11/19/12…hi, I’m Cliff…

Bloomberg Quote of the Day: “Things do not change, we do.” – Henry David Thoreau

…or not, right folks? Also reminds TB of this: “God grant me the serenity to accept the things I cannot change, the courage to change the things I can change, and he wisdom to know the difference.” Those are great words to live by…as many people do.

This week’s holiday-shortened economic calendar is quite light on data releases. The highlight of the week will be Thanksgiving Day (Thursday), an opportunity to reflect on our many blessings. We will also get October Existing Home Sales (Monday), October Housing Starts (Tuesday), and the final November Consumer Sentiment and October Leading Indicators (Wednesday). There are no data releases scheduled for Thursday or Friday. Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA.

Bloomberg Top Stories:

*Stocks Rise on Outlook for Averting Fiscal Cliff; Dollar, Treasuries Rise – bull roar!

*Euro Finance Officials Meet to Jump-Start Agreement on Bailout for Greece – yawn!

*Bull Market Cheapest Since Reagan as Stocks Trade 26% Below Historic peak – but…

*Spain’s $264 billon Borrowing Need Will Defeat Aid Reticence – get real, folks!

*Treasuries Lure Double Foreign Buying Even After China Cuts $123 Billion

*Intel CEO Paul Ottini to Retire in May…don’t worry folks, he will be taken care of

*GDP Seen Accelerating to 2.9% Helping U.S. Overcome Hurricane-Budget Woes – oh?

*Hostess Asks Court to Approve Closure, Executive Bonuses as Bidders Circle – see???

*Hedge Funds Cut Bullish Commodities Wagers in Longest Retreat Since 2008 – !!!

*Wall Street Never Stopped Winning on Mortgages Upending American Homeowner

(yet where is YOUR anger…how come management is the same…thieves and worse! TB)

Admit it…we were set up…by the high freak traders on election eve who ran stocks up on low volume despite not having a clue who would win and even if they did pushing the Fiscal Cliff to the back burner. Nice. Perhaps they also were as confident of victory as Team Romney which ignores that fact that the stock market has consistently done better under a GOP Congress and a Democrat President. Since 2008 this has proven to be the case again…of course we were coming off an incredible low following the crisis. All stock indices except Dow Transports (-0.5%?) were UP, including the weak Dow Utilities which rose 1.2% to take the honors but is still off 5.7% over the past two weeks with just TWO up days! Total NYSE volume rose slightly to 4.0B vs 3.9B shares. Floor volume surged to 944M, highest since 10/19, vs 800M shares – coming back from 292M shares (the new 12 month low). Advance/declines and breadth were positive again.

Bond market is off overnight after a slightly weak session on Friday: 10 yr note 1.61% -1/4, 30 year 2.76% -1/2.  3 mo. Libor steady at 0.31% and the 6 mo. 0.52%.

Gold closed little changed at $1714.70 +.90, but is up nearly $10 overnight. Crude closes up over a dollar and is up by a similar amount overnight to $87.98 ….still weak, but…

– – –  . . .  – – –

…Fiscal Cliff…drop over sometime.  Although some experts say it is more of a steep slope. Manageable but difficult, IF that is the two parties can put away their petty differences, which as of now seems to be the major problem. Today we are going to discuss why the two parties will agree to revisit the Cliff next year with no meaningful agreement on anything.

The GOP (Grouchy Old Pols?), created the Fiscal Cliff by letting it’s right wing extremist seize control while the adults stood idly by. They were assisted by Grover Norquist who kindly pointed out that ‘no tax increases’ pledge that they signed like sheep…thankfully he didn’t add a requirement to always have a balanced budget even when the financial sector caused pain to millions of Americans…because they would have done that too.

Then came the Simpson-Bowles Commission which Obama created. It had some good ideas…some overreaching…and was nixed by every GOP member including Paul Ryan, who then had the audacity to claim it as his when all evidence was to the contrary. Meanwhile, when the report was to be delivered to the White House, Obama had left the office…and the country leaving it to Biden to receive it. This doomed it as he should have taken it and challenged Congress to fix the problems using it as a framework. Why? For the simple reason that any President with a contentious Congress would do: nothing was going to change and he would lose face as they did to him every chance they had. The GOP refused to even support him on the birth certificate not to mention the false statements about the deficit being due to his actions. Sorry, leadership? MIA!

Next year there may be some agreement but to do so now would disappoint too many backers on both sides, making both parties look weak and that is something neither can tolerate.

What kind of leader will Obama be in this, his final term? Like all second term presidents it is his legacy that will preoccupy him and that means he doesn’t have to listen to his own party’s radicals or the GOP reactionaries. If he fails, he will go down as a very bad president who failed in his objective to change government…even if he didn’t know how he was going to do it (per Lawrence Lessig).

He has to change the format of his speeches though from the ‘feel good’ ones he gave, especially in the first two years of his last term…you know, the ones where you tuned in to learn something then tuned out when it became blah, blah, blah. These morphed into the ‘evangelical’ sounding ones of the campaign. Take control…tell Congress what you expect of them and nail them when they let their partisan bickering keep them from conducting the peoples business. That is your only hope of establishing a legacy!

In addition to the six year, single term presidency TB advocates, we should have a mandatory retirement for Congress at age 70 or at the end of the term during which that occurs.  If TB had his way there would also be no retirement for Congress…none, zip! That would have been abhorred by the framers of the Constitution just as they opposed senators staying in office forever. Here is something bipartisan: Nancy Pelosi and Mitch McConnell should go. They are an obstacle to change…and John Boehner too as he has shown an inability to control his own party’s constituents. But please don’t replace him with the divisive Eric Cantor. Redistricting should be taken away from the two parties and turned over to judges from each state…no federal control! That is why even a Michele Bachmann can get re-elected but only after outspending her opponent by 12:1 (and he used a substantial amount of his own money). Even so she won by a few hundred votes. If the GOP is serious about doing the right thing she should be unceremoniously removed from the House Permanent Intelligence (sic) Committee. They have cause!

Nothing characterizes the lack of change more than the Benghazi hearings and the defamation of Susan Rice by Senators McCain and Graham. Where were they when Colin Powell was given misinformation…disinformation…about WMD in Iraq and made a fool of himself? Also, Powell was Secretary of State while Rice is merely Ambassador to the United Nations. Gen. Petraeus even defended her but it fell on deaf ears as McCain called her, not smart enough to be Sec. of State…despite her being a Rhodes Scholar. Ah, but McCain said the war, which he supported and said would support even if there were no WMD’s, was caused by Colin Powel…THIS year, not then!

TB has had serious doubts about this man, who he thought of as a hero, since he chose Sarah Palin as his running mate over the objections of his advisors. He was critical of not being briefed by the Administration on Benghazi, then missed the first closed-door briefing while holding a press conference railing about not being briefed and about Rice!

The GOP is at war with itself and everyone is critical of everyone else…especially after Romney failed to accept any of the blame for the defeat…despite his 47% remarks and exclusion of blacks and latinos! Despite his calling for across the board tax cuts without specifying them except to say he would increase defense even though it wasn’t requested by the military. Gov. Romney THAT is why you got beaten…not your trumped up (pun) charge of Obama buying the presidency…yes, your political career is over, and its on you!

No one is without blame but it is the GOP that has become the party of ‘hate’ and of, by, and for the wealthy. That is why they lost TB even though he will never be a Democrat.

What we all could do is change our status from EITHER party to INDEPENDENT. Both have failed us miserably and they only go after the independents vote…party faithful be damned! Ah but the suck up to the Christian Right with their anti-gay, anti-abortion stance – who are they to tell any of us what we can or cannot do?

Gee, TB sounds angry…damn right he is…and you should be too. Since the election TB has heard from just two Romney supporters, both saying we are going to hell in a handbasket. Perhaps so, but the GOP helped load that basket…and it started with Newt Gingrich and his henchman, Tom DeLay…under the guise of Reagan who would have condemned their actions, not praised them. George H.W. Bush also had no use for the neo-cons yet was a supporter of Reagan. Republicans, you don’t have very far to look as to why you lost the elections. Listen to Gov. Christy…who would make an excellent candidate in 2016 were it not that he alienated his party by telling the truth about FEMA.

GOP’er’s…tell TB he is wrong…no skin off him…but be warned he will bury you with facts, not ideology…remember he is not a Dem either, just a free-thinking American.

Woe is us…tomorrow some corporate shenanigans…they (we) never learn, do we?

Hope you have a great holiday-shortened week…especially Thanksgiving!


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

Volume climbed back to 4B shares vs 3.9B shares. All indices were up. except Dow Transports which fell 0.5% while Dow Utilities, which had been down 8 of the last 9 sessions, rose 1.2%…mostly late in the session. NYSE stocks executed without the aid of the ETN market roared back to 944M vs 800M, highest since 10/19. There have been just 17 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 17 sessions have surpassed 800M shares, mostly down days. The average since 8/1’s 1.03B is just 681B. The average for 2012 is just 768M shares and since 6/29 just 698M shares– WEAK!!! 114 of the last 157 sessions have been less than 800M shares (73%!). Since 2/29 there have been just 26 ‘average’ days (mostly down!), including 9/21’s high for 2012 of 1.8B (5B including ETNs) and just 21 have been above 900M – 779M 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 67 sessions less than 700M shares. 230 of the last 252 sessions have been less than the 12 mo ave (91%)!

Advance/Declines were positive after SIX negative sessions: +2.9x vs -2.1x vs -8.8x!!! vs -1.1x vs -1.1x vs -1.1x vs -2.7x vs -4.3x!!! on NYSE and +1.4x vs -1.6x vs -3.9x! vs -2.1x! vs -1.2x vs 1:1 vs -2.8x vs -5.7x!!! on Nasdaq. Breadth was similar: NYSE: +2.1x vs -1.3x vs -11.2x!!! vs -2.4x vs -1.3x vs +1.1x vs -3.4x! vs -9.8x!!! on NYSE and +1.9x vs -1.4x vs -2.3x! vs -2.2x! vs -1.1x vs -1.1x vs -3.8x! vs -7.6x!!! on Nasdaq. New 52 week highs were rose slightly to a  WEAK 40 vs 28 vs 47 vs 66 vs 116 vs 99 vs 115 vs 108 vs 216; (768 is cycle high), while new lows fell back to a still high 352 vs 502! vs 394! vs 286 vs 201 vs 244 vs 215 vs 196 vs 69 vs 97, do you see a trend? The ratio is negative for an eighth straight day: -7.5x! vs -17.9x!!! vs -8.4x! vs -4.3x vs -1.7x vs -2.5x vs -1.9x, recent high was +7x! The S&P VIX rose dove following a 7.6% rise on a ‘key reversal’ to 16.42 vs 17.99 -1.57. -8.7%! 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 +0.4% vs -0.2% vs -1.5%! vs -0.5% vs FLAT; Dow Transports  DOWN 1.5%!!! vs -0.2% vs -2.6%!!! vs -0.1% vs +0.8%;Dow Utilities UP 1.2%! vs -0.8% vs -1% vs +0.4% vs -0.9%; S&P 500 +0.5% vs -0.2% vs -1.4%! vs -0.4% vs FLAT; Nasdaq Composite +0.6% vs -0.4% vs -1.3% vs -0.7% vs FLAT; Nasdaq 100 +0.4% vs -0.3% vs -1.2% vs -0.8% vs FLAT; Russell 2000 +0.9% vs -0.5% vs -2%! vs -0.6% vs -0.2%; NYSE Financials +0.5% vs +0.4% vs -1.7%! vs -0.6% vs +0.2% (KBW Banks +0.6% vs +0.4% vs -2.1% vs -1.1% vs +0.2%; Nasdaq Banks +0.7% vs -0.1% vs -1.6% vs -1.1% vs +0.2%; NYSE Brokers +1.2% vs +0.6% vs -2.5%!!! vs -1.6%! vs +1.2%!NYSE Financial Leaders: BAC +0.2% vs +1.1% vs -3.5%! vs -0.6% vs -0.4%, C -0.7% vs +0.5% vs -3.2%; GE +0.5% vs flat vs -3.2%. BAC back in the $9-10 range, two day ago it touched $8.95! Last 9 days -7.4%!

Global equities strong after Europe was down for six straight sessions: FTSE +1.5%! vs -0.6% vs-0.5% vs -0.5% vs -0.6%; CAC 40 +1.8%! vs -0.3% vs -0.8% vs -0.3% vs -0.6%; DAX +1.7% vs -0.5% vs -1.1% vs -0.3% vs -0.8%;Nikkei +1.4% vs +2.2%!!! vs +1.9%! vs +0.1% vs +0.2%; Hang Seng +0.5% vs +0.2% vs -1.6% vs +1.2% vs -1.1%; Korean KOSPI +0.9% vs -0.5% vs -1.2%! vs +0.2% vs -0.6%;Indian Sensex +0.2% vs -0.9% vs -0.8% vs closed vs -0.3%. U.S. stock futures STRONG and near highs: DOW +90; SPX +11.40; NDQ +24.25! Why? Beats TB!

U.S. treasury bonds slipped lower Friday and are off overnight: 10 yr 1.61% -5/16 – record low of 1.40%; 30 yr 2.76% -9/16. Long TIP 0.32% vs 0.28% -5/8 – 0.25% is the record low!The 5 yr TIP yields -1.46%; 10 yr -.82%.T-Bills: 0.11% 1 month; 0.08% 3 months; 0.13% 6 months. Reverse Repo 0.26% vs 0.32%! 3 mo. Libor 0.31%; 6 mo. 0.52%! On 9/18 they were 0.38% and 0.67% respectively. European problem sovereign 10 years, Germany-bench: 1.35% +2; Japan 0.73% +1; Italy 4.86% +1; Spain 5.85% +1; Greece 16.90% vs 17.03% -20!!! …on 9/20: 19.75%!!!; Portugal 8.32% -25!; Ireland 4.55% +3.

Gold’s intraday high a week ago Friday of $1739.40 was highest since 10/19. It closed up – in narrow trading on an inside session – Friday at $1714.70 +.50. 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 $81 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 $1739, the 40 day, $1744, the 40 day, CROSSED!MAJOR SUP at $1670, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1723.90 +$9.90. Crude closed up at $86.67 +$1.22, RES at the 40 day (88.72), 50 day (90.11), and the 200 day (94.36), all still falling! Overnight it is $87.98 +$1.06. Can it rally again???


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