From the Friars Club Encyclopedia of Jokes: “Happiness is having a large, caring, close-knit family in another city.” – George Burns, and…
Nothing in life is “fun for the whole family.” – Jerry Seinfeld
TB’s Quotes of the Day:
“If Arthur Anderson received the ultimate penalty for their part in the Enron and other fraud,” investment manager Barry Ritholtz blogged on Feb. 6, “I see no reason why Moody’s and S&P don’t suffer the same fate.” …nor does TB…still, why no bankers or even S&P prosecuted? Oh, and S&P had the chance to settle for $1B instead of the $5 billion the administration is now asking for, but S&P was afraid of more litigation from buyers of the securities who lost money!
“Why are the most risky loan products sold to the least sophisticated borrows?” –Edward Gramlich, former Fed Governor. He then adds,”The question answers itself – the least sophisticated borrowers are probably duped into taking these products.” He was 100% correct, then they went on to bundle them into pools which were sold to ‘smart’ investors who didn’t bother to study them with the exception of a few. Hence the email from an S&P employee, “I hope we are out of here before this house of cards collapses. Kudos to Congress for their stupidity!
“If you can’t take their money, drink their booze, screw their women, and still vote against them, you don’t belong here.” The late Jesse Unruh, Treasurer of the State of California who did all the above…a benevolent politician on the take, unlike Congress!
Bloomberg Quote of the Day: “Any idiot can face a crisis – It’s day to day living that wears on you.” – Anton Chekov…he didn’t count on the idiots in the U.S. Congress!
Bloomberg Top Stories:
*USPS Lost $1.3B in First Quarter – will Congress fight cutting Saturday service? Yep!
*Trade Deficit in the U.S. Shrinks More Than Forecast on Record Energy Reports
*Stocks in Europe Rise With Commodities as Spanish Bonds Gain; Yen Rallies
*Interdealer Brokers Emerge as Interest Rate-Rigging Scandal’s as Key Enablers L
*EU Leaders Prepare for Budget Cuts in bow to Cameron’s Demand for Thrift
*S&P as Sole Justice Target Ahs Wall Street Asking What Happened to Moody’s – wait!
*S&P Lawsuit Goes Before Clinton Judge Who Is Vietnam Vet, Ex-Prosecutor – !!!
*Deutsche Bank Is Said to Fire 10 London Energy Traders as Banks Retrench – !!!
*Airbus Said to Weigh Dumping A350 Lithium Battery to Avoid Dreamliner Woes–smart!
*AOL Rises After Reporting Advertising Gains Pushed Profit Above Estimates
*McDonald’s January Same-Store Sales Miss Estimates Amid Weakness in Asia
*Private Equity Purifies Pacific Ocean to Solve California’s Water Crunch
*Drug Users Turn Dealers in Death as Methadone of Bain Partners Hits Street – wait, isn’t that Romney’s firm? They wouldn’t do anything to hurt people to make a buck!
*U.S. Airlines Scrub 3,800 Flights to Ease Disruptions From Northeast Storm
*Tunisian Police Fire Tear Gas Near Funeral of Assassinated Opposition Chief
*Casinos Saturating U.S. Midwest Cannibalize Taxpayers’ Revenue Windfalls –Sick!
Total NYSE Volume has been stagnant at 3.48B-3.59B since last the two day tie at 3.9B shares, highest in nine sessions, as stocks put in a mixed day with little movement ranging from -0.3% (Dow) to +0.2% on Transports and Utilities. The Russell 2000 fell by 0.4% and the beloved NYSE Financials were the big loser -0.6% with volatile of late BofA -0.8%! Both Nasdaq indices were off less than -0.1%. Advance/Declines and Breadth were slightly negative, -1.3x to -1.9x.The VIX which plunged on Friday by 1.38 to 12.90 then reversed itself climbing 14.67, highest since Jan.2, rose a weak .09 to close at 13.50. One week till options expiry and given VIX swings it should be exciting!
European stocks moderately higher, Asia mixed: UK +0.5% vs -0.4% vs -0.2%; France +0.8% vs +0.1% vs -1.7%; Germany +0.4% vs +0.3% vs -1.4%. Japan -1.8%!!! vs -0.9% vs +3.8%!!!, Hang Seng +0.2% vs -0.3% vs +0.5%, Kospi +1% vs -0.2% vs -0.1%, India -0.5% vs -0.3% vs -0.1% vs -0.5% vs -0.2%, U.S. stock futures little changed, midrange in quiet overnight trading: DOW +7; SPX +1.90; NDQ +9.50.
Bonds closed FLAT yesterday and are up slightly overnight with the 10 yr Treasury at 1.95% vs 1.96% and the 30 yr at 3.16% vs 3.17%. The long Tip is 0.50% vs 0.52% +3/8. Foreign bond yields slightly lower: Germany 1.60% -1; Japan 0.75% -1; Italy 4.56% -2; Spain 5.34% -5; Portugal 6.38% -5; Greece 10.62% -2.
Gold took a modest hit yesterday back below the 40 day m/a closing at $1671.30 -$7.50. The $1636 low on 12/21 – lowest since 8/21 is critical support! It is off slightly this morning at $1668.40 -$2.80, breaking the 200 day (1670) with further res at the 40 day and 50 day ($1675-1683). Crude also off slightly closing at $95.83 -.79. Overnight it is $97.08 +.25.
…in a college history class TB learned how the Blitzkrieg of WWI turned into a ‘Sitzkrieg’ – the ugly trench warfare where soldiers were close enough to yell at each other and the Germans to lob gas bombs at them. That is what our government has turned into. They cannot even agree on small points, continue to not talk to one another…especially the extremists to members of their own party, and definitely won’t listen to them. Boehner…and Obama…are stuck with a futile task, while Reid has had some minor success with the filibuster while the GOP is still obsessed with what did Rice know and when did she know it. The Romans and Venetians performed better in their dying days…are we using them for role models? Hopefully not.
For those of you who dislike or disagree with Paul Krugman (as TB once did), please take the time to read this piece on something Congress should not be fighting, especially as the S&P trial evolves: Krugman/consumer protection
TB used the Gramlich quote – a giant of a man who TB was fortunate enough to meet at a conference in London, a nice and humble man and former UMich econ professor who spent his dying months while battling cancer trying to sound the alarm on subprime lending to a deaf (and dumb?), Alan Greenspan.
The bank lobby succeeded in watering down Dodd-Frank, through our Congress who despite the biggest financial crisis the world has ever seen (in magnitude at least), and which it is still roiling from, listened to them but did allow the creation of the Consumer Financial Protection Bureau, which was to do what the SEC, under the impotent Chris Cox, and successors, by protecting individuals from financial fraud (ah, but the prosecuted and convicted Martha Stewart didn’t they?).
All looked good until Elizabeth Warren was named by Obama to head it…then all hell broke out as Jamie Dimon (JPMorganChase), set out to defame and destroy her – and did! Now however, he has to deal with her on the Senate Finance Committee where he may rue his decision. To her credit, she tried to ‘make nice’ but that fell on deaf ears.
So Obama replaced her with a layup, Ohio Attorney General, Richard Cordray. Who could object to this? Ah, the GOP in the Senate, who didn’t reject him but through the mere threat of filibuster, killed him without an up or down vote. Can their actions be any more transparent?
Obama then made an interim appointment which through the stupidity of another group, one of the district courts of Federal Court of Appeals, ruled that it was unconstitutional, which opens the door to thousands of convictions being reversed by judges appointed in the manner by both GOP and Dem presidents…now it will go to the Supreme Court but that could take a year or more, given the current leaning of SCOTUS.
While the handwringers say Obama is taking us down the path to socialism…or worse, far greater damage is being wrought by the GOP and the question is: why are they so indebted to the financial lobby? Indeed, 43 GOP senators have signed a petition (and we know from Grover Norquist how they honor those commitments), saying they will not approve any nominee for the position unless the agency is totally redesigned.
But what do they want? They don’t want it run by a lone chairman (which is precisely why it was set up as a bureau not an agency!), but a bi-partisan commission with the senate in control of appropriations. Hello??? Look at the number of commissions out there who cannot get funding…like the SEC, which is far short of the money it needs for enforcement. Ah, but this stellar group will care for the investor. If the past, is any predictor, it will be prologue to more fraud, and abuse by Wall Street.
…and you wonder why moderate TB can no longer side with the GOP…pity. Pity us.
. . . – – – . . . (SOS!) . . . – – – . . . (SOS!) . . . – – – . . . (SOS!)