11/1/12…4 more days; who will decide the election?

Bloomberg Quote of the Day: “I hope life isn’t a big joke, because I don’t get it.”

– Jack Handey

Reminds TB of a quote TB’s son penned years ago: “I don’t care if the glass is half empty or half full…all I want to know is if they have free refills.”

Bloomberg Top Stories:

*Productivity in U.S. Rose 1.9% in Q3, Labor Costs Dropped 0.1% – see below

*London Frets Future as Financial Hub With U.K. Outside European Bank Union

*Stocks Rise on Earnings as Metals Gain After China Factory Output Report – please!

*China Manufacturing Gains for First Time in Three Months on Rebound Signs

*Pimco’s Gross Says Low Interest Rates Fueling Consumption, Not Growth – AGREE!!!

*Global Regulators Planning to Reduce List of Too-Big-To-Fail Banks to 28 -!?!

(28 ‘gotta have’ banks? Then the regulations aren’t strict enough. More bailouts! TB)

*Barclay’s Energy –Market Trading Draw Record $470 Million Penalty in U.S.

(Barclays who led Libor fixing? % of gain? Record fine? Great, shareholders pay it!)

*Exxon Quarterly Profit Declines as Slowing Demand Growth cuts Crude Prices

(Slowing? It was never there…only Iran risk and speculation! Just like in ‘08!)

Chrysler’s October U.S. Sales Rise 10% Evan as Sandy Hits at Busiest Time

(Romney way off base saying Obama letting them build Jeeps in China sell here!)

*Commodities Fall Most Since May as October Proves Dead Month for Investors – duh!  

*Draghi-Geithner No Show Risks Turnig Mexico City G-20 Meeting Into Flop – !!!

*Bernanke as Depression Guru Steers Fed to Roosevelt’s Economic Well-Being

(Huh? Case is still open! Ah but if Romney gets it, Glenn Hubbard will save us – not!)

*Pfizer to buy Back Up to $10 Billion of Shares, Narrows Forecast Range – see if you can’t make the numbers, buy back the stock and throw more money away!

*Sandy Leaves Corporate Bond Trading Struggling to Return – you bet it is!

*ConEd Says All of Manhattan Is Expected Back Friday/Saturday…but:

*Morgan Stanley to AIG Face Weeks Without Flooded Lower Manhattan Offices

Productivity rose 1.9% BUT labor costs rose. With incomes of workers going nowhere this is what we DON’T need to stimulate economy. Who is going to buy all those products if they aren’t earning more and haven’t for more than a decade? Answer that Mitt…will it be all those investment bankers and traders who will buy it?

Weekly Jobless Claims fell 9k last week to 363k…no biggie…many couldn’t file because of Sandy. Meanwhile total benefits rose by 4k and extended and emergency benefits roe by 47k to 2.13 million. Ah companies making more, workers earning less, more long-term unemployed…yep, Obama must be manipulating numbers. If so, a bad job of it!

That headline on China should make you ask: why should I believe them? They, unlike here despite Jack Welch’s accusations, manipulate their numbers…especially now when they have to reorganize the government…not an election…and in the wake of their leaders having a net worth of over $2.5 billion, thanks to great investigative reporting by a U.S. reporter! Guess a capitalist/communist form of government doesn’t work. Also, the other headline on stocks rising is a myth…Dow futures are up slightly after being off 25 points before the report. Nasdaq was off 12 and is now up 6. This is the second time this week the headline has been misleading – both times inflating it!

Stocks markets were open after being closed for two days due to Sandy – first time since 1888! It was a mixed session with the Dow barely up, S&P flat, both Nasdaq indices down, and Russell 2000 up and best sector? Volume was weak but normal in the ETN’s and very weak all day on the NYSE floor for obvious reasons. Ten minutes prior to the close it stood at just 562 million shares then surged to 853M by the close…BUT it was monthend and the index funds had to rebalance. Bond market rallied with the long bond up ½., but gave it up overnight. Greek bonds 17.69% up .39!!! Payrolls on Friday~!  Gold and Crude were mixed and little changed; Gold up slightly overnight, not so for Crude which is trading about even.

– – –  . . .  – – –

…will it be you? TB? Ohio? The Electoral College with a minority for the ultimate winner? Will there be a proclaimed winner? Will it be a tie and if so the House will pick the president and the Senate the V.P. Imagine a Romney/Biden team, or will the GOP filibuster? LOL Anything that is unsettled by Tuesday night will be very harmful to an already weak economy that is growing at the pace of a wounded snail.

Before we go further TB wants to apologize once again for the length of yesterday’s column. That is what happens when one is forced to defend a position and worse to prove that it is not an ideological stand. Hope you understood.

As for the Frontline segment last night, here is a link and hope you will watch it and then check the source of any inflammatory pieces against someone. The Supreme Court erred badly in Citizens United…and on political leaning. Ask Sandra Day O’Connor! They then compounded it with their decision that a state could not control the source of money to a state or local campaign tossing out a law that had served Montanan’s for 100 years.

The first decision applied to SuperPacs. The second to 501(C) 4’s which unlike Pacs do not require disclosure of who is funding them. You can thank attorney James Bopp for this. Listen to his answers defending the first amendment…do you think the founding fathers intended that someone should be able to influence an election while hiding behind anonymity? It is totally irrational. Furthermore, Bopp sees no problem with anything the 501(C)4’s are doing…and that scares TB even more! This is the kind of man who would destroy America on flawed logic and has the power to convince the Supreme Court he is right on ideological grounds? Here is the link…please watch it and note the other stories on the page: Big Sky, Big Money  Remember: this is MONTANA!!! Who gives a damn about Montana outside of the residents? Why should they be held hostage to someone determined to drive good government away and replace it with those spreading their message. Jefferson was right: “the price of freedom is eternal vigilance”…and as Joe McCarthy proved the most subtle and effective threat comes from within. Remember just because one of these groups matches your beliefs, the next one may not and it is all about the money coming from undisclosed individuals and corporations. Scary!!!

Enough about TB. Here is a letter from a friend and respected member of the business community:

As we get close to the end it is interesting to speculate about how Romney would function as President. We know how Obama functions.

Romney is a businessman, as he so proudly announces continuously. More importantly he was a consultant and a private equity investor. Both of these will have a major impact on him and how he functions. To claim that he knows how to create jobs is a bit of a stretch. As a businessman and particularly as a private equity investor, his first and almost exclusive motivation is to make money. He does not think in terms of creating jobs. In fact in his view people are his biggest expense and the thing which must be controlled. He is interested in getting the maximum productivity from the fewest people.

As a consultant he has some basic underlying principles that guide him. But his real task is helping his client execute their plan, not his plan based on his basic beliefs. This is why you see him changing his position on issues. His background is to go with the flow, to execute what his client wants. He will be more of a pole watcher than Obama. His willingness to change positions may help him “work across the aisle” but at some point during this process he will have to establish a core position. Can he do this after all of these years of not doing as a consultant.

As a CEO he will have been surrounded by “yes men” to use a bad phrase. CEO’s do not tolerate strong opposition. They will listen to opposing positions for only so long. For them to be successful they need to surround themselves with people who will do what they say. Yes a president must have a loyal staff but he also needs to surround himself with strong personalities. As President he lives in a shell, he needs people who will call him out. It is not like being CEO. Ryan is a good example of the kind of people Romney will surround himself with. A technocrat, a numbers guy.

Sadly, Obama made some of the same mistakes such as surrounding himself with the wrong people and trusting their flawed, short-sighted judgment. Obama also does not see himself as a politician but a leader and thus did not want to ‘mingle’ with members of Congress which was the key to the great President’s success. Romney’s ability to ‘reach across the aisle’ will be restricted as the Dems in the Senate use the same filibuster techniques as the GOP did and as frequently. They may not say ‘anyone but Romney’ but they will not want him to get ‘four more years’ – unless it is in federal prison (joke!).

TB likes Bill Moyers investigating reporting. Here is his expose of Ralph Reed and his increasing control of the GOP. Bill Moyers/Ralph Reed Note that Reed who was closely associated with convicted felon Jack Abramoff, started Karl Rove and Grover Norquist on their career paths. TB didn’t know he was a Morman but since 4 of 5 envangelicals do not trust Mormons Romney has embraced Reed and his 501(C)4! TB now knows what happened to his party, the GOP, that caused him to leave it. It is totally sickening! What has occurred is reminiscent of Mike Milken and Ivan Boesky’s Predators Ball. Oh, and TB was wrong…very wrong about Grover Norquist being a true believer. He is a crook!

What was funny is that Reed and Abramoff called their Christian Right supporters ‘wacko’s’ – the same thing they call those on the left! Hmmm. Just give me the money!

Have a great day and hopefully those of you in the Northeast will be able to resume your lives soon. Our thoughts and prayers are with you.

TB

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

Volume rose after being closed for two days but remains well below average: 3.56B…vs…3.28B vs 3.5B. On 9/1 volume hit 4.56B shares, high of the year. NYSE stocks executed without the aid of the ETN market were very low until 10 minutes before the close when they were just 562M but finished at 853M…vs…719M vs 696M. 9/15’s 464M shares was the lowest since 11/25/11! There have been just ten 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 14 sessions have surpassed 800M shares. The average since 8/1’s 1.03B is just 672M. The average for 2012 is just 771M shares and since 6/29 just 693M shares– WEAK!!! 105 of the last 145 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 – 791M is the 12 month average. 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. 224 of the last 240 sessions have been less than the 12 mo ave (94%)!

Advance/Declines turned modestly positive: +1.4x…vs…-1.4x vs +1.5x vs -1.3x vs -2.7x on NYSE and +1.2x…vs…-1.4x vs +1.4x vs -1.3x vs -1.8x on Nasdaq. Breadth was weak and mixed: +1.3x…vs…-2.6x vs +1.2x vs -2x vs -7.5x on NYSE and -1.4x!…vs…-1.1x vs +1.1x vs -1.5x vs -1.7x on Nasdaq. New 52 week highs doubled  to 225 vs 117 vs 151 vs 110 vs 67 vs 97 vs 177 vs 330 vs 363 (768 is cycle high). New lows also rose to 137 vs 99 vs 103 vs 107 vs  143 vs 95 vs 121! vs 54 vs 48. The ratio is: +1.6x vs +1.2:1 vs +1.5x vs 1:1 vs -2.1x! vs  -1:1 vs +1.5x vs +6x vs +7x. The S&P VIX, surged by 4.4% to 18.60 vs 17.81 vs 18.12 +.79, very 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 -0.1%…vs…flat vs +0.2% vs -0.2% vs -1.8%; Dow Transports +0.7%…vs…+0.3% vs +0.6% vs -2% vs +0.9%;Dow Utilities +0.8%!…vs…-0.1% vs +0.4% vs -0.7% vs -0.9%; S&P 500 FLAT…vs…-0.1% vs +0.3% vs -0.3% vs -1.4%; Nasdaq Composite -0.4%…vs…+0.1% vs +0.2% vs -0.3% vs -0.9%; Nasdaq 100 -0.7%!…vs…+0.3% vs +0.1% vs -0.4% vs -1.1%; Russell 2000 UP 0.7%!…vs…-0.4%! vs +0.4% vs -0.3% vs -0.5%; NYSE Financials +0.8% vs -0.6% vs +0.3% vs flat vs -1.7% (KBW Banks +0.7%…vs…-0.9% vs +0.6% vs -0.3% vs -1.3%; Nasdaq Banks +0.3%…vs…-0.6% vs +0.8% vs flat vs -0.5%; NYSE Brokers +0.6% …vs…-0.1% vs +1.4% vs +0.3% vs -1.3%. NYSE Financial Leaders: BAC +2.2%…vs…-1.2%! vs -0.8% vs -0.6% vs -1.9% – no other leaders for a FOURTH session, but here are the changes since last Friday; C+2.1%; JPM +1.3%; WFC -0.8%!; USB +0.2%; GS +2.4%; MS +2%; UBS +13.9%!!! and a new 12 month high??? Huh???

Global equities up on China manufacturing (?), sans Korea! FTSE +0.6% vs -1.2% vs +0.8% vs -0.5% vs flat; CAC 40 +0.6% vs -0.9% vs +1.4% vs -1% vs +0.7%; DAX +0.7% vs -0.3% vs +1% vs -0.6% vs +0.5%;Nikkei +0.2% vs +1% vs -1% vs flat vs -1.4%; Hang Seng +0.8% vs +1% vs -0.4% vs -0.2% vs -1.2%; Korean KOSPI -1.3%! vs +0.7% vs +0.4% vs flat vs -1.7%;Indian Sensex +0.3% vs +0.4% vs -1.1% vs +0.1% vs -0.7% vs +0.3%. U.S. stock futures coming back from being down early : DOW +13 vs -25; SPX +0.70 vs -8; NDQ +8.25 vs -13. Wonder how it will play out today?

U.S. treasury bonds rallied on Thursday, giving it back o/n: 10 yr 1.72% -1/4 – record low of 1.40%; 30 yr 2.89% -9/16. Long TIP 0.35% -11/16. 0.28% is record low!The 5 yr TIP yields -1.45%; 10 yr -.80% – both widening!Bills 0.07% 1 month; 0.09% 3 months; 0.15% 6 months. Reverse Repo 0.55%!!! 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 1.47% +1; Japan 0.77% +1; Italy 4.90% -4; Spain 5.56% -3; Greece 17.69%! +39!!!…on 9/20: 19.75%!!!; Portugal 7.97% +1;Ireland 4.63% +3.

Gold closed up after being little changed for two days and closed at $1719.10 +$7. 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 $79 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 $1731, the 50 day, $1750, the 40 day.MAJOR SUP at $1670, the 200 day. CAUTION!!! 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1724.80 +$5.70. Last Wednesday’s low was $1704.60! Crude closed up slightly but about even for the last three session at $86.24 +.56. Last 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 (92.39), 50 day (93.12), and the 200 day (95.34). Overnight it is $86.47 +.23….zzzzzzz.

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