2/5/13…compromise or compromised?

TB’s Song of the Day:

Just  like a rubber ball, I come bouncin’ back to you
Rubber ball, I come bouncin’ back to you

– Rubber Ball, sung by Bobby Vee, 1960

From the Friars Club Encyclopedia of Jokes: Just as the prisoner was being strapped into the electric chair, the priest said, “Son, is there anything I can do for you?” The prisoner said, “Yeah, when they pull the switch, hold my hand.” – Dick Gregory

TB’s Quote of the Day: ”Work is the curse of the drinking class.” – Oscar Wilde…while the reverse is true, so is this one in a world obsessed with capital gains as work.

Bloomberg Quote of the Day: “Failure is success if we learn from it .”–Malcolm Forbes

Bloomberg Top Stories:

*ECB Balance Sheet Drops to 11-month Low as Banks Repay Loans

*Dell Board Said to meet Last Night to Vote on $24B Leveraged Buyout– hmm Compaq?

*Stocks in Europe Rebound from Slump a Italy Note Yields Fall; Yen Weakens – yawn!

*UBS Reports $2.08 Billion Fourt6h-Quarter Loss After Libor Fine, Job Cuts

*UBS Cuts Bonus Pool 7% After Reporting Loss on Reorganization, Libor Fine-BONUS?

*S&P Sued by U.S. Over Inflated Debt Ratings at Center of Financial Crisis – NOW???

*Duke Energy Will Permanently Shut Crystal River Nuclear Reactor in Florida

*Lebedev Provokes Putin as Trial of Tycoon Reveals No Russian Investor Safe – DUH!

*China Targets Japan Naval Vessel With Radar as Tensions Rise Over Islands – !!!

*Defense Contracts Plunged 67% in January as U.S. budget Reductions Loomed!!! – despite budget accord, Defense is not hiring and projecting 46k full and part-time layoffs! Way to go Tea Party! You rock!

*Pemex Blast That Killed 37 People Blamed on Gas Buildup in Mexican Probe

*Yale Suing Students After Defaults Reveal U.S. Crisis Over Loans to Poor – !!!

*Internet Class Tuition Helps Public Universities Offset State Budget Cuts

 

Total NYSE Volume plunged from the two day tie at 3.9B shares, the highest in nine sessions, on a day that rocked stocks following post 2007 highs on both the Dow and S&P 500 (while floor volume on the NYSE fell again to a weak 694M shares vs 757M vs 933M)…as both the Dow and S&P withdrew from their respective 14,009 and 1508 as all indices fell sharply led by the NDQ 100 -1.8%, Composite -1.5% and Russell 2000 -1.3% while the Dow lost 0.9% and the S&P 1.2% (Apple a major factor but not THE factor!) 95 of NDQ 100 (-48) members were down led by Apple -9.4 index points, ORCL -4.6; GOOG -3.8, MSFT -3.7, and six others losing more than 1 point! Remember Apple created huge distortions in S&P 500 and the two Nasdaq indices gains last year, causing S&P to cut their weighting in half!  NYSE Financials lost 1.4% with BofA most active dropping 2%. Advance/Declines and Breadth were very negative at -3.5x vs +2.6x and -5x vs +3.9x. The VIX which plunged on Friday by 1.38 to 12.90 reversed itself climing 1.77 to 14.67, highest since Jan.2! What does this tell us about the future…nothing… absolutely nothing…except, don’t be complacent! Ever!

European stocks strong again on headlines news but compare to Monday, while Asia is weak: UK +0.7% vs -1.3%; France +1.2% vs -1.7%; Germany +0.4% vs -1.6%…dead cat bounce? Japan -1.9% vs +0.6%, Hang Seng -2.3% vs -0.2%, Kospi -0.8% vs -0.2%, India -0.5% vs -0.2%, U.S. stock futures traded in a wide range (80 points on the Dow) and are mid range: DOW +59; SPX +7; NDQ +12. Market opening strong with Dow +85.

After rallying yesterday bonds are weak again overnight with the 10 yr Treasury at 2.01% vs 1.94% -7/16 and the 30 yr at 3.20% vs 3.16% -3/4. The long Tip is 0.54% vs 0.51% -1 pt.. Foreign bond yields mixed: Germany 1.66% +5; Japan 0.78% -2; Australia 3.49% -10; Italy 4.43% -3; Spain 5.34% -7; Portugal 6.27% -4; Greece 10.69% -1

Gold rallied a bit more for a second session on an inside day but remains below the 40 and 50 day but closed $6 above the 200 day m/a. $1676.40 +$5.80. The $1636 low on 12/21 – lowest since 8/21 is critical support!  It is up again this morning again at $1684.60 +$8.20 with the 50 day as res at $1688. Crude was pounded losing $1.60 to close at $96.17 with a low of $95.89 – a 5 day low which negates Wednesday’s $1.13 rally to $98.92. Overnight it is $96.74 +.57.

(Mea culpa’s: yesterday TB said both the Dow and S&P were ‘market cap’ weighted. The S&P is but the Dow is ‘price’ weighted. As for the spread on the Super Bowl, TB was shooting from the top as he really didn’t know what it was but kept hearing 3 points. The Niners were favored by FOUR…so the number didn’t matter and wasn’t affected by the safety that ended the game. Too much Kaepernick hype apparently. Remember those are not stats they are merely the way the bets are running…shudda taken the Ravens!)

…our government…both our Congress and our President are not only at loggerheads…but not representing the interests of the people. Meanwhile, the Tea Party and its wealthy backers (primarily the Koch brothers), have made fools of the middle class by promulgating lies. This has caused a moderate (TB for one) to be labeled a liberal and a conservative Republican to be labeled a moderate or worse.

It is easy to understand Obama taking a victory lap after the disparaging remarks that have been made about him over the past four years…including and most notably Dick Cheney’s faked injury to avoid standing during the swearing in and Mitch McConnell saying the number one priority was to make him a one-term president. This in the greatest financial crisis of our lives. Oh, and Dick, you weren’t embarrassing Obama it was you who should be ashamed for not respecting the office and the voters.

Ah, then came the fact that he had played golf 100 times during his first term…just two with GOP members. This ignores the fact that Ike played golf 400 times or more in EACH of his terms…got it? The president has a right to relax and at least he was within a short distance of the ‘office’ most of the time instead of in California or Texas. Sure, he should have reached out…but that would have been anything but relaxing in this contentious environment. Invite a tea party member? Heck, any GOP member would incur the wrath of the party for doing so…think about it!

So how should he act? Here is an article from the Minneapolis Star-Tribune from Sunday’s Op-Ed section that is from a variety of writers on other presidents, an excellent read: second term presidents It clears up some myths. But the best is that he should act like FDR and bury the past and try to deal with it. His too was a contentious Congress.

TB is still amazed and amused at the GOP retreat in which they are proposing changing the way electoral votes are counted so they are by district, not all for one. That is now left up to the states and some do so while most do not. Conservative Wisconsin opposes it, both Gov. Walker and Rep. Ryan because they would then lose swing-state status so who would come there? Why do these ideas always float after things have gone against you?

Recall it was the GOP who frustrated by FDR being elected three times pushed through the 22nd Amendment then wished they hadn’t when Ike was in his second term! Also, the GOP conveniently forgets that since they have a majority of rural counties and districts, that offsets the major liberal cities…who pay the most in taxes, while it is the others who are net recipients of benefits…consider farm subsidies, etc. The GOP had better come to its senses or it will not even be a factor in the next election as the minority becomes the majority!

This brings us back to TB’s theme which is that it is stupid and irresponsible for the wealthy to try to preserve the status quo when everything they do increases their wealth and thus the wealth gap while scorning wage earners. Disagree? That is your right but you had better look at inflation-adjusted wages.

Another Star-Tribune op-ed Sunday cited the negative effects of subsidizing companies to move to a state. He proposes a 100% federal tax on the subsidies which would put that to rest. He also cites evidence that the value is mainly to wealthy team owners and companies where the value cannot be accurately computed.  cost of job subsidies

Pity that Boehner has already said no to ANY further tax reform…which assumes that the fiasco we just had was ‘tax reform’ it was anything but!!!

Hope you all have a prosperous day!

TB

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

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