12/7/12…just another payrolls Friday

December 7, 1941…a day of infamy, Pearl Harbor Day…which caused this song:

Remember Pearl Harbor, as we march against the foe…the end of U.S. pacifism.

December 7. 1994…we learn that Orange County, CA filed for bankruptcy at 5pm the previous day  in the biggest bankruptcy by a municipality of all time…and caused merely by portfolio speculation, not economic events in a battle egos between two treasurers, the other L.A. County…whose treasurer went on to San Bernardino County, and was later convicted of receiving bribes in the form of travel ‘perks’ by the brokers it did business with…nice, huh? Orange Country forever changed TB as he testified twice before federal grand juries as a victim (his clients), former ML employee, and expert witness. In the second he was the only money manager willing to testify…the others all backed away fearing reprisals from Merrill…they wouldn’t even testify under subpoena as TB did. His satisfaction came when Merrill blinked and settled the case right before the deadline. It’s good to do the right thing…even if it turned his hair white!  

Bloomberg Quotes of the Day:

“Greatest Fools are oft most satisfied.”  –Nicolas Boileau

…certainly seems applicable these days…don’t ya think? TB

“The reward of a thing well done is to have done it.” – Ralph Waldo Emerson

…of course the money certainly helps! YN


U.S. Non-Farm Payrolls rose by 146k in November vs 85k median forecast! Revisions however cut Sept/Oct by 49,000…so about in line…no conspiracy theories please!!!

But Factory jobs fell by 7k while Construction fell by 20k…meanwhile Services rose by 169k where they have exceeded the total private jobs changes for two of the last three months and barely missed in October (171k vs 189k)! That is the bad news as these are mostly lowpaying jobs. To wit: Financial Activities rose by just 1k, Professional Business Services buy 43k …the remaining 125k were Temp workers, Health and Education and Leisure and Hospitality…capische?

Meanwhile the Unemployment Rate, as reported in the Household Survey dropped 0.2% to 7.7% but eliminating rounding about a 0.1% decline. It was more than due to a modest decline in the labor force of about 350k, while those not in the labor force fell by 550k. The Augmented Unemployment Rate fell by just 0.1% to 9.2% and the U6, which includes Part-Time for Economic Reasons also fell 0.2% to a still very high 14.4%.

Average Weekly Hours worked are stagnant at 34.4 and Average Hourly Earnings rose by just 0.2% – same as Average Weekly Hours – niggardly gains when we need BIG! They are up just 1.7% the last 12 months for both categories!  Manufacturing hours rose by just 0.1% to 33.7% – where they have been for a year! Manufacturing Hourly and Weekly wages were also up just 0.2%  They are up just 1.3% the last 12 months for both categories! 

Market Reaction (9:15 EST): Bonds reversed and plunged with the 10 year yield rising from 1.57% to 1.62% or -3/8, and the 30 year to 2.81% vs 2.78% -13/16…the crazy long TIP however just moved back to 0.23% from 0.22% – avoid!

U.S. Stock Futures also reversed with DOW +53 but surged to +78; SPX +4.66 and at session high; NDQ +18.41 – session high was +23. Could be an interesting day! The Dollar Index was little changed before the number but is now up to the highest level since 11/23. Gold is now off $4 to 1698.10 while Crude is now up just 15 cents…little effect there! Happy Trading!

Bloomberg Top Stories:

*Payrolls in U.S. Rose 146.000 in November as Jobless Rate Declined to 7.7% – hey, conspiracy theorists: still think Obama is cooking the books? To what purpose?

*U.S. Stock-Index Futures Gain After Job Growth Tops Economist’s Foreasts – recovery from Superstorm Sandy? Could be part of it…what does business know now it didn’t?

*ECB Governing Council Said to Have Majority Supporting Interest-Rate Cut – to what?

*Bundesbank Lowers 20163 German Growth Forecast to 0.4% on EU Crisis – hello!!!

*London Fund Managers Become More Confident on U.K. Economy – gimme a break!

*London Whale’s Unprofitable Trade Back in Favor as Junk bond Allure Fades – just goes to show you that Mr. Dimon and Co’s management was pure speculaton!

*Netflix CEO Hastings Faces SEC Threat as Facebook Posting Drives Stock up – he posted that Netflix view ‘exceeded 1B hours’ of videos in June…stock rose 6.2% on that!

*Chinese-Group Said to Be in Talks to Acquire AIG’s Aircraft-Leasing Unit – TB may not have been off the mark when he speculated China Mobile may want to buy Nokia!

*JPMorganChase Investment Pool Is Said to Decline as Much as 2% – Two percent???

Is that a typo? What sacrifices that team is making…but will it go to Jamie instead?

*BlackBerry Still Loved in Asia Where RIMM Can’t Afford to Lose – can u spell loser?

*New Jersey Seen Most Vulnerable to Widening of Minimum Tax – Christy? Hello?

*Lone German Keynesian Bofinger Says Redemption Lies in Pooling Euro Debt – that’s Bo-fan-jay to you…Keynes is dead but rolling over in his grave…slowly, very slowly!

*Democrats Hint at Entiltement Cuts Signalling Shift in U.S. Budget Talks – Go for it!

*Bernanke’s Fiscal Cliff Analogy Overstates Immediate Harm to U.S. Economy – !!!

*You Know Students Are Out of Control When Harvard Pushes New Regulations – !!!

*Goldman CEO Blankfein Said to Buy Hampton’s House Listed for $32.5 Million – still doing ‘god’s work’…see, GOP’er’s THAT is the one of the people you are sacrificing to protect. Think about it! 

In addition to Wednesday’s Deutsche Bank hidng $12 billion in losses, yesterday Reuters  announced that HSBC may have to pay a $1.8B fine by Christmas for money laundering Iranian funds…the Mafia would drool for the opportunities provided and taken by the big banks…so why do we keep protecting them? Ask your elected officials…they know damned well why!

Apple update: after falling to $518.63 yesterday, lowest since ll/16s’s $505.75 intraday low, it rebounded in what can at best be termed a ’dead cat bounce’ of about 50% of the loss from Wednesday (+1.6% vs -6.5%!). It was the third straight lower high and lower low. Over the past three sessions volume has totaled 97M shares, high 40M yesterday vs an average of 21.7M this year. Since the last bout of big volume in the first quarter, there have been just 3 days where volume has been close to 40M, all in November (normal volume is 20M shares)…is the pain over? Ask the hedge funds who have huge positions and whose yearend cutoff is 12/26 (coincidentally TB’s birthday in case you were thinking of a present). Stay tuned!

Yesterday’s NYSE volume fell back from 4.14B shares to another puny 3.17B shares. REAL trades on the floor also declined to 616M shares from the ‘surge’ to 759M. There simply is no retail…can you blame them? Advance/declines and breadth were barely positive again. Nasdaq breadth of +2.3x was due to the Apple ‘rally’ while A/D’s were 1:1. It also comprised 7 of the 18 points gained on the Nasdaq 100

Bond market closed little changed and is up slightly overnight: 10 yr note 1.57%, 30 yr 2.76%. The big story remains TIPS…with no sign of inflation in sight but risk of fiscal cliff reduced which caused the stock rally yesterday, the 30 yr TIP yields just 22bp’s over the inflation rate – another record low. The long TIP yields MINUS 254bp’s to the long bond and -202 to the 10 yr! Looks like a setup for yearend…buyers caution!

Gold was up $8 closing at $1701.80, back above $1700…barely above $1700 on an unconvincing ‘inside’ session and remains well below the 40/50 day moving averages,while Crude lost $1.62 closing at $86.26, lowest since 11/15, and is well below both the 40/50 day m/a’s. Overnight Gold is $1696.20 -$5.60. Crude is off 44 cents and weak.

– – –  . . .  – – –

(Correction: a blog reader informed TB that the ice chunk that fell off in Greenland was NOT bigger than the U.S. but bigger than Manhattan…TB must have heard it from a broadcaster in the Big Apple. Mea Culpa!)

…why would any rational person trade this market? OK, jockeying for tax purposes, but no other sane reason. Meanwhile the GOP continues to disintegrate by the hour.

Sen. Jim DeMint (or as Herb Caen would have said it, DeMint Jim), announced he is leaving the Senate to head the conservative and about to become ‘uberly’ so, Heritage Foundation which makes the Hoover Institute look like a bunch of cock-eyed optimists! Hope we find out what his salary is going to be…bet is significantly more than his Senate salary…and he can still be addressed as Senator…not much meaning there though as former Dem Senator/NJ Governor Jon Corzine disgraced himself by not only bringing down MF Global but by trying to negotiate a sale when he knew it was going there – to get his own $40 million bonus…no wonder Goldman voted him out as Co-Chairman. So much for “if you can do it there you can do it anywhere…”

It is a sad state of affairs when one party created a fiscal cliff – an imaginary one which could have been solved at least a year ago but what would have been the political advantage in that…especially when there stated goal was to make Obama a one-term president (still think there were racial overtones or undertones there), and implied goal

was to have him leave office in disgrace. So much for the best-laid plans of…mice and men? Bring on the women…they most certainly couldn’t do worse and likely better!

Meanwhile the global banking system…of which the GOP has done its utmost to protect the biggest U.S. ones…including the faux banks of Goldman Sachs and Morgan Stanley…is embarrassing itself by the day…with lawsuits and fines continuing to pile up, and of course the bill is not footed by the perps but by you the shareholders? Ain’t that a ‘beatch?’ Heck, if they collect a few more there will be no fiscal cliff, imaginary or otherwise and at least a big chunk of that will be paid by the wealthiest in terms of shareholder value…they have so many ways to get you…

Well, TB has spoken far too long this week, with not one column falling below the 2100 words (total column including stats), so he will take a breather and let the payrolls summary fill up the rest.

Have a great weekend!


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

Volume plunged back from Wednesday’s solid 4.14B shares to a weak 3.17B shares. NYSE shares executed without the aid of the ETN market also plunged to 616M shares vs 759M vs 674M vs 658M vs 1.18B. There have been just 21 700M+ days since 8/3. The high ytd was 9/21’s 1.8B shares. 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 764M shares and since 6/29 just 696M shares– WEAK!!! 126 of the last 170 sessions have been less than 800M shares (74%!). Since 2/29 there have been just 27 ‘average’ days (mostly down!), and just 22 have been above 900M – 768M is the 12 month ave. and falling! Since 11/1/11 there have been just 18, 1B share days…14 in 2012! Since 2/6 there have been 76 sessions less than 700M shares. 242 of the last 265 sessions have been less than the 12 mo ave (91%)! Don’t go hear…yearend is coming!

Advance/Declines were about neutral: +1.1x vs +1.1x vs -1.1x vs -1.5x vs +1.2x on NYSE and 1:1 vs -1.3x vs -1.1x vs -1.2x vs 1:1 on Nasdaq. Breadth slightly positive: NYSE: +1.2x vs +2.3x vs -1.1x vs -2x vs +1.3x on NYSE and +2.3x vs +1.1x vs -1.1x vs -1.9x vs +1.1x on Nasdaq. New 52 week highs dipped to a weak 116 vs 130 vs 105 vs 226 vs 206 (768 is cycle high, 28 low), while new lows were 71 vs 78 vs 71 vs 51 vs 43. The ratio is barely positive: +1.6x vs +1.9x vs +1.5x vs +4.5x vs +5x. Recent high was +7x! The S&P VIX rose slighlty to 16.58 vs 16.46 vs 17.12 vs 16.64 vs 15.87! Tuesday was first time above 17 since 11/15. 17.54 is the 200 day m/a! The 12-month low was 13.32 on 8/17 while the 2012 high is 27.73 on June 4.

Here are the results of last 5 sessions: Dow +0.3% vs +0.6% vs -0.1% vs -0.5% vs flat;  Dow Transports -0.1% vs +0.9% vs +0.3% vs -1.1% vs -0.5%;Dow Utilities -0.3% vs +1.4%! vs -0.6% vs -0.7% vs +0.9%; S&P 500 +0.3% vs +0.2% vs -0.2% vs -0.5% vs flat; Nasdaq Composite +0.5% vs -0.8%! vs -0.2% vs -0.3% vs -0.1%; Nasdaq 100 +0.7% vs -1.1% vs -0.2% vs -0.2% vs -0.1%; Russell 2000 +0.2% vs -0.2% vs +0.2% vs -0.1% vs -0.2%; NYSE Financials +0.2% vs +0.9% vs flat vs -0.3% vs +0.1% (KBW Banks +0.3% vs +1.7% vs -0.7% vs -0.8% vs -0.2%; Nasdaq Banks flat vs +0.3% vs -0.5% vs flat for 2 days; NYSE Brokers -0.2% vs +0.9% vs -0.3% vs -0.5% vs +0.3%.NYSE Financial Leaders: BAC -0.1% vs +5.7% vs +1.1% vs -0.6% vs +0.3%. C +1.5% vs+6.3%!!! – remember those changes are only pennies on price. BAC holding above $10, closed $10.48. Second close above $10 since 7/11/11!!! No other leaders.

Global equities weaker ahead of U.S. payrolls, except Korea: FTSE -0.2% vs +0.3% vs +0.3% vs -0.1% vs +0.2%; CAC 40 -0.3% vs +0.2% vs +0.3% vs +0.5% vs +0.8%; DAX -0.3% vs +1% vs +0.3% vs flat vs +1%;Nikkei -0.2% vs +0.8% vs +0.4% vs -0.3% vs +0.1%; Hang Seng -0.3% vs -0.1% vs +2.2% vs +0.2% vs -1.2%; Korean KOSPI UP 0.4% vs +0.1% vs +0.6% vs -0.3% vs +0.4%;Indian Sensex -0.3% vs +0.5% vs +0.2% vs +0.2% vs -0.1%. U.S. stock weaker ahead of payrolls and at session lows: DOW -25; SPX -4.10; NDQ -4.75.

U.S. treasury bonds closed little changed yesterday and are up overnight…this has been the pattern this week: 10 yr 1.57% +1/8 – record low of 1.40%; 30 yr 2.76% +1/4. Long TIP 0.22% +5/16 – and another new record low!The 5 yr TIP yields –1.56% vs -1.54%; 10 yr -.94% vs -.92%.T-Bills: 0.05% 1 month; 0.08% 3 months; 0.13% 6 months. Reverse Repo 0.31%. 3 mo. Libor 0.31%; 6 mo. 0.52%.  European problem sovereign 10 years, Germany-bench: 1.29% vs 1.34%; Japan 0.70% +1; Italy 4.57% +1; Spain 5.48% +5; Greece 13.92%!!! vs 14.72% -45!!!…on 9/20: 19.75%; Portugal 7.38% +3; Ireland 4.45% +5. BIG DROP in GREECE AGAIN…and bunds!!!

Gold closed up $8 at $1701.80, after two straight closes below $1700 and worst since 11/5! It had an inside session following two lower highs and lower lows of $1686 not seen since 11/16 and remains well below the 40/50 day moving averages,while Crude lost $1.62 cents closing at $86.26, lowest since 11/15 and well below the 40/50 day m/a’s. Overnight Gold is $1696.20 -$5.60 ahead of payrolls. Crude is off 44 cents and remains below the 40/50 day m/a’s


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