11/12/12…on the fourth day of Veteran’s

TB’s Quote of the Day: “The most effective deterrent to financial crime is criminal prosecution and jail time.” Ben Wogsland, Minnesota Attorney General’s office, how about that for a concept? Eh, Congress? Attorney General? President Obama. It doesn’t even matter if there isn’t enough evidence to convict, the humiliation would help deter.

 

Bloomberg Quote of the Day: “

 

This week’s holiday-shortened economic calendar is still quite full with an emphasis on inflation and the manufacturing sector. However, the highlight of the week will be October Retail Sales (Wednesday). We will also get the October Treasury Budget (Tuesday), the October PPI and September Business Inventories (Wednesday), the October CPI, the November Empire State Manufacturing Survey, and the November Philadelphia Fed Survey (Thursday), and October Industrial Production (Friday). In addition to the economic data, the Federal Reserve will release the minutes to the October 23rd – 24th FOMC meeting (Wednesday).

Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA

 

Bloomberg Top Stories:

 

*Metals Climb on china Export Data as Stocks fluctuate Before Greece Talks

*Pimco-to-DWS See Economy Beating Fiscal Cliff as Equities Lose $1 Trillion!

*Greece Nears EU Finance Agreement After Passing Austerity Budget for 2013

*U.S. Oil Production On Track to Surpass Saudi Arabia’s by 2020, IEA Says (another blunder of Team Romney, by misrepresenting facts on oil, natural gas, and coal)

*Goldman Sachs Says Beware Europe Peripheral Stocks Rising Most Since 2007 – TB says beware of GS and other financial stocks…not enough dividends!

*Americans in Crisis Says Europe Lesson Means Act Now as Austerity Will Fail

*Lawmakers to Probe FBI Handling of Petraeus Affair That Led to Resignation – sad!

*BBC News Chiefs Step Aside After Entwistle Departure Over Program on Abuse

*Americans Favoring ‘Regualators in chief’ Seen in History for President Obama

 

 

Friday marked a very dull trading session that was mixed. Seems like everone (who was there) just wanted to get through it. Utilities slammed again for the fourth time in five  sessions for a net loss of 6.6%! NYSE Financials were little changed but loss for the week were all over 4%. Total NYSE volume slipped to 3.57B vs 3.76B vs 4.32B shares. Floor volume also slipped back to 740M vs 758M shares vs 874M, highest since 10/19!

Bond market held on to overnight gains and is closed today: 10 yr note  30 year 1.61%, 30 year 2.74%. Libor is steady overnight.

Gold closed slightly higher with a slight new high of $1739 intraday, highest since 10/19. Crude on the other hand was up almost a dollar on a positive ‘key reversal’ (higher high lower low, close above prior day’s high, following an ‘inside day’ a day after a low of $84.05, lowest since 7/11. The recent selloff was triggered by a negative key reversal.

– – –  . . .  – – –

…yep, on Friday, TB was a guest at a Vets Day ceremony at his grandson’s school. A very nice one. Besides the vets, TB noticed a young woman in an Army uniform. She hade two children at the school. TB went up to her to thank her for her service adding: “we had a commitment…you made a commitment…that is a far greater thing.”

On Saturday thru today, there have been numerous ‘gifts’ for vets here in Minnesota, unlike California: free car washes, lunches and dinners for free or at 50% discounts (McCormick and Schmick’s for one!). With TB at least, they made up for it as five of us went to dinner, three paying but we made up for it with drinks, oysters, and desserts.)

Think of those who gave their lives, and limbs today for those of you who have the day off because of it. Especially the current National Guard and Reservists who have suffered the most, having their families torn apart – repeatedly for three month periods or more – and their careers impeded…and for what? A war that was not supposed to be a war but a mission to get Osama Bin Laden…and then the Bushie’s threw in Iraq for good measure. How come we never discuss what this did to the budget deficit…while they were doing worse then LBJ: he gave us guns and butter, they gave us guns and of all things, tax cuts! Mission accomplished!

TB was shocked at all were at the Petraeus scandal. Despite complaints from Congressional ‘leaders’ that they should have been informed, it was handled properly, The normally conservative Peggy Noonan even said, “what is the risk now it is out? We are losing a great leader. Wish the rest of the conservatives could speak without casting the first stone. Rajiv Chandrasekeran, writing in the Washington Post, provided a very good bio of Petraeus…he had been embedded with him when he was just a ‘two-star.’ (House Majority Leader Eric Cantor says that  he knew of the investigation on Oct. 31, having received a call from a GOP Congressman. Note he said nothing. Imagine if the House Intelligence (sic) Committee had been informed. Michele Bachmann blabbing all over the airways. To do so would only have been to discredit the president. TB is not a fan of Cantor…far from it…but he used sound judgement in not announcing it and in comng forward now.

Meanwhile the hearings start this week on Benghazi, which apparently Petraeus took some responsibility for. He is no longer to testify which will only stoke the GOP fires. But what can we expect from a party that insisted on calling it an ‘embassy’ rather than what it was, a ‘mission’ 400 miles away from the capitol!

TB has little confidence that the GOP ‘leadership’ will do anything more than snap the olive branch they extended. They were humiliated…hoisted on their own petard, so to speak…as they were 100% confident of total victory. Gingrich predicted at least 300 electoral votes…he was right but for the wrong man! Boehner extended an olive branch then snapped it with ‘no tax increases.’ Expect more opposition from McConnell who is up for election in two years with three other GOP Senate leaders…he will be out!

Think of the ignorance expressed there…we have Obamacare…they have worse. In his acceptance speech Romney again cited eliminating Obamacare on his first day in office. We have government regulation, they have worse. Good luck and good riddance!

If you saw 60 Minutes last night you now know why Romney didn’t give details of his jobs program: it was a myth. Remember him praising Americans who lost a $22,000 a year job but got TWO $9,000 a year jobs – without benefits! But in interviews with companies they said they had lots of unfilled jobs but no qualified candidates. It then talked about a program that cost $60,000 to train 20 people who had the smarts. That is just $3,000 per student and they are getting snapped up on graduation. But that is for a job paying $12,000 a year…for skilled labor? Meanwhile those in the financial sector make hundreds of thousands of dollars and complain! You don’t have to look far to see what is wrong with our economy…and it isn’t the government.

Then there is the study that says the Obama tax increases will cause small businesses to shed 700,000 jobs. Really? Perhaps the Heritage Institute and Hoover Institute need to retake Econ 101…marginal income? Owners do not shrink their business AND their own incomes because of higher taxes so long as they get too keep more than half their income.

We are Americans living in the greatest country in the world yet what was the point of the last election? To make the rich…well, richer…great – in the short run! Stop blaming Obama as divisive for discussing the Wealth Gap. It is a fact as is the fact that it has been known to bring down entire governments…French Revolution, Russian Revolution, etc. But fortunately we have a country that was designed to prevent violent upheavals. Too bad the GOP, TB’s former party, along with many of his friends, doesn’t get it.

In 2004, 78% of voters where white…just eight years later that has shrunk to 72% – a sharp decline in a very short period of time and it will accelerate as more latinos turn 18. TB warned of this yet the GOP is becoming the party of grumpy old men, the wealthy and those who for some reasons feel obligated to enrich them further, which is totally bizarre.

“Popular vote totals at the time of his tweet showed Republican presidential candidate Mitt Romney with a narrow lead over Obama, with votes still left to count. Obama later took a lead in the popular vote as well.

In a later tweet, Trump called the Electoral College, which allowed observers to call the election for Obama at around 11:12 p.m. on Tuesday night, a “disaster for a democracy.”

Twelve years ago, many Democrats would have likely agreed, as a hotly contested race in Florida gave the 2000 presidential election to Republican George W. Bush, who lost the popular vote.

It remains to be seen whether Trump has had an honest revelation in favor of electoral reform or is simply upset that Obama’s victory deprived him of an opportunity to tweet “You’re Fired!” on Tuesday night.

Trump has vocally opposed Obama throughout the president’s reelection campaign, including making repeated requests for his birth certificate and other documents.

UPDATE — 11/7: Trump later deleted many of his most inflammatory tweets. They have been preserved above.” Huffington Post

“Victoria Jackson hasn’t exactly been a beacon of rational political analysis, but her post-election meltdown on Twitter may take the cake. After Barack Obama was declared the winner, the former “SNL” castmember proclaimed that America had “died.”

For context, Jackson is the actress who proclaimed that she would have a baby if impregnated through rape, uncovered a “secret, underground group” of Hollywood Republicans and said gay marriage would “make God mad.” Huffington Post

“On the immigration issue, which turned out to be very important, and some issues about women too, some mixed messages were sent,” she said Friday on CBS’ “This Morning. “And when you send mixed messages through the narrow funnel that is the media spotlight sometimes people hear only one side of that message.”

“Right now for me the most powerful argument is that the changing demographics in the country really necessitates an even bigger tent for the Republican Party,” she said.

Said Rice, “But when you look at the composition of the electorate, clearly we are losing important segments of that electorate and what we have to do is to appeal to those people not as identity groups but understanding that if you can get the identity issue out of the way then you can appeal on the broader issues that all americans share concerns for.”

You can spin it any way you like but the fact is they treated latinos and unmarried women with contempt. Throw in the blacks to thanks to those Karl Rove led propositions (in MN an amendment) on Voter ID. That and gay marriage backfired – horribly – as it brought out rational people in droves…the ones they had counted on to vote Team Romney.

TB has little faith that the two parties can work together other than kick the can down the road for now as it would harm the interests of both parties (especially those who put up hundreds of millions in this attack ads, right?). It IS all about control and power and money. Greed is simply a by-product.

One last thing: as TB has learned, PBS (and NPR) are much more than ‘Big Bird.’ They are the one source of information in this country that is reliable. Let’s assume the liberal bias…but they present both sides with knowledgeable people who don’t call people ‘retards’ or worse. Yesterday, TB combed the programming and guess what: the only Vets day commemoration was on PBS. First, an hour on Viet Nam stories, and then the two hour memorial from the Capitol. Not one privately-owned station had anything being much more concerned about all those Pro Football games, and The Great Race. Time to stop criticizing them and consider the valuable information they provide…such as the nightly NEWS! They are also the only media with reporters in every capitol. Ah, but you have FOX and MSNBC…better they match your opinion than for you to get facts.

Have a reflective day!

TB

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

Volume dipped slightly on a mixed session that provided no new information. Dow Utilities have now been down 5 of last 6 sessions, regardless of whether broad market is up or down. Volume 3.57B shares vs 3.76B vs 4.32B vs 3.3B vs 2.91B vs 3.2B vs 3.61B vs 3.9B vs 3.56B. On 9/1 volume hit 4.56B shares, high of the year. NYSE stocks executed without the aid of the ETN market were also slightly lower at 740M shares vs 758M vs 874M, highest since 10/19. 9/15’s 464M shares was the lowest since 11/25/11! There have been just 14 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 15 sessions have surpassed 800M shares, mostly down days. The average since 8/1’s 1.03B is just 673B. The average for 2012 is just 770M shares and since 6/29 just 697M shares– WEAK!!! 111 of the last 152 sessions have been less than 800M shares (73%!). Since 2/29 there have been just 24 ‘average’ days (mostly down!), including 9/21’s high for 2012 of 1.8B (5B including ETNs) and just 20 have been above 900M – 782M 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 65 sessions less than 700M shares. 229 of the last 247 sessions have been less than the 12 mo ave (93%)!

Advance/Declines were about even – no conviction? -1.1x vs -2.7x vs -4.3x!!! vs +2.5x vs +1.1x on NYSE and 1:1 vs -2.8x vs -5.7x!!! vs +1.9x vs +1.5x on Nasdaq. Breadth was similar but mixed: NYSE: +1.1x vs -3.4x! vs -9.8x!!! vs +4x! vs +1.1x on NYSE and -1.1x vs -3.8x! vs -7.6x!!! vs +1.6x vs +2.2x on Nasdaq. New 52 week highs were slightly lower at 99 vs 115 vs 108 vs 216 vs 113; (768 is cycle high). New lows however rose to 244 vs 215 vs 196 vs 69 vs 97 vs 101, recent low was 48. The ratio is negative for a third straight day: -2.5x vs -1.9x vs -1.8x vs +3x vs +1.1x, recent high was +7x! The S&P VIX was little changed at 18.61 vs 18.49 vs 19.06 +.12. 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 FLAT vs -0.9% vs -2.4% vs +1% vs +0.2%; Dow Transports -0.7% vs -1% vs -1.9% vs +1.6% vs +0.3%;Dow Utilities -0.7% vs -0.2% vs -2.2% vs flat vs -1.6%; S&P 500 +0.2% vs -1.2% vs -2.4% vs +0.8% vs +0.2%; Nasdaq Composite +0.3% vs -1.4% vs -2.5% vs +0.4% vs +0.6%; Nasdaq 100 +0.5% vs -1.5% vs -2.6% vs +0.3% vs +0.6%; Russell 2000 +0.2% vs -1.4% vs -2.6% vs +0.7% vs +0.6%; NYSE Financials +0.1% vs -0.9% vs -2.7% vs +1% vs -0.2% (KBW Banks +0.1% vs -0.6% vs -4.6% vs +1.5% vs -0.3%; Nasdaq Banks +0.2% vs -1.1% vs -3.5% vs +1.3% vs +0.1%; NYSE Brokers -0.6% vs -0.9% vs -4.3% vs +0.8% vs +0.8%.NYSE Financial Leaders: BAC +0.4% vs +2.6%? vs -6.3%!!! vs +2% vs -1%, no other leaders.; For  the week: BAC -4.3%; C -4.4%; JPM -4.2%; WFC -4.1%; USB -4.-%; GS -5.8%; MS -6.6%!; UBS -0.5% -new rally high 11/6 $15.73, -4.2% since. Please trust TB that the dividends in financials are not commensurate with the risk! Got it?

JCP was off 4.8% on the much higher than expected loss: 97 cents vs 7 cents!

Global equities mixed: FTSE +0.3% vs -0.4% vs +0.2% vs +0.3% vs +0.5%; CAC 40 -0.2% vs -0.2% vs +0.7% vs +0.5% vs +0.3%; DAX +0.3% vs -0.9%! vs +0.4% vs +0.4% vs +0.5%;Nikkei -0.9%! vs -0.9%! vs -1.5%! vs flat vs -0.4%; Hang Seng +0.2% vs -0.9% vs -2.4%!!! vs +0.7% vs -0.3%; Korean KOSPI -0.2% vs -0.5% vs -1.2%! vs +0.5% vs +1.1%!;Indian Sensex -0.1% vs -0.9% vs -0.3% vs +0.5% vs +0.3%. U.S. stock futures higher: DOW +42; SPX +4.50; NDQ +13.

U.S. treasury bonds closed slightly weaker after two straight up days, closed today: 10 yr 1.61% vs 1.59% – record low of 1.40%; 30 yr 2.74% vs 2.73%. Long TIP 0.26% vs 0.22% which took out 0.28% as the record low!The 5 yr TIP yields -1.48% vs -1.49%; 10 yr -.87% vs 0.90%.T-Bills: 0.12% 1 month; 0.09% 3 months; 0.14% 6 months. Reverse Repo 0.28%. 3 mo. Libor 0.31%; 6 mo. 0.53%. On 9/18 they were 0.38% and 0.67% respectively. European problem sovereign 10 years, Germany-bench: 1.35% +1; Japan 0.73% -1; Italy 5.00% +4; Spain 5.84% +4; Greece 17.57% vs 17.46% -1…on 9/20: 19.75%!!!; Portugal 8.59% +4; Ireland 4.65% +1.

Gold intraday high $1739.40, highest since 10/19, closed at $1730.90 +$4.90. At the high it was near the 50 day moving average which was last visited on August 15th! It closed at $1796 on 10/4, highest since 2/29 and it has lost $65 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 $1742, the 50 day, $1746, the 40 day, nearing a cross.MAJOR SUP at $1671, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1737.20 +6.30. Crude closed higher at $86.07 +.98 on a ‘key reversal’ (higher high, lower low, close above prior day’s high), the last time this happened it was a negative one which brought us all the way back down to an intraday low of $84.05, lowest since 7/11 and way below the 40/50/200 day where it has resided since 9/19! RES at the 40 day (89.70), 50 day (91.10), and the 200 day (94.66), all falling! Overnight it is $85.48 -.59. Minor support at $83.65, then $77.28, the 2012 low!!!

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