1/10/13…more crosscurrents

From The Friars Club Encyclopedia of Jokes: “What’s the difference between an optimist and a pessimist? An optimist created the airplane; a pessimist created the seat belt.” And…

“Things are bad. I saw two fellows downtown carrying those signs reading ‘The End Is Near’ – and they were synchronizing their watches.

Bloomberg Quote of the Day: “A day without sunshine is like, you know, night.”

 – Steve Martin

Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Unexpectedly Rose Last Week to 371,000

*Commodities Rise on China Exports as Spanish Bonds Gain After Debt Auction

*Nokia Says Profit at Mobile-Phone Business Beat Its Estimates; Shares Jump

*Cantor Expansion sputters as 41% of Lutnick’s Touted Hires Exit the Firm – ouch!

*Draghi Keeps Rates Unchanged as Improving Confidence Silences Calls for Out

*Bats Says System Errors May Have Caused Mispricing of Thousands of Trades

*Liquidity Splits Corporate Bond Market Most Since Crisis – liquid bonds firm!

*Lew-for-Geithner Switch Closes Curtain on Era of Tight Fed-Treasury Ties

*BOE Refrains From Adding Stimulus as Credit Program Shows Initial Success

*Molycorp Cuts Sales Forecast After Missing Rare-Earth Target; Shares Drop

*States Helping Companies Pay U.S. Workers to Trim Unemployment Costs

*IBM Is Granted the Most U.S. Patents for the 20th Year With Record 6,478!

*UBS Retreat Plotted at 437-Year-Old Castle as Credit Suisse Attacks Costs

*Obama Choosing Lew for treasury Adds Fuel to Fight Over Budget Priorities

*Kurdish Women Activists Are Assassinated in Paris as Turkey Talks With PKK

*Obama’s 81% New York City Backing Surpasses All Records From 1898

*Cameron Lawmakers React With Fury to U.S. Advice on U.K.’s EU Membership – !!!  

An up session that more or less negated Tuesdays loss, the second straight down session following Friday’s mixed session – earnings the culprit in both days??? Hello…does any of this make sense to you, investor? All indices were up except Dow Utilities which posted a 0.3% loss. Nothing to see here. Total NYSE volume rose slightly to 3.63B shares vs 3.56B vs 3.29B vs 3.42B vs 3.82B vs 4.2B. Trades executed on the floor of the NYSE dipped slightly to a still weak 672M shares vs 692M vs 626M vs 651M vs 707M vs 859M shares. Advance/declines and Breadth were modestly positive at about +2x. New 52 week highs hit 713 a week ago today and rose yesterday to 440 vs 314 vs 316 vs 428 vs 437 while new lows dipped again to a weak 12 from 16. After closing at 22.70 on 12/28, the S&P VIX volatility measurement was little changed at a near 12-month low (13.32 on 8/17) rising to 13.81 +.19.

Global stocks higher for a second day, except France -0.2% and India, flat. U.S. stock futures rising and near session highs: DOW +37; SPX +6.10; ND! +16.

The bond market closed slightly weaker yesterday and is off again overnight. The 10 yr note is 1.90% vs 1.87%, and the 30 yr 3.10% vs 3.07% – well above the old 3% high set on 12/18! TIPS also slightly weaker at 0.45% vs 0.44% – but back from the 0.22% record low set on 12/6! Reverse Repo rate fell to 0.17%! Libor is starting to slip at 0.30%, 3 months, and 0.498% six months. Foreign bond rates are mixed again with Germany, U.K., and France slightly higher while submerging markets FELL: Italy 4.16% -10; Spain 4.915 -20!; Portugal 6.23% -10; except Greece 11.52% +17!

Gold closed slightly lower at $1655.50 – $5.50, still below the 200 day m’a with huge resistance at $1700! The $1636 low on 12/21 – lowest since 8/21 is now key support. It is still weak at $1660.30 +$4.80. Crude was little changed for a fifth day after breaking above $92 on 1/2, closing at $93.10 -.05 – still well above the 40/50 day, and the 200 day: $91.71! Overnight however it is soaring at $94.05 +.95 – highest since 9/19!

…since many of you see TB as an Obama apologist (only in the sense that everytime he asks for something someone in Congress rips him to shreds), but the appointment of Jack Lew, his chief of staff, treasury secretary is an in-your-face move. The press sees it as a shift from crisis mode to rebuilding the economy while the right sees it as less focus on budget cuts. While something has to be done however, an austerity budget at this point in the economy would be a ‘fatal error.’ What needs to be done is setting a framework to be implemented as the economy improves, something the GOP extremists will balk at.

The nomination of Sen. Hagel as defense secretary is interesting as he is a former GOP senator. Right out of the chute Sen. Graham opposed the choice as he has everything else since he started the ‘get Rice’ campaign with Sen. McCain. Interestingly, some in the GOP are out to get Graham for not being conservative enough? What do they want, a fascist? TB concurs with the sentiment that even the revered Ronald Reagan couldn’t get the nod today…far too liberal! It seems that moderate is now about where Goldwater stood three decades ago.

Meanwhile the story yesterday that GE is joining Boeing in making donations to congressmen they opposed but who beat their opponent is a new wrinkle on an old game. Smart on their part, you neutralize the opposition while they are dialing for dollars (something they all hate to do…wouldn’t you if you did it for thirty hours a week?). No surprise that both of these behemoths derive substantial revenues from the military and therein lies the rub.

Other than entitlements the largest budget item is defense and to the GOP it is sacrosanct. Any fool could cut billions from the budget but not the GOP, no sir…let’s not place the entire burden on the working class who despite the propaganda have paid into both Social Security and Medicare – albeit if they live long enough they will get back far more than they paid in – but then is it their fault that Congress not only required SS trust funds be invested in treasury bill equivalents but spent it on their own pet projects leaving a trail of dubious valued IOU’s.

Buy bank stocks! The more they lose in settlements the more they rise…to a point. Analysts are all over CNBC touting them for their value and opportunity despite the settlements and the unknown power of newly elected Sen. Elizabeth Warren who will serve on the banking committee. Don’t forget how the affable Jamie Dimon of JPMorganChase derailed her for the consumer protection agency she designed even though she met with him to try to smooth their differences. Old JP would be so proud of Jamie…other than him costing the bank $5 billion by pushing London to take more risk (wasn’t that what Rubin told Citi – Dimon’s old firm where he was mentored by Sandy Weill – and the results were similar). There is a total disconnect between bank earnings, compensation of senior management and their total lack of accountability, and the dividends shareholders receive. This for a sector that nearly destroyed not only the U.S. but the entire world’s financial markets. Now that folks is POWER!!!

So while you are writing out your checks to the IRS consider how the very people who screwed us are benefitting and continue to do so with the full blessing and admiration of the GOP – and not just the extremists in the party. Someone has to care for Americans. Wayne LaPierre and Grover Norquist most certainly don’t!

Have a great day!


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


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