derivative trading despite his assurances that the financial sector was ‘fixed’ and required no further regulation! It is ‘fixed’!

As for the auto bailout, Romney says he was in favor of federal ‘guarantees’ but only after they filed for reorganization). But that is a straw man because of this:

In 2007, Cerberus and about 100 other investors purchased an 80% stake in Chrysler for $7.4 billion[35] seeking to bolster the auto maker’s performance by operating as an independent company. In 2008, the plan collapsed due to an unprecedented slowdown in the U.S. auto industry and a lack of capital.

So there would have been no way to do what Romney wanted and thousands of small suppliers would have failed resulting in an ever greater loss of jobs. As it was, despite getting the funds, GM was way behind paying the suppliers who finally demanded ‘cash with orders.’

It is as absurd to say we can’t cut subsidies and tax advantages (carried interest where ordinary income is taxed at 15%), as to say we can cut the deficit and fix our problems. Many tax preference items amount to tax avoidance for the wealthy. They could be reduced or eliminated and have no net impact on reinvestment back into the economy. For one thing, much of this money is offshore and they have no intention of bringing it back home. On subsidies, Archer Daniels Midland’s subsidies are larger than its bottom line! What does that tell you about free market capitalism? Global warming has been thrown aside and will come back to haunt us…in fact it is continuing to do so while we bury our heads in the sand. Casualty companies are raising premiums by percentages of 15-25% because of the severity of storm damage. Not only that their investments are languishing and if you understand casualty insurance the goal is to break even on premiums and payouts with the investments providing the returns. That cannot happen in this economy. If you trust the less than 2% of ‘scientists’ who say there is no global warming you are part of the problem. Despite massive scientific proof of its existence, the Romney campaign still doubts its existence and wants even more fossil fuels, especially ‘clean’ coal which is a relative term. They selectively choose their science, but you cannot cite the same source for one thing and then deny it for another, right? The Koch brothers, arguably the biggest polluters in the country spend millions to counter its existence…they even hired a scientist to do a study debunking global warming only guess what? He found it was a danger! These two men are also trying to get Romney elected to keep their taxes low. Didn’t we learn from Obama’s Goldman contributions that you do not bite the hand that feeds you?

It is also incredible that Romney wants to increase military spending…even above what they want while slashing other programs. TB would bet you could easily cut 10-15% from the budget with no ill effects. Remember the military-industrial complex? It is alive and well and the linkage keeps it strong…as well as saying it is un-American to not support a strong military. Except there is a difference between strong and loaded with fluff.

But once again, it is not the president that controls this…that, fellow Americans is buried in the halls of Congress where the lobbyists keep the ball rolling with politicians more interested in getting re-elected than representing the people…except for YOUR representative who is doing a great job with earmarks for his district. That includes Rep. Ryan who screamed against earmarks then begged for two of them in the stimulus saying that he only did for them what they would do for anyone in the district. Guess that means that if he had a hundred requests there would be a like amount of earmarks.

Ah, but instead of arguing these topics, the GOP is pushing voter ID laws which are being overturned for discrimination, illegally registering non-residents in Florida, and spending an incredible amount of time on gay marriage and abortion rights, especially here in Minnesota. Why? To secure the vote of the Christian right. Separation of church and state they cry then drag both of these issues into politics instead of key issues on the economy. TB wonders what happened to what was once his party…don’t you?

Think what happens when they get to name Supreme Court justices and can get Roe v. Wade overturned and other personal choices while claiming the Obamacare will decide if you live or die. Frankly, TB doesn’t understand America anymore. Especially when those doing the greatest damage carry the Constitution and Declaration of Independence in their pocket and wear American flag pins to show their loyalty but interchange what is contained in the two great documents. Also remember, the framers agreed on very little!

Thanks to the tea party we got ‘majority rules’ especially noticeable in Wisconsin. Once elected, politicians have a duty to what is best for America not to be divisive. But who cares? Compromise is such an ugly word, don’t you think? No! Either we can wake up and demand our elected officials work together for a solution or we can watch as our great nation deteriorates and class becomes the most important thing…or is it now?

Is this a great country or what? You decide. To those who think TB will be elated if Obama wins, you are sadly mistaken.

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

Volume rose slightly again but remains well below the surge from last Friday’s options expiry: 3.5B vs 3.36B vs  3.13B vs 3.2B vs 3.87B vs 3.83B vs 3.64B shares on a second third weak, but up, session. On 9/1 volume hit 4.56B shares, high of the year. NYSE stocks executed without the aid of the ETN market also rose to 696M vs 650M vs 671M vs 634M vs 941M shares (highest since 9/21). 9/15’s 464M shares was the lowest since 11/25/11! There have been just eight 700M+ days since 8/3. The high ytd was 9/21’s 1.8B shares – due to a quadruple witching and an S&P rebalancing. Since 6/29 just 13 sessions have surpassed 800M shares. The average since 8/1’s 1.03B is just 668M. The average for 2012 is just 772M shares and since 6/29 just 691M shares– WEAK!!! 104 of the last 143 sessions have been less than 800M shares (72%!). Since 2/29 there have been just 23 ‘average’ days (mostly down!), including 9/21’s high for 2012 of 1.8B (5B including ETNs) and just 20 have been above 900M – 770M is the 12 month average and now dropping fast! Since 11/1/11 there have been just 17, 1B share days…13 in 2012! Since 2/6 there have been 63 sessions less than 700M shares. 223 of the last 238 sessions have been less than the 12 mo ave (94%)!

Advance/Declines were boring and mixed after five negative sessions: +1.5x vs -1.3x vs -2.7x vs -1.1x vs -3.4x vs on NYSE and +1.4x? vs -1.3x vs -1.8x vs -1.1x vs -4.2x! on Nasdaq. Breadth was barely positive: +1.2x vs -2x vs -7.5x! vs -1.1x vs -8.3x! on NYSE and +1.1x vs -1.5x vs -1.7x vs +1.2x vs -5.5x! on Nasdaq. New 52 week highs rose again  to 151 vs 110 vs 67 vs 97 vs 177 vs 330 vs 363 (768 is cycle high). New lows were steady at 103 vs 107 vs  143 vs 95 vs 121! vs 54 vs 48. The ratio is: +1.5x vs 1:1 vs -2.1x! vs  -1:1 vs +1.5x vs +6x vs +7x. The S&P VIX, slipped a tad again to 18.12 vs 18.23 -.11, still negative! The 12-month low was 13.32 on 8/17 while the 1012 high is 27.73 on June 4.

Here are the results of last 5 sessions: Dow +0.2% vs -0.2% vs -1.8% vs flat vs -1.5%; Dow Transports  +0.6% vs -2%! vs +0.9%? vs -0.4% vs -1.4%;Dow Utilities +0.4% vs -0.7% vs -0.9% vs -0.4% vs -0.7%; S&P 500 +0.3% vs -0.3% vs -1.4% vs flat vs -1.7%; Nasdaq Composite +0.2% vs -0.3% vs -0.9% vs +0.6% vs -2.2%; Nasdaq 100 +0.1% vs -0.4% vs -1.1% vs +0.4% vs -2.4%; Russell 2000 +0.4% vs -0.3% vs -0.5% vs -0.1% vs -1.9%; NYSE Financials +0.3% vs flat vs -1.7%! vs +0.3% vs -1.4% (KBW Banks +0.6% vs -0.3% vs -1.3% vs flat vs -0.7%; Nasdaq Banks +0.8% vs flat vs -0.5% vs +0.4% vs -0.6%; NYSE Brokers +1.4%? vs +0.3% vs -1.3% vs flat vs -2.8%!!! NYSE Financial Leaders: BAC -0.8% vs -0.6% vs -1.9% vs +1.2% vs -0.3% – no other leaders for a second session?!?

European stocks up, sans UK, Asia WEAK! FTSE flat vs +0.4% vs +0.4% vs -1.2%! vs -0.1%; CAC 40 +0.7% vs +0.3% vs +0.6% vs -1.7%! vs -0.1%; DAX +0.5% vs +0.6% vs +0.5% vs -1.6%! vs -0.3%;Nikkei -1.4%! vs +1.1% vs -0.7% vs +0.1% vs +0.1%; Hang Seng -1.2%! vs +0.2% vs +0.3% vs closed vs +0.7% vs +0.2%; Korean KOSPI -1.7%!!! vs +0.6% vs -0.7% vs -0.8% vs -0.1%;Indian Sensex -0.7% vs +0.3% vs -0.4% vs -0.4% vs +0.6%. U.S. stock futures little changed and mixed: DOW -21; SPX -0.40; NDQ +3.50 – it fizzles every day of late!

U.S. treasury bonds bouncing again but…still WEAK: 10 yr 1.79% vs 1.83% +1/4 – record low of 1.40%; 30 yr 2.96% vs 2.99% +3/8. Long TIP 0.43% vs +.44% +1/2. 0.28% is record low!The 5 yr TIP yields -1.39% flat; 10 yr -.70% vs -.67%.Bills 0.12% 1 month; 0.11% 3 months; 0.15% 6 months. Reverse Repo 0.32% vs 0.27%. 3 mo. Libor 0.31%; 6 mo. 0.54!!! On 9/18 they were 0.38% and 0.67% respectively…with no policy change??? European problem sovereign 10 years, and adding Japan, Germany-benchmark 1.61% +5; Japan 0.757% vs 0.784% on 10/18, 0.817% on 9/13, low 0.747% on 10/11; Italy 4.89% +4; Spain 5.59% +2; Greece 16.87% +10!…on 9/20: 19.75%!!!; Portugal 7.88% +26!!!; Ireland 4.61% +1

Gold rose but insignificantly due the depth of decline and closed at $1713.00 +$11.40. Tuesday’s low of $1704 not seen since 9/7! It is well below BOTH the 40 day AND 50 day moving averages last visited on August 15th! It closed at $1798.10 on 10/13, highest since 2/29 and it has lost $95 since. 7/12’s intraday low of $1547.60 was lowest since June 1. The record high is $1923.70, a buying climax on 9/6/11. RES at $1729, the 50 day, $1748, the 40 day – both rising. MAJOR SUP at $1670, the 200 day. CAUTION!!! 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1716.40 +$3.40. Wednesday’s low was $1704.60! Crude closed barely up after five WEAK sessions following Friday’s negative key reversal after trading weak for two weeks at $85.73 -.94! Wednesday’s session low of $84.94 was lowest since 7/12! It has traded below the 40/50/200 day since 9/19! RES at the 40 day (92.60), 50 day (93.30), and the 200 day (95.40) – all falling! Overnight it is $86.14 +.09.

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2 Comments »

  1. Yarnman said

    TB–Regarding voter fraud, there’s a revealing article in this week’s “New Yorker” magazine found at this link:

    http://www.newyorker.com/reporting/2012/10/29/121029fa_fact_mayer?currentPage=all

    Jane Mayer’s investigative reporting is always illuminating and fact-filled.

    Waddabout dem Jints? Do you put the groundskeeper in the Baseball Hal of Fame for adding just enough dirt under the third base foul line to tilt the ground towards fair territory for small ball bunts?

    –Yarnman

    • traderbill said

      Great reporting. See also voter registrations in Florida reported by L.A. Times…GOP. As for here, GOP is driving voter ID and misrepresenting it as they are gay marriage amendment. Imagine: just vote yes on the amendment and we will work out the details and you will never be able to get rid of it. By the way, 100% of voter ID laws have been driven by…drumroll please…Karl Rove. Never trusted a man name Carl that spelled it with a ‘K’.

      …or the ref at the divisional playoffs who missed that call at second base…could have altered the outcome, but since TB is a Giants fan, all’s well that ends well! LOL

      Yarnman…just when TB is about to throw in the towel you come through…you rock, Yarnman!
      TB

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