12/3/12…let’s make a deal!

TB’s Quote of the Day: “Clowns to the left of me, jokers to the right, here I am, stuck in the middle with you.” – from the song by  Gerry Raferty, Stealers Wheel

TB’s Song of the Day:

Fools rush in
Where angels fear to tread
And so I come to you my love
My heart above my head

Though I see
The danger there
If there’s a chance for me
Then I don’t care

– by Rube Bloom and Johnny Mercer…dedicated to the Congress of the U.S. of A.

Bloomberg Quote of the Day: “I believe it is harder to be fair to oneself than to others.” – Andre Gide…but it sure sounds like the Koch brothers, right?  

This week’s economic calendar is chock full of important indicators. The highlight of the week will be the November Employment Situation Report (Friday). Also important will be the November ISM Manufacturing Survey (Monday), the November ADP National Employment Report and the November ISM Non-Manufacturing Survey (Wednesday). We will also get October Construction Spending and November Motor Vehicle Sales (Monday), the Q3 revision for Productivity & Costs and October Factory Orders (Wednesday), and preliminary December Consumer Sentiment and October Consumer Credit (Friday). Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA.

Bloomberg Top Stories:

*Greece Makes $13 Billion buyback Offer as Merkel Raises Writeoff Proposal

*European Stocks Rise as Commodities Gain on Signs of China Economic Growth

*Manufacturing Contracts in Euro-Area While China, Russia Expand

*UBS Said to Be Approaching $465 Million U.S.-British Settlement Over Libor

*Adoboli’s Ex-Manager sues UBS in London Claiming Firing Was Racially Biased – Ha!

*America Supplanting China in Ranking of Biggest Companies by Stock Markets

*Societe Generale’s Lyxor Said to Seek Withdrawal of Client Funds from SAC

*All Markets Climb for Second Month This year on Signs of Global Recovery

*Treasury Scarcity Seen Growing as Fed Soaks Up 90% of U.S. Bonds in 2013 – !!!

*Oil Bulls Boost Bets on Signs U.S. Economy Strengthening? …what the…???

*Dream Informant Led FBI on Insider Chase From Teterboro to Galleon to SAC

*Geithner Fight on Fiscal Cliff Echoes Pragmatism Revealed With Dodd-Frank

*Osborne Vows U.K. Tax Crackdown as Starbuck’s Says It’s Likely to Pay More

*Clinton Says Syrian Use of Chemical Arms Would Provoke U.S. to Take Action

*Israeli Ambassadors Summoned in U.K., France to Protest Settlement Growth

Total NYSE volume ROSE to 3.94B shares from a weak 3.34B shares which was barely above Tuesday’s weak 3.31B shares! The bad news? Only Dow Utilities were UP (0.9%)! REAL volume on the NYSE floor also rose to 1.18B shares, highest since 9/21 (a quadruple witching), marking only the 13th day it has been above 1B shares in the last 12 months, from a low 682M shares – breaking the string of 8 straight sessions <800M! It was also month-end and mutual funds had to rebalance as well as adjust for net redemptions caused by capital gains on dividends and budget crisis. Advance/declines and breadth were nearly neutral, further negating the volume. The VIX rose to 15.87 vs 15.09! It has been below 17 for 9 straight sessions (12 mo. ave. 18.37).

Bond market closed little changed but is off overnight: 10 yr note 1.64% -1/4, 30 yr 2.83% -1/2. 3 mo. Libor steady at 0.31%, 6 mo. 0.53%.

Gold was off nearly $17 (on a negative key reversal), and is well below both the 40/50 day moving averages,while Crude gained 84 cents (just above the 50 day m/a)er losing $23  and BOTH remain below both their 40 day and 50 day m/a’s. They are currently up $8 and 55 cents respectively.

– – –  . . .  – – –

…ah, it makes you long for the old days with Monty Hall and his Madras sports coats, people dressed up in crazy costumes making total fools of themselves. But we have progressed so much…no more Monty, no more wild coats, but the fools still reign supreme for there is no joy in Mudville…or D.C. except inflicting pain on the other party.

Let the hearings begin: Yesterday Treasury Secretary Geithner (aka Tiny Tim) appeared on all three talk shows. What does he know and when did he learn it? Clearly he is lying and thus should be vilified like Susan Rice…this would accomplish three things: keep the ball rolling, and prove that the GOP is neither racist or sexist.  Not sure if Geithner is Jewish…if so a trifecta, no? Geithner is so laid back that that he almost falls on his rear. Just the kind of guy you want sitting next to you at a dinner…polite but no substance. But he actually has quite an interesting bio: Timothy Geithner – bio

Do you realize it is impossible to talk to a Republican without Rice’s name coming up at least once? If it is with Lindsay Graham he will hi-jack the entire conversation until it is all about her. Yesterday on Face the Nation he said, “I– I’m not– I’m not– I’m not entertaining, promoting anybody that I think was involved with the Benghazi debacle. We need to get to the bottom of it. The President has a lot of leeway with me and others when it comes to making appointments, but I’m not going to promote somebody who I think has misled the country or is either incompetent. That’s my view of Susan Rice.”

There you have it…an open-minded Senator who will not back off from blaming the messenger. He even misquoted Petraeus as only he and McCain see his statement meaning there was a coverup…it was what it was, removed by the CIA and FBI. Now get on with it gentlemen…you have already embarrassed yourselves and your party and are doing more damage with both women and African Americans.

Graham went on to say, “We don’t need to raise tax rates. We need to limit loopholes and deductions for the wealthy. Mister President, if you’ll say yes to Simpson-Bowles when it comes to revenue, so will I and so will most Republicans. We can get revenue without destroying jobs and both of us need to control spending and fix entitlements. No Republican will vote for higher tax rates. We will generate revenue from eliminating deductions and loopholes.”

Which loopholes Senator? Name one…better yet name several. You guys are trying to bait the president…who in case you didn’t notice beat your guy. Ah, but you say, yes he won again but by less than he did the last time. Analyze that statement…isn’t it like the shop owner who said he loses a little on each sale but makes it up in volume? Sheesh!

Sometimes you wonder if the GOP really read Simpson-Bowles. You can excuse them for that though because they vowed to veto it and did so, unanimously… then had the audacity to embrace it. Either way, they missed this part:

2.2.2  Eliminate all tax expenditures for businesses. Corporate tax reform should eliminate special subsidies for different industries. By eliminating business tax expenditures – currently more than 75 – the corporate tax rate can be significantly reduced while contributing to deficit reduction. A lower overall tax rate will improve American business competitiveness. Abolishing special subsidies will also create an even playing field for all businesses instead of artificially picking winners and losers.

In other words, we will lower the corporate tax rate to 25% IF you give up all those deductions…so yes, the government will get more revenue as GE and other biggies have to dig in and pay and furthermore convince shareholders (whoever they may be), of the soundness of their business decisions.

Meanwhile House Speaker Boehner who the morning after the election held out an olive branch just as Obama did, says tax rate increases are ‘off the table.’ Period!  THEN he said and continues to preach: tell us what tax deductions you want to eliminate and we will talk. In other words, it’s up to you Mr. President to tell us…and stop eliminating social security and Medicare reform. Mr. Boehner appears to know nothing about negotiation. Obama’ response to the tax rates comment was to oppose any changes to entitlements. Period. Of course, he did…and will eventually give in but only if the GOP concedes the tax rate increases on the top 1% (still, no one is mentioning that the first $250,000 will not be impacted – for anyone…except the across the board increases which are mandated for everyone.

Back to the brilliant Sen. Graham, “This offer doesn’t remotely deal with entitlement reform in a way to save Medicare and Medicaid and Social Security from imminent bankruptcy,” Last time TB checked, imminent meant likely to happen immediately. Let’s see Social Security is bankrupt in three decades and Medicare in one…that hardly qualifies as ‘imminent’ even from one of our ‘eminent’ senators.

Despite losing the election the GOP continues to cite gains in two areas: married women and white males. Hold that thought because it is a recipe for distinction. Which classes are growing the fastest?  Minorities…oh and they also lost ground with Asian voters who are arguably the hardest working on the planet.  Now they are, to protect their biggest donors (just as the Dems are trying to protect the impotent labor unions), fighting a battle they can’t afford to lose. It now appears we will go over the fiscal cliff (sic), most likely for a brief scary period, then work out an agreement that hurts both sides. But the worst thing is the one not even being addressed by the GOP, and that is the ‘debt ceiling’ that Obama and the Dem leaders want them to give up…and well they should. It is what will push us closer to default and another lowering of our credit rating and credibility as debtors. It is a stupid game…just like the misuse of the filibuster…and a dangerous one.

Its greatest impact is on the global financial community when it merely means appropriating the money to pay for the things Congress passed…the GOP had no problem with it for eight years under their man…a true spendthrift Congress!

Lastly, another spurious argument by the GOP: Obama played golf 104 times in his first term. Really? Who holds the record? Eisenhower with 800 for EIGHT years! Furthermore, isn’t the president allowed to have any relaxing time…healthy stuff like getting out in the fresh air, away from the office…bet a lot of CEO’s cringed when that argument was brought up…remember those Wall Street CEO’s who were out on the golf course rather than averting a crisis? Ace Greenberg of Bear, Stearns, comes to mind.

Vacation days? 48 for Obama…1,020 for Dubya… the most of any president…the best: Clinton, Hoover, Reagan, Carter…in that order. Get real, people…do you want a president to keel over at his desk from exhaustion (wait the GOP would welcome that).. Furthermore, just because they are on vacation doesn’t mean they aren’t up to date with what is happening – their staffs are always with them (sounds like the Lord’s Prayer).

Have a great week but do get your facts straight because the rest is all blather.


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

Volume was huge at 3.94B shares vs 3.34B. NYSE shares executed without the aid of the ETN market surged to 1.18B shares, highest since 9/21 from a weak 682M shares. There have been just 20 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 18 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 166 sessions have been less than 800M shares (73%!). Since 2/29 there have been just 27 ‘average’ days (mostly down!), and just 22 have been above 900M – 773M is the 12 month average. Since 11/1/11 there have been just 18, 1B share days…14 in 2012! Since 2/6 there have been 73 sessions less than 700M shares. 238 of the last 261 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 barely positive: +1.2x vs +2.5x vs +2.3x vs -1.3x vs -1.3xon NYSE and 1:1 vs +2.7x vs +1.4x vs -1.2x vs +1.2x on Nasdaq. Breadth was similar: NYSE: +1.3x vs +3x vs +4.2x vs -2.2x vs -1.5x on NYSE and +1.1x vs +2.5x vs +3.3x vs -1.1x vs +1.8x on Nasdaq. New 52 week highs climbed to 206 vs 154 vs 143 vs 170 vs 141 (768 is cycle high, 28 low), while new lows rose slightly to 43 vs 38 vs 62 vs 48 vs 48. The ratio remains positive: +5x vs +4x vs +2.3x vs +3.5x vs +2.9x. Recent high was +7x! The S&P VIX rose to 15.87 vs 15.09. 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 +0.3% vs +0.8% vs -0.7% vs -0.3%;  Dow Transports -0.5% vs +0.6% vs +0.7% vs -0.2% vs +0.7%;Dow Utilities +0.9%! vs +0.5% vs +0.3% vs +0.1% vs +1.2%; S&P 500 FLAT vs +0.4% vs +0.8% vs -0.5% vs -0.2%; Nasdaq Composite -0.1% vs +0.7% vs +0.8% vs -0.3% vs +0.3%; Nasdaq 100 -0.1% vs +0.6% vs +0.9% vs -0.4% vs +0.5%; Russell 2000 -0.2% vs +1.2% vs +0.5% vs -0.2% vs +0.2%; NYSE Financials +0.1% vs +0.8% vs +0.5% vs -0.7% vs -0.5% (KBW Banks -0.2% vs +0.3% vs +0.3% vs -1.3%! vs -0.4%; Nasdaq Banks flat vs +0.7% vs +0.1% vs -0.8% vs -0.1%; NYSE Brokers +0.3% vs +0.4% vs +2% vs +0.1% vs +1%.NYSE Financial Leaders: BAC +0.3% vs +0.7% vs +0.3% vs -1.8% vs -0.7%; C -1.8%!! vs +0.6% vs -0.1%. No other leaders.

Global equities higher, except China which is hammered: FTSE +0.2% vs +0.3% vs +0.9% vs-0.3% vs +0.4%; CAC 40 +0.8% vs +0.3% vs +1% vs -0.3% vs +0.3%; DAX +1%! vs +0.4% vs +0.7% vs -0.2% vs +0.6%;Nikkei +0.1% vs +0.5% vs +1% vs -1.2% vs +0.4%; Hang Seng DOWN 1.2% vs +0.5% vs +1% vs -0.6% vs -0.1%; Korean KOSPI +0.4% vs -0.1% vs +1.2%! vs -0.8% vs +0.9%;Indian Sensex -0.1% vs +0.9% vs +1.8%! vs closed vs +1.7% vs +0.2% vs -0.1%. U.S. stock futures rallying: DOW +56;  SPX +6.80; NDQ +18.50.

U.S. treasury bonds little changed Friday but falling overnight: 10 yr 1.65% -3/8 – record low of 1.40%; 30 yr 2.85% -13/16. Long TIP 0.33% +5/16 – 0.25% is the record low!The 5 yr TIP yields –1.50%; 10 yr -.85%.T-Bills: 0.11% 1 month; 0.08% 3 months; 0.13% 6 months. Reverse Repo 0.29%. 3 mo. Libor 0.31%; 6 mo. 0.526%.  European problem sovereign 10 years, Germany-bench: 1.43% +4; Japan 0.70% -1; Italy 4.39% -10; Spain 5.15% -12; Greece 14.78% -166!!!…on 9/20: 19.75%; Portugal 7.28% -16; Ireland 4.28% -8.

Gold closed lower on a NEGATIVE key reversal (higher high, lower low, close below prior day’s low!) and remains below both the 40 and 50 day m/a’s. It closed at $1712.70 -$16.80. On 10/4 it closed at $1796 highest since 2/29 and it has lost $73 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 $1732, the 40 day, and $1741, the 40 day.Support 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 $88.91 +.84,above the 50 day m/a. SUP at the 50 day (88.63), then the 50 day (87.93), and RES at $90 and the 200 day (93.82), finally flattening! It is currently $90.19 +$1.28.


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