11/30/12…of mice and men

Today’s title originally came from the Robert Burns poem’ To a Mouse’: “The best laid schemes o’ mice an’ men / Gang aft agley.” (The best laid schemes of mice and men / Often go awry.). That is where Steinbeck’s title discussed below originated.

TB’s Quote of the Day: “Despite the claims that the president supports a balanced approach, the Democrats have yet to get serious about real spending cuts…there is a real danger of going off the fiscal cliff.” – House Speaker John Boehner. Get serious, John? Tell us what taxes you are going to raise? What perks will be cut? Will you raise the marginal rate? How disingenuous. Think you can make the Dems look like fools? Possibly but please, don’t say this is a time for adults when you behave like a child.

Bloomberg Quote of the Day: “I am not an adventurer by choice but by fate. – Vincent Van Gough…same way TB ended up writing.

Bloomberg Top Stories:

*Germany Seen Recession-Bound in Investor Poll Showing Euro Crisis Deepens – let’s see Germany, UK…Greece, Spain and others saddled with austerity cuts…hmmmm. Oh yeah…and the U.S. and its fiscal cliff (sic)

*Euro Strengthens as Metals Climb; Yen Weakens on Stimulus, Factory Output

*Deutsche Bank Sees 2013 Sweet Spot in Loans Beating Bonds – hmmm

*BNP Paribas Joins SocGen Fighting French Banks’ Label of Euro-Crisis Proxy

*Resurgent Chinese Economy Seen in Poll by Investors Who Prefer Xi over Hu – who?

*Sweden Will Oppose ECB Bank-Oversight Plan in Existing Format, Borg Says –Victor?

*Fracking Secrets by Thousands Keep Americans Clueless on What’s in Wells

*U.S. Senators Propose Wider Sanctions Against Iran to Curb Nuclear Program – jointly

*UN Streamlining Climate Talks in Push for New Greenhouse Gas Limits

*Palestinians Gain Observer-State Status at UN With Backing of 138 Nations – not U.S.

*Egypt’s Committee Approves Draft Constitution as Activists Plan Protests – sad!

*Syrian Rebels Clash With Troops in Capital as Internet, Phones Remain Cut.

Look at the Boehner quote above and explain why stocks are trying to rally! This is a sham. Proof? After lambasting Geithner for giving him no deatailed budget cuts in their meeting he was asked what tax increases he would make…”I’m not going to give details at this time.” If that sounds like a Romney quote it is because he said the same thing! It is amazing though how many GOP ‘true believers’ have blinders on and accept the rhetoric that the deficit is all Obama’s fault. Ask any…any…qualified economist who doesn’t have an agenda and they will put the blame squarely on the GOP and George W. Bush. Then, the financial sector that loves them created the biggest rip-off in global history! Is it right that the majority of U.S. citizens pay while enriching the culprits? You decide.

There is no fiscal cliff…manufactured by the Tea Party and then pounced on by the media. Baby steps will do it but we have to start now and this political posturing is going nowhere. Lock the leaders up in a room and don’t let them come out until they have an agreement! With details!!! Anyone want to be that the debt ceiling will come into play again? TB is taking bets…

Yesterday’s Q3 GDP revision was better than estimated…or more accurately the headline number was…the increase was largely due to an inventory build which most would consider involuntary while consumption was lower. Hip! Hip! Boo!!! Pretty hard to argue this is bullish…unless you believe higher inventories in the NEXT quarter is a good thing. Then the entire session was spent trading up and down on rumors on the fiscal cliff. Tell TB this: what kind of investor does that? NONE! Speculation is what it is…period! More ‘special’ dividends declared and as one analyst put it: isn’t management supposed to pay dividends and do stock buybacks based on what is optimal…for the corporation in the long run? As Keynes said…”in the long run we are all dead.” TB’s corollary: even in the near term the CEO is gone so what’s in it for him to even think about the long run. He IS the long run! That is what is wrong with companies and corporate governance. They have made a mockery of capitalism.

Total NYSE volume was barely aboveTuesday’s weak 3.31B shares for a second day at 3.34B shares! Meanwhile, REAL volume fell back again below 700M shares to 682M shares vs 709M vs 689M shares – 8 straight sessions <800M shares! Advance/declines and breadth were strong but negated by the low volume and political posturing on both the NYSE and Nasdaq. The VIX slipped to 15.09 vs 15.56!

Bond market closed modestly higher and little changed overnight…again: 10 yr note 1.61%, 30 yr 2.78%. 3 mo. Libor steady at 0.31%, 6 mo. 0.53%.

Gold and Crude were both up after two straight down says with Gold gaining nearly $11 and Crude $1.58. Gold traded in a very narrow range in an inside session after losing $23  and BOTH remain below both their 40 day and 50 day m/a’s.

James Kwak just put out this piece with an explanation of high frequency trading: http://baselinescenario.com/

– – –  . . .  – – –

…John Steinbeck’s Nobel Prize winning novel…seems appropos as we have a bunch of hypocritical mice running our country. They don’t even realize they are on a treadmill. A treadmill of ideology. You can’t run a country on this…let alone a democracy…not without eventual catastrophic reactions. Yet that is that path that has been chosen for us. Not by the majority…not even a party’s choice, but a small group of minority groups within that one party. TB won’t name it…no need to. Where are the men?…and the women who will lead us out of our self-imposed grief? None on the horizon.

Jim Kwak has written a good piece on the impact of social security on the budget…real vs. perceived…should ‘security’ be ‘social’? http://baselinescenario.com/

Who has hijacked the government from solutions to real problems to sweeping them under the rug? Corporate America…aka Big Business. They have pumped hundreds of millions into lobbyists and politicians pockets to insure that nothing is done about the big problems. Such as?

Global Warming: despite all but a few scientists warning of the problems we remain in denial. Their solution: wait fifty years and let’s see if its real. This is akin to not buying insurance for your home unless a fire starts then dialing your agent. A chunk of ice recently broke off Greenland that is bigger than the U.S. Question: if ice melts doesn’t the air become warmer, water levels rise (like in those low-lying areas like Manhattan?), and intensity of storms becomes greater while creating drought conditions inland? Just a thought to ponder. Argument number two is that China is the biggest cause and if they do nothing what can we do other than lower the profitability of our corporations (ah the key word again)? This is our planet and we profess to care about what life will be like for our children and grandchildren. Visualize a world where no one goes outside for fear of getting skin cancer. This leads us to…

Infrastructure: our roads and especially bridges are crumbling, our electricity grid is totally obsolete and we will see more and more outages…widespread ones unless we bring it into the 21st century. We want to create jobs and there is a good place to start that is not busy work. Sure it will cost money and it won’t be done if we make draconian cuts to spending to prevent a crisis that is well over a decade away and can be fixed through rational thought not hyperbole. Obama’s ‘shovel-ready projects’ plan produced few lasting developments…most went to fixing pot holes which were already budgeted or planned but there was not money to fix them. That was the reason that it produced so few jobs: companies did not have to hire new employees….it merely kept them from laying off employees for lack of work.

“We don’t have a revenue problem, we have a spending problem.”  Ah, the catch-all phrase of the GOP. How dare they say this after two rounds of unnecessary tax cuts which produced few jobs…the entire benefit came in the financial sector which in turn was driven by the housing boom. Proof? Construction spending and jobs: compare the unemployment and pay of workers on commercial developments vs. housing. The latter was well paid and fully employed while construction workers had big job losses.

The revenue problem began when the financial sector took us over the real ‘cliff’ and tax revenues plunged as the government was forced into bailouts and deficit spending to try to save jobs. TB is sure that the GOP is proud that George Steinbrenner and at least two other billionaires beat the system by dying in the zero percent inheritance tax year! The solution to that problem is to strengthen the economy we need jobs and neither government (who is willing but unable), or the private sector (who is unwilling unless they can get cheap labor), is creating them. No, the corporations…especially Wal-Mart are interested in enriching their managements and the family members with their inherited stock collect billions while their employees are paid below the poverty level. This is the poster child of how a company should be run? Compare to Costco…unionized employees paid a fair wage and the company still makes lots of money. Or why is UPS still doing well despite FedEx being non-union.

Those are TB’s thoughts…care to share yours? TB’s mailbox is always open.

Have a fun weekend!

TB

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

Volume was barely higher at a weak 3.34B shares vs 3.31B. NYSE shares executed without the aid of the ETN market slipped below 700M to a weak 682M shares vs 709M vs 689M. The 949M of last Friday was highest since 10/19. There have been just 19 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 675M. The average for 2012 is just 763M shares and since 6/29 just 691M shares– WEAK!!! 122 of the last 165 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 73 sessions less than 700M shares. 238 of the last 260 sessions have been less than the 12 mo ave (91%)! This remains a manipulated market – going wherever the freaks want it to!

Advance/Declines were positive again: +2.5x vs +2.3x vs -1.3x vs -1.3x vs +5x on NYSE and +2.7x vs +1.4x vs -1.2x vs +1.2x vs +3.2x on Nasdaq. Breadth was similar but negated by low volume: NYSE: +3x vs +4.2x vs -2.2x vs -1.5x vs +15.6x on NYSE and +2.5x vs +3.3x vs -1.1x vs +1.8x vs +5.6x on Nasdaq. New 52 week highs rose slightly to 154 vs 143 vs 170 vs 141 vs 159 (768 is cycle high, 28 low), while new lows PLUNGED to 38 vs 62 vs 48 vs 48 vs 43. The ratio remains positive: +4x vs +2.3x vs +3.5x vs +2.9x vs +3.7x. Recent high was +7x! The S&P VIX fell again to 15.09 vs 15.50 vs 15.92. 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 +0.8% vs -0.7% vs -0.3% vs +1.4%;  Dow Transports +0.6% vs +0.7% vs -0.2% vs +0.7% vs +1.1%;Dow Utilities +0.5% vs +0.3% vs +0.1% vs +1.2% vs -0.1%; S&P 500 +0.4% vs +0.8% vs -0.5% vs -0.2% vs +0.3%; Nasdaq Composite +0.7% vs +0.8% vs -0.3% vs +0.3% vs +1.4%; Nasdaq 100 +0.6% vs +0.9% vs -0.4% vs +0.5% vs +1.5%; Russell 2000 +1.2%!!! vs +0.5% vs -0.2% vs +0.2% vs +1.1%; NYSE Financials +0.8% vs +0.5% vs -0.7% vs -0.5% vs +1.4% (KBW Banks +0.3% vs +0.3% vs -1.3%! vs -0.4% vs +1.6%; Nasdaq Banks +0.7% vs +0.1% vs -0.8% vs -0.1% vs +1.8%; NYSE Brokers +0.4% vs +2% vs +0.1% vs +1% vs +1.6%.NYSE Financial Leaders: BAC +0.7% vs +0.3% vs -1.8% vs -0.7% vs +1.3%; C +0.6% vs -0.1%. No other leaders. BAC still in the $9-10 range, closing at $9.83, after hitting $8.95 lat week! No other leaders – again!

Global equities strong!!!: FTSE +0.9% vs-0.3% vs +0.4% vs -0.7% vs +0.2%; CAC 40 +1% vs -0.3% vs +0.3% vs -0.9% vs +0.1%; DAX +0.7% vs -0.2% vs +0.6% vs -0.4% vs +0.1%;Nikkei +1% vs -1.2% vs +0.4% vs +0.2% vs closed; Hang Seng +1% vs -0.6% vs -0.1% vs -0.2% vs +0.8%; Korean KOSPI +1.2%! vs -0.8% vs +0.9% vs -0.2% vs +0.6%;Indian Sensex +1.8%! vs closed vs +1.7% vs +0.2% vs -0.1%. U.S. stock futures strong: DOW +73; SPX +8.70; NDQ +18.75!

U.S. treasury bonds little changed yesterday and overnight: 10 yr 1.61% – record low of 1.40%; 30 yr 2.78%. Long TIP 0.33% +5/16 – 0.25% is the record low!The 5 yr TIP yields –1.48%; 10 yr -.84%.T-Bills: 0.13% 1 month; 0.08% 3 months; 0.13% 6 months. Reverse Repo 0.25%. 3 mo. Libor 0.31%; 6 mo. 0.526%.  European problem sovereign 10 years, Germany-bench: 1.37% +1; Japan 0.70% +1; Italy 4.52% -2; Spain 5.34% +4; Greece 15.92% vs 16.07% -13!!!…on 9/20: 19.75%; Portugal 7.42% +2;Ireland 4.33% +1.

Gold closed higher on an inside day with a very narrow range and remains below both the 40 and 50 day m/a’s. It closed at $1729.50 +$10.70. Friday’s intraday high was $1755. On 10/4 it closed at $1796 highest since 2/29 and it has lost $56 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 RES at $1734, the 40 day, and $1742, the 40 day.Further SUP at $1672, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! It is now $1733.00 +$3.50. Crude also rose closing at $88.07 +$1.58, the session high of $88.69 matched the 50 day m/a. RES/SUP at the 40 day (88.00), then the 50 day (88.69), and the 200 day (93.88), finally flattening! It is currently $88.16 +.09.

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