11/23/12…what ails America?

Bloomberg Quotes  of the Day: “The highest result of education is tolerance.” – Helen Keller…but what does a blind woman know…hmmm, Justice is blind too! Wait, what is it that some groups in this country have disdain for? Uhhhh, education? Kewpie doll here! And…”Experience teaches only the teachable.” – Aldous Huxley…wasn’t that the Doc that Bill Cosby played on TV??? Oops, it was the other guy! LOL. You know what experience is, right? Katrina, Sandy, ice cap melting, science teaching us rather than dogma?

Next week’s economic calendar is fuller than this week’s was but without many potentially market-moving indicators. We will get October Durable Goods Orders, the September Case-Shiller Home Price Index, and November Consumer Confidence (Tuesday), October New Home Sales (Wednesday), the second estimate of Q3 GDP (Thursday), and October Personal Income and the November ISM Chicago Survey (Friday). No data releases are scheduled for Monday. In addition to the economic data, the Federal Reserve will release its Beige Book (Wednesday) in preparation for the December 11th – 12th FOMC meeting. Courtesy of Steve Wood, Insight Economics

Bloomberg Top Stories:

*Germany’s Business Confidence Unexpectedly Gains in Economic Growth Signal

*EU Budget Deadlocked by Rich-Poor Divide That Stymies Debt-Crisis Response (coming soon to a theatre near you…is this global plutocracy?)

*Biggest Traders Hurt as Fed-to-ECB Stimulus Crushes Volatility – do you get it?

*Euro Climbs to Three-Week High on IFO Report as European Stocks Fluctuate

*Sandy Seen Boosting U.S. With as Much as $240 Billion Poured Into Economy (shame on Obama and FEMA for helping out in this ungodly disaster…right? Mitt? Right?)

*German Lawmakers Reject Proposed Treaty on Undeclared Swiss Bank Accounts

*Autonomy Founder Defends Sales Practices Using Discounts Amid HP Claims

*Pollution Fight Fading as European Leaders Battle Economic Crisis

*Draghi Says ECB Won’t Be Overburdened by Adding Bank Supervision to Tasks

*Worst Energy Performer Exposes Petrobras Fuel Distortion

*Holiday Sales to Wealthy May Avoid U.S. Fiscal Cliff – oh joy, a private jet!

*Palestinian Killed Near Gaza-Israel Border as Groups Damage Security Force – 😦

*Syria Death Toll Climbs Past 40,000 as Fighting Today Claims 10 More Lives

*South African Farm Strikes Widen Political Divide While Threatening Jobs   

A modest rally on another low volume day (higher overnight). Total NYSE volume plunged again to a way below average 2.6B shares vs 3.2B shares vs 3.36B shares…once again, it was all High Freak trading! Floor volume plunged again, to just 522M shares (lowest since Oct. 8!) vs 645M shares vs 711M shares, lowest since 11/5. Advance/declines and breadth were both positive by about 2x on NYSE and Nasdaq. The VIX rose slightly to 15.31 vs 15.08. Stocks are a fool’s folly.

Bond market rallied slightly Wednesday, up modestly overnight, but remains weak: 10 yr note 1.67%, 30 year 2.81%.  3 mo. Libor steady at 0.31%, 6 mo. 0.52% but creeping up.

Gold and Crude were modestly higher on Wednesday closing at $1728.20 +$4.60 and #87.38 +.63 respectively. Gold up $3.50 o/n, Crude -.12.

– – –  . . .  – – –

TB’s Quote of the Day: “and you shall know the truth and the truth shall set you free.” – Christ…various references in the Bible. You have merely to accept truth and science over ideology…that is truth. Pity, we have forgotten what it is…

… the following piece answers today’s question and it is a sad commentary on us that this article had to be printed. The Rush View You owe yourself and the U.S. the responsibility to read this and see how for sheer political purposes Benghazi is on the front burner when Congress has so many pressing issues. True it needs to learn the truth but what the GOP is doing is obfuscating the truth. It is disturbing and to those who believe this and those who said if Obama was elected they would move to Canada, TB says ‘go!’

Why all the hatred for the poor? Who cares about one in four children living in poverty (heck we are trying to get more of them by banning abortion). Instead, conventional wisdom (sic) is they are there because they wish to be…taking advantage of the rest of us. Isn’t that convenient after Wall Street, real estate agents, mortgage lenders, appraisers, etc. Qualified borrowers were steered into sub-prime for higher fees, unqualified buyers submitted false information but for the most part that was done by lenders…even at the big banks. Yet, there is no blame assessed to the financial community for this…even as they lose lawsuit after lawsuit, with shareholders bearing the cost, while management reaps big bonuses. How can any sane person call this free market capitalism…it is what it is: plutocracy!

You owe it to yourself to stop gripping about the poor and read the Time, Nov. 15, article on PIMCO. Bill Gross, like TB was a Republican who voted twice for Obama because of what the party is doing. El-Erian is a life-long Democrat. They see the party for what it is: creating a plutocracy. All of a sudden they are coming out of the woodwork so that TB is seeing he is not alone. There are good, honest men…and women…out there. Heed!

Sens. McCain and Graham among others should be ashamed of their Susan Rice bashing. Here is how it looks to the rest of the free world: Economist: Rice TB has written both of these ‘luminaries’ asking where they were when the Bush Administration fed Secretary of State (NOT Secretary to the UN) Powell unmitigated lies on WMD in Iraq.

Furthermore, the article shows how trumped up the charges of a cover-up really are. Bush got us into a war (actually two and Afghanistan, the first, was supposed to be JUST to get Bin Laden and Al Qaida)…Rice and the Obama administration may have been trying to stop us from overreaching…which Romney was more than willing to do.

TB spent an hour listening to a discussion of the dreaded fiscal cliff, which please forgive him, may prove to be the most trumped up thing since Y2k…you do remember that debacle don’t you? What is truly inexplicable though is how one party (you fill in the blank – in fact one small segment of that party), created mass hysteria while the party luminaries all proclaimed they would not accept $1 of tax increases for even $10 of tax cuts. You cannot make something like that up…it’s as if to say, ‘do it our way or we will destroy this country –  take it or leave it.’ This despite evidence to the contrary that we have three decades left on social security and one on Medicare. If it is so dire, how could they possibly have wasted nearly a year with their theatrics which pushed us closer to that mythical cliff. TB will concede it is steep fiscal slope, but not anything like a cliff.

Here’s the thing: they plan to slash the deficit – especially any social safety net items – preserve military spending, and heaven forbid make those who have enriched themselves over the past 12 years pay more. That includes the venture capital/private equity/hedge funds who, thanks to a loophole that defies explanation are able to convert 35% ordinary income to 15% capital gain as at least one candidate for office was able to do. Bet you wish you could do that!

Anyway, the discussion went to Simpson-Bowles…you know the commission created by Obama, with bi-partisan membership which passed a resolution, despite every GOP member voting against it, delivered it to a vacant White House, gave it to Biden, and it was then unceremoniously killed in committee…by the GOP! THEN, they had an epiphany and their messiah Paul Ryan, adopted it – at least for campaign purposes, never once explaining why he originally voted against it! Then Team Romney ran on it and how it was going to prevent the alleged ‘cliff.’

Their pledge was this: elect us and we will have a combination of massive deficit cuts along with judicious cuts in tax incentives TBA, in fact everything was TBA. Trust us!

But did any of this enter into Team Romney’s defeat or the GOP losing some seats in Congress, while still holding a majority in the House? Noooo, it was the pandering by Obama to blacks and latinos, Romney told his backers, who TB believes were a tad skeptical that the defeat in no part was due to his blunders. Then he created a rift in his own party as they tried to distance themselves from his comments even more than with Michelle Bachman! Seems they should be doing the same with McCain. Most vocal is Louisiana Governor Bobby Jindal but also Jeb Bush. This from the man who would be president…wow! The sailor who fell from grace to the sea revisited.

How does TB know we won’t fall off the cliff/slide down the slope? Because it is not in the interests of either party. Both would like to push it to next year then do the minimum on each side to hurt their party’s backers. Talk about the devil in the details…they will likely sketch out a deal with more holes in it Than Clyde Barrow’s Ford. Hey, at least no one died in this one. Back to that discussion TB listened to: ahem…tax law changes and budget cuts have to start in the House…the GOP controlled House! Then to the impotent Dem controlled, barely but not enough to block filibuster (except TB bets that this time Reid and Co. will hold them accountable by making them follow-thru on the filibusters not just threaten…why they didn’t do that either is puzzling, except to avoid also being seen as obstructionist – except killing bills without an up or down vote is the same thing.

By now you are probably upset with TB unless you agree with him and in any case we are all confused. Face it we have a dysfunctional government more interested in their own careers. But the ‘joker’ this time is Obama…he has nothing to lose except his legacy this time, so watch him become assertive. What better argument is there for a six year, one term presidency? TB can’t think of anything wrong with it…unless your man/woman doesn’t get the job!  Simon Johnson of The Baseline Scenario penned a great piece on who Obama should choose as head of the SEC. With Warren to support him, his choice, although he gives three (and today, one he should not choose, Mary Miller, another lover of the banks), former Sen. Ted Kaufman of Delaware, Neil Barofsky, former special inspector general in charge of oversight of TARP, and Dennis Kelleher, an attorney key in the Dodd-Frank negotiations. Any of these three would come down hard on the banks to the dismay of Mr. Dimon. That is how you achieve change.  baselines/barofsky

You can actually learn a lot by approaching things with an open mind…and solve them!

Now get out of here and enjoy your weekend!


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

Volume plummeted again to 2.67B va 3.2B vs 3.36B shares three days after it hit 4B on an options expiry! NYSE stocks executed without the aid of the ETN market fell to 522M shares (lowest since 10/8) vs 645M vs 711M shares., The 949M of last Friday was highest since 10/19. There have been just 18 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 679B. The average for 2012 is just 766M shares and since 6/29 just 696M shares– WEAK!!! 117 of the last 160 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 – 776M 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 69 sessions less than 700M shares. 233 of the last 255 sessions have been less than the 12 mo ave (91%)! This is a manipulated market – no direction!

Advance/Declines were positive: +2.1x vs -1.3x vs +7.8x!?! vs +2.9x vs -2.1x on NYSE and +1.8x vs -1.1x vs +3.7x vs +1.4x vs -1.6x on Nasdaq. Breadth was similar: NYSE: +2.6x vs +1.2x vs +13.4x!?! vs +2.1x vs -1.3x on NYSE and +2.4x vs +1.2x vs +5.7x! vs +1.9x vs -1.4x on Nasdaq. Both indicators had HUGE negatives drop from the five day numbers. New 52 week highs were steady at a still weak 122 vs 124 vs 94 vs 40 vs 28 vs 47 (768 is cycle high), while new lows dropped to 88 vs 106 vs 103 vs 352 vs 502!. The ratio remains slightly positive after 9 straight negatives: +1.4x vs <1.1x vs -1.1x vs -7.5x! vs -17.9x!!! vs -8.4x! Recent high was +7x! The S&P VIX rose slightly to 15.31 vs 15.08. 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 -0.1% vs +1.7% vs +0.4% vs -0.2%;  Dow Transports +0.3% vs flat vs +1.9% vs -1.5%!!! vs -0.2% vs -2.6%!!!;Dow Utilities DOWN 0.4% vs -0.3% vs +0.2% vs +1.2%! vs -0.8% vs -1%; S&P 500 +0.2% vs +0.1% vs +2% vs +0.5% vs -0.2% vs -1.4%!; Nasdaq Composite +0.3% vs flat vs +2.2% vs +0.6% vs -0.4% vs -1.3%; Nasdaq 100 +0.2% vs flat vs +2.4% vs +0.4% vs -0.3% vs -1.2%; Russell 2000 +0.6% vs +0.1% vs +2% vs +0.9% vs -0.5% vs -2%!; NYSE Financials +0.2% vs +0.4% vs +2% vs +0.5% vs +0.4% vs -1.7%! (KBW Banks -0.3% vs +0.7% vs +2.2% vs +0.6% vs +0.4% vs -2.1%; Nasdaq Banks flat vs +0.4% vs +1.7% vs +0.7% vs -0.1% vs -1.6%; NYSE Brokers +0.4% vs -0.5% vs +2.2% vs +1.2% vs +0.6% vs -2.5%!!!NYSE Financial Leaders: BAC +1.5% vs +1.5% vs +4.1%??? vs +0.2% vs +1.1% vs -3.5%! But BAC still in the $9-10 range, after hitting $8.95 three days ago! No other leaders.

Global equities higher for a third straight session: FTSE +0.2% vs +0.7% vs +0.1% vs -0.2% vs +1.5%!; CAC 40 +0.1% vs +0.4% vs +0.3% vs -0.4% vs +1.8%!; DAX +0.1%? vs +0.9%! vs +0.1% vs +0.1% vs +1.7%;Nikkei closed vs +1.6%!!! vs +0.9%! vs -0.1% vs +1.4% vs +2.2%!!!; Hang Seng +0.8% vs +1%! vs +1.4%!!! vs -0.2% vs +0.5%; Korean KOSPI +0.6% vs +0.8% vs -0.3% vs +0.6% vs +0.9%;Indian Sensex -0.1% vs +0.3% vs +0.7% vs -0.1% vs +0.2%. U.S. stock futures higher, trading in mid o/n range: DOW +28; SPX +2.80; NDQ +9. Of course, this means nothing for today!

U.S. treasury bonds traded lower again on Wednesday, up slightly o/n: 10 yr 1.67% +1/16- record low of 1.40%; 30 yr 2.81% +3/16. Long TIP 0.37% +1/2 – 0.25% is the record low!The 5 yr TIP yields –1.42%; 10 yr -.77%.T-Bills: 0.16% 1 month; 0.09% 3 months; 0.14% 6 months. Reverse Repo 0.27%. 3 mo. Libor 0.31%; 6 mo. 0.52% but inching up. On 9/18 they were 0.38% and 0.67% respectively. European problem sovereign 10 years, Germany-bench: 1.43% -1; Japan 0.73% +1; Italy 4.75% -2; Spain 5.64% +2; Greece 16.10% – a week ago it was 17.03%!!! …on 9/20: 19.75%!!!; Portugal 7.70% +6; Ireland 4.34% +1.

Gold’s intraday high a week ago Friday of $1739.40 was highest since 10/19. It closed at $1728.20 +$4.60 Wednesday and is $1734.10 +$5.90 o/n. On 10/4 it closed at $1796 highest since 2/29 and it has lost $68 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 $1737, the 40 day, $1743, the 50 day, CROSSED!MAJOR SUP at $1670, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Crude closed modestly higher Wednesday on an ‘inside’ day at $87.38 +.63. SUPPORT at the 40 day (88.48), RES at the 50 day (89.57), and the 200 day (94.21), all still falling! Overnight it is $87.21 -.17


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