2/1/13…haggling over Hagel

From the Friars Club Encyclopedia of Jokes: “Failure has gone to his head.” – Wilson Mizner speaking about  a businessman who remained incorrigibly optimistic.

Bloomberg Quote of the Day: “Action is the foundational key to all success.” – Picasso

Bloomberg Top Stories:

*U.S. Monthly Payrolls Rise After Jumping More Than Forecast at End of 2012

*Stock-Index Futures in U.S. Extend Advance as Payrolls Climbed in January

*Deutsche Bank Said to Place $409k Limit on Bonuses Paying Out This year – austerity?

*Gross Says Increase in U.S. Jobless Rate Gives Bond Yields Room to Decline – ???

*Chevron 4th Qtr Profit Increases 42% on Stronger Refining Results – shy of estimates!

*Gilead Seeks More Cancer Drug Deals to Underpin 79% Stock Advance

*Blast Rocks Pemex Headquarters in Mexico City, Killing 25 – an explosion not bomb

*Ed Koch, Mayor Who Saved New York From Brink of Bankruptcy, Is Dead at 88

*Departing Clinton Says Iran Shipping More, Better Quality Arms to Assad

U.S. Non-Farm Payrolls rose by 157k in January (+166k private, -9k govt). This is in line with estimates and  median of 165k.  November and December were revised up adding a combined 127k. Average Hourly Earnings rose by 0.2% (+2.1% year over year).

The Unemployment Rate rose to 7.9% vs 7.8%, really up 0.5% due to rounding. The labor force was slightly higher and the participation rate was steady at 63.6%. Household employment rose by just 17k but adjusting for population fell by 110k.

Market Reaction 9am EST: Bonds had about a ¼ point swing from negative to positive. Stock futures gapped up last night and are sharply higher following payrolls, led by Nasdaq +23! Gold higher by $12, Crude little changed. Dollar slightly weaker.  

Volume was the highest in nine sessions…that’s the good news…the bad is that the major indices were all down except Dow Transports +0.4% – but fell 1.6% Wednesday and the Russell 2000 +0.6% vs -1.2%!!! The S&P closed just below 1500 after holding there for three straight sessions, closing at 1498. Since broaching 1500 last Thursday, the S&P 500 has traded in a 7-11 point range each day. Dow Financials fell by 0.1% vs -0.3%. Advance/Declines and Breadth were mixed with NYSE stocks +1.1x/1:1 and AMEX stocks +1.6x/-1.2x respectively. The VIX was little changed after rising above 14 on Wednesday: 14.28 -.04 – should fall today due to payrolls, right?.

NYSE volume was a 3.91B shares vs 3.69B while shares traded on then NYSE were 933 vs 705 vs 721 vs  656M – highest in nine sessions.

European stocks generally higher by 0.5%-1.4% (France), Asia weaker, ex-Japan +0.5%. Hang Seng flat, Kospi -0.2, India -0.6%, Sen. U.S. stock futures gapped up overnight and higher following payrolls, at session highs: DOW +111; SPX +10.40; NDQ +21.75!!!

Bonds were little changed yesterday but strong following payrolls, albeit still weak with the 10 yr Treasury at 1.94% vs 1.98% +7/16 and the 30 yr at 3.14% vs 3.17% +5/8. The long Tip is 0.50% vs 0.54% +1/2. Foreign bond yields are lower by 2-4 basis points except the problem countries which are up from 3-5 bps. Nothing to see here.

Gold cant catch a break and after recovering much of the early week losses fell again closing at $1662.00 -$18.60, totally reversing Wednesdays gain! It is again below the 200 day and the 40 day with major res at $1690, the 50 day. The $1636 low on 12/21 – lowest since 8/21 is critical support!  It is sharply higher following payrolls however to $1673.80 +$11.80, taking back the 40 day (1679) and the 200 day (1670). Crude remains lackluster but at solid levels falling just 45 cents to $97.49 after Wednesday’s $1.13 gain with a high of $98.92 not seen since 9/17. Overnight it is $97.50 +.01.

…how does the GOP have such an ability to shoot itself in the foot? One might think that the stunning loss of Romney’s, that they didn’t even consider possible, and last weeks ‘retreat’ in which the moderates (conservatives?) slammed the right wing extremists, but no…they continue to obfuscate and nitpick in the Senate over things like how many angels can dance on the head of a pin!

Damn a vet who along with his brother was wounded for not being a warhawk. How many vets do you know who are??? Especially Viet Nam and one has to wonder how many of those whose lives have been upended (voluntarily), or lost limbs or lives would side with Hagel. How many of those stalwart Republicans, McCain excepted, even served…or did any public service other than what they consider their present jobs to be?

Not only that, with the exception of Joe Biden’s son and a few others, their families are unscathed by the war they so eagerly wanted. We went to Afghanistan to get Bin Laden, he is gone but the Taliban is gaining strength and with Al Qaida support…sobeit. We would have gotten Bin Laden a decade ago had he not been tipped by Mujahadeen acting as double agents. Then we went to Iraq on ‘sound intelligence’ of WMD…provided of course by opportunists who wanted to be in control…no other verification, yet we had Powell take all those 8×10 glossies to the UN and make fools of ourselves. Then after taking Baghdad Dubya declared ‘mission accomplished’ when the job had just begun. Even in seizing control of Baghdad we botched it, allowing both the Central Bank and the Museum of Antiquities (the most important in the world), to be looted while we guarded those precious contracts in the oil ministry. Now we are out of Iraq for the most part and what have we left? A better country? True, it is good to be rid of Saddam but it wass folly to not worry about what kind of government would succeed him. He was not a threat, in fact, he was a balance to Iran…look how they have ‘acted out’ since his demise!

Bush 43’s total domination by the neo-cons…who Bush 41 loathed…was the problem. Hagel alluded to this yesterday when he talked about alliances…real ones…not the ones where we say ‘this is what we are going to do, come along if you like but keep your mouth shut.’ Hagel like Obama, believes in more patience. We are perceived better when we handle foreign affairs like Bush Sr. and provide support for insurgents rather than at first blows put boots on the ground…then spend a decade or more trying to get them out: like Korea – over 50 years! Hagel also believes in knowing who will run the successor government…the GOP learned nothing from Iraq and Syria is Iraq on steroids.

As for Israel…Hagel is correct: we will support Israel so long as their interests converge with ours…not to our detriment. Netanyahu is a loose cannon at times and the Israeli’s showed their concern in this weeks elections. It does not serve our interests – or theirs -to back Israel when they become the aggressors. In some ways, they have been their own worst enemies…fences and walls, keeping law-abiding Palestinians from their jobs yet educating them…this is not TB speaking but Tom Friedman in From Beirut to Jerusalem.

Have a great weekend and enjoy the Stupor Bowl!


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


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