11/27/12…let’s work together

Bloomberg Quote of the Day: “Walking is man’s best medicine.” – Hip-pocrates/ Sorry

Bloomberg Top Stories:

*Greece Wins Easier Terms on Debt as European Leaders Hail Rescue Formula – ha!

*London Bankers Brace for Lower Payouts Than New York as European Fees Fall

*Stocks Climb With Metals on Greece Debt Agreement as German Bunds Decline

*Carney at Bank of England Reveals That Canadian Needed to Rescue U.K. in Crisis

*RBS to UBS See Dollar Soaring Past Cliff as U.S. Strengthens???…or not!

*ConAgra Agrees to Buy Ralcorp for $6.8 Billion After Initial Bid Rebuffed – why???

*Egypt Prepares for Mass Protests Over Mursi Power as Appeasement Bid Fails – !!!

*Mursi Poses Dilemma as U.S. Weighs Response to Egypt Power Grab  

A very weird day in stocks…Dow and S&P 500 both off about 0.2% while both Nasdaq indices and the Russell 2000 rose. The star though was Dow Utilities which rose 1.2% after being off 0.1% on Friday’s rally…are they getting oversold? Perhaps. Second place went to Dow Transports which rose 0.7% adding to Friday’s 1.1% gain! This is the easy one…the Index was up 33 points with 20 of them coming from railroad stocks led by KSU with 11! FedEx and UPS added 7 points. Now for the not so obvious ones…the Nasdaq Composite and 100 which posted modest gains…why not? AAPL, which received new ‘triple’ coverage from Citi rose 3% and at 20% of the 100 plus a chunk of the Composite, added 14.60 index points to the former which was only up 12 points! Backing it out both indices would have been down similar to the others. Microsoft, Google and Qualcomm were the biggest losers. Listening to those three stellar analysts however they were only bullish for a return near or to the highs…a good reason to trade but not to hold…isn’t trading what it’s all about…anymore?

Total NYSE volume rose from an incredibly low 1.45B shares, the 12 month low to 2.56B shares…about the same as last Wednesday and still well below average. High Freaks on parade! This is not a market…it isn’t even a casino where at least you know the odds! Remember the old saw: never short a THIN market? And it doesn’t get any thinner than this! Floor volume rose from 329M shares in Friday’s short session (second lowest of the year) to a still weak 633M shares – 5 straight sessions <800M shares! Advance/declines and breadth were mixed with NYSE negative and Nasdaq positive, natch. The VIX rose slightly to 15.50 vs 15.14. Stocks remain a fool’s folly.

Bond market closed about even and is going sideways overnight: 10 yr note 1.66%, 30 yr 2.80%. 3 mo. Libor steady at 0.31%, 6 mo. 0.52% – inching up.

Gold and Crude were off slightly yesterday. Following Friday’s near $24 gain, it held both the 40 and 50 day moving averages closing at $1749.60 -$1.80. Meanwhile Crude closed off slightly and rallies remain bound by the 40 day m/a. It closed $87.74 -.54. Overnight Gold is off $1.60 while Crude is up just 18 cents.

– – –  . . .  – – –

…if things are as bad as we are told, doesn’t it seem obvious that ‘we’ – which means our Congressmen and the President need to put aside their ‘petty’ (and lucrative for their re-elections in their gerrymandered districts so no newcomers can beat them…witness Michele Bachmann and others of both parties, despite an approval rating of <10% for Congress), differences and those of their backers to do what is right for the American people? Apparently not.

Despite talk of ‘everything being on the table’ it clearly isn’t. Look at the time spent on the Benghazi hearings while the vocal senators McCain and Graham continue to make fools of themselves castigating Susan Rice. This in the face of new information supplied by BOTH the CIA and FBI (when was the last time these two agencies agreed on anything?), that what was removed from her comments was done at their behest.

Graham looked totally stupid yesterday on MTP as he did a Donald Trump impersonation. These people don’t want facts they want to gain political advantage.

This sets the tone for the next Congress and it will be a juicy one. For now, we will scream about the budget deficit and cuts to be made in spending, tax increases (note the GOP doesn’t want to change rates, but reduce deductions…AFTER they cut spending!

So we will proceed with a stalemate, ad nauseum, aka: kick the can into 2013.

David Kotok put out a commentary Sunday highlighting something more significant: raising the debt ceiling. Ring a bell? You know, that is what the Tea Party used as ammo to stymie the Administration and resulted in a downgrade of our federal debt. Bravo!

Anyone in the financial business knows that the debt ceiling is a vestigial organ. It was done to make Congress and the public aware of how much it is spending. In simple terms it is like you going out on a spending spree for Christmas and then when the bills come in next year debating whether you are going to pay them…period! Ah, but it is such an attention getter. That is the true fiscal cliff and we can fully expect the right wing of the GOP to exploit it again…only this time it may backfire more than the last time.

In early January, the treasury will have to come begging once again and how soon the ceiling is passed will determine just how much spirit of cooperation there really is. At the end of the month we will have the treasury refunding for the Feb. 15 maturities. Normally, it would be no problem but this year it could well be a major stumbling block.

The brightest spot is that Grover Norquist is finally becoming what he should have a long, long time ago: a pariah. Get him out of the way and we might just get some traction. This is the perfect time with even the mid-term elections a long way off. It was Norquist who torpedoed the agreement between Boehner and Obama last year.

Now to Obama…he needs to lead…and with his legacy on the line, hopefully he will. The best indication will be when he names his cabinet for the second term. If he goes along with the same types as last time, there is no hope. If, however, he chooses people from outside the financial sector, and those retreads from the Clinton administration, he can succeed. A major reason to believe he will abandon Wall Street is that after they were his major support the first term, they abandoned him (making small contributions to cover their bases as they did with McCain), in favor of their ‘brother’ Romney.

So TB says, give him a break…give him the benefit of the doubt and hope he will stop seeing himself as an intellectual leader instead of another politician. That can bring compromise and if not it is up to him to drive it home by bringing them to the White House and forging agreements…if not, take them up in Air Force One and dump them.

It is going to be a long road…and if nothing happens on the fiscal cliff in this lame-duck session…so be it…but then they had better get to work early in January to thwart a play on the debt ceiling. If they cannot do that, there is little or no hope for us. Cheers!

Yesterday, the Obama administration announced the resignation of SEC Chairman Mary Shapiro…THEN it announced her successor Elisse Walter, a Bush appointee, while Shapiro was named by Obama. Of the five commissioners, at least two have to come from each party. While Walter is well-qualified, both she and Shapiro served as NASD directors, with Shapiro becoming head of FINRA which it morphed into in 2008. That year Shapiro was paid $3.3M…in 2009 after her resignation to head the SEC she was paid  her salary, bonus and a goodbye kiss totaling $9 million!!! Note that FINRA like the predecessor NASD is funded by Wall Street. Honk if you find this troublesome. Last week TB mentioned Simon Johnson’s column on three excellent choices if Obama wants Wall Street reform: Neil Barofsky, a former inspector general and opponent of the big banks, former Senator Ted Kaufman, a strong advocate for Wall Street reform, and Dennis Kelleher, a lawyer with Skadden, Arps, whose specialty is the SEC, and who has also challenged Wall Street. Did he reject these in favor of Walter, simply because of her being a woman? It certainly wasn’t for big changes. Note that Bernard Madoff said in an interview that he was ‘very close’ with Shapiro and knew Walter well…you decide.  More on the SEC tomorrow…now a flawed and failed institution…by design?

Have a great day…guess we are just rounding up the usual suspects,

TB

 

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

 

 

Volume rebounded modestly to 2.56B shares from 1.45B shares in Friday’s short session  vs 1.45B vs 2.67B va 3.2B vs 3.36B! NYSE stocks executed without the aid of the ETN market rose to a weak 633M shares vs 329M shares, second lowest of the year vs 522M vs 645M vs 711M. 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 764M shares and since 6/29 just 692M shares– WEAK!!! 119 of the last 162 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 – 773M 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 71 sessions less than 700M shares. 235 of the last 257 sessions have been less than the 12 mo ave (91%)! This is a manipulated market – going wherever the freaks want it to!

 

Advance/Declines were mixed NYSE negative, Nasdaq positive: -1.3x vs +5x!!! vs +2.1x vs -1.3x vs +7.8x on NYSE and +1.2x vs +3.2x vs +1.8x vs -1.1x vs +3.7x on Nasdaq. Breadth was identical: NYSE: -1.5x vs +15.6x!!! vs +2.6x vs +1.2x vs +13.4x! on NYSE and +1.8x vs +5.6x!!! vs +2.4x vs +1.2x vs +5.7x! on Nasdaq. New 52 week highs were slightly weaker: 141 vs 159 vs 122 vs 124 vs 94 vs 40 (768 is cycle high, 28 low), while new lows were up a tad to 48 vs 43 vs 88 vs 106 vs 103 vs 352. The ratio remains positive for a fourth session following 9 straight negatives: +2.9x vs +3.7x vs +1.4x vs <1.1x vs -1.1x vs -8.4x! Recent high was +7x! The S&P VIX rose to 15.50 vs 15.14. 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 -0.3% vs +1.4% vs +0.4% vs -0.1% vs +1.7%;  Dow Transports +0.7% vs +1.1% vs +0.3% vs flat vs +1.9%;Dow Utilities UP 1.2%!!! vs -0.1% vs -0.4% vs -0.3% vs +0.2% S&P 500 -0.2% vs +1.3% vs +0.2% vs +0.1% vs +2%; Nasdaq Composite +0.3% vs +1.4% vs +0.3% vs flat vs +2.2%; Nasdaq 100 +0.5% vs +1.5% vs +0.2% vs flat vs +2.4%; Russell 2000 +0.2% vs +1.1% vs +0.6% vs +0.1% vs +2%; NYSE Financials -0.5% vs +1.4% vs +0.2% vs +0.4% vs +2% (KBW Banks -0.4% vs +1.6% vs -0.3% vs +0.7% vs +2.2%; Nasdaq Banks -0.1% vs +1.8% vs flat vs +0.4% vs +1.7%; NYSE Brokers +1%? vs +1.6% vs +0.4% vs -0.5% vs +2.2%.NYSE Financial Leaders: BAC -0.7% vs +1.3% vs +1.5% vs +1.5% vs +4.1%. No other leaders. BAC still in the $9-10 range, closing at $9.83, after hitting $8.95 four days ago! No other leaders – again!

 

Global equities generally higher, especially India!: FTSE +0.4% vs -0.7% vs +0.2% vs +0.7% vs +0.1%; CAC 40 +0.3% vs -0.9% vs +0.1% vs +0.4% vs +0.3%; DAX +0.6% vs -0.4% vs +0.1% vs +0.9% vs +0.1%;Nikkei +0.4% vs +0.2% vs closed vs +1.6%!!! vs +0.9%!; Hang Seng -0.1% vs -0.2% vs +0.8% vs +1%! vs +1.4%; Korean KOSPI +0.9% vs -0.2% vs +0.6% vs +0.8% vs -0.3%;Indian Sensex +1.7% vs +0.2% vs -0.1% vs +0.3% vs +0.7%. U.S. stock futures mixed after being up earlier in session on Greek bailout: DOW -12; SPX -0.60; NDQ +3.50.

 

U.S. treasury bonds were little changed Monday and are stagnant overnight: 10 yr 1.67% -1/32- record low of 1.40%; 30 yr 2.81% –1/8. Long TIP 0.38% -5/16 – 0.25% is the record low!The 5 yr TIP yields –1.44%; 10 yr -.77%.T-Bills: 0.15% 1 month; 0.08% 3 months; 0.14% 6 months. Reverse Repo 0.32%. 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: 1.44% +3; Japan 0.72% -1; Italy 4.73% -1; Spain 5.49% -10!; Greece 15.97%!!! -20!!! – a week ago it was 17.03% …on 9/20: 19.75%; Portugal 7.61% -12; Ireland 4.44% +6.

 

Gold held on to Friday’s gains on an inside session. It closed at $1749.60 -$1.80. Friday’s intraday high was $1755. On 10/4 it closed at $1796 highest since 2/29 and it has lost $41 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. MAJOR SUP at $1742, the 50 day, and $1743, the 40 day.Further SUP at $1670, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! It is now $1748.00 -$1.60.Crude closed slightly lower at $87.74 -.54, also on an inside day. RES again at the 40 day (88.16), then the 50 day (88.96), and the 200 day (94.03), all still falling! It is currently $87.92 +0.18.

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