From the Friars Club Encyclopedia of Jokes: “We are in the process of buying a new home. When you buy a home, you deal with realtors. Realtors are people who did not make it as used-car salesmen.” – Bob Newhart
This week’s economic calendar is packed with indicators. The highlight of the week will be the February Personal Income (Friday). We also get February Durable Goods Order, January Case-Shiller Home Prices, March Richmond Fed Survey, March Consumer Confidence, and February New Home Sales (Tuesday), GDP – Q4 Final and March ISM Chicago Survey (Thursday), and the March Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*Cyprus Salvaged After Deal With EU Shuts Bank to Get $13 Billion Bailou –good deal?
*Stocks Rise as Italian Bonds Erase Post-Election Drop on Cyprus Compromise – Hah!
*Dell Says Offers From Blackstone, Icahn May Be Superior to Founder’s Bid – hey, just like Time Warner’s HOT offer to AOL – at it’s highest price ever…disaster ever since!
*U.S. Hedge Funds Swoop to Hire Traders From Struggling European Startups
*Risk goes unrewarded as Emerging Equities Trial in Worst Start Since 2008–not bonds!
*Liechtenstein Asked to Hand Over Data on Banks Helping American Tax Cheats –good!
*Boehner Declaring No Debt Crisis Revealed in U.S. Household Lending Surge – then what the hell has he been fighting about? Morons…morons all!
*Ruling Gay Marriage as a Supreme Law Recalls Dred Scott Before Selma March
*Late U.S. Snowstorms Bring Air Travel Delays From the Midwest to Northeast
*Paris Demonstration Against Gay Marriage Turns Into Anti-Hollande Demonstration
*Egypt Falls Out With Obama as Slowest Growth Since ‘90s Spurs Need for Aid – tough!
…and another rally…this time led by Transports with a 1% gain following a 0.4% loss, all indices were up, but…
*Volume fell yet again, as always on a rally day, both total and real! Don’t you get it???
*Dow +0.6%, S&P 500 and Nasdaq Comp +0.7%, 100 +0.9%, Russell 2000 just +0.3%
*Dow Utilities up 0.2% vs +0.8%…hmmm NYSE Financials +0.6% for a 2nd day
*Advance/declines and breadth were solidly positive again, New Highs however plunged to 356 vs 513, New Lows dipped to 33 vs 36
*Volatility (VIX) fell by 3% following a 12% surge, now below 40/50 day m/a’s
NYSE Volume fell again, now below 300M leaving just one solid session on last Friday’s options expiry (as usual since the only two days where we have high volume are options expiry and sometimes monthend). It was 2.92B shares (lowest since 2/11’s 267M) vs 3.32B vs 3.74B vs 3.15B vs 4.93B (2013 high), average of last 16 sessions is 3.5B shares – weak! Real NYSE volume also pluinged to 620M shares, lowest since 2/11 from 673M vs 731M vs 676M vs 1.825B (new 12-month high!!!). The range since 2/11 is 497 to 1.83B with an average of 743M shares. Last Friday’s 1.83B shares was second only to 12/21’s 12 mo. high of 1.88B shares. Note that Friday was the only day since 2/28 to register over 1B shares with no other sessions reaching anywhere near 800M shares!!! Ave vol. 12 mos. 741M, ytd 723M. There have been just NINE 800+M shares in 2013.
- new 52 week highs which have ranged from 121-709, plunged to 356 (on a big rally???) vs 531 vs 328 vs 282 vs 584 vs 652 vs 410 vs 413 vs 560 vs 630. New lows fell to 33 vs 36 vs 43 vs 50 vs 42 with recent high at 98.
- Advance/Declines were positive for a second day in five at +1.7x vs +2.9x! vs-1.3x vs -1.5x vs -1.1x on NYSE and +1.5x vs +2.4x vs -1.4x vs -1.9x vs -1.3x on Nasdaq. Breadth was similar at +1.8x vs +3.2x! vs -1.6x vs -2.6x! vs -1.1x on NYSE and +1.3x vs +3.5x! vs -1.8x vs -2.3x! vs -2x on Nasdaq.
- The Dow rose 0.6% vs +0.4$ vs flat. All indices were positive including Dow Utilities +0.2% vs +0.8%? Russell 2000 was was the ‘goat’ at +0.3% vs +1%?
- NYSE Financials rose by 0.6% for a second session after being the big loser for two days vs -0.7% vs -1.1%, hard hit brokers were flat vs +1.6%! vs -0.7% vs -1.1% vs -0.2% vs flat. BofA still most active – natch: -0.1% vs +0.6% vs +1% vs -0.1% vs +3.8% – the range is $11.11, on 12/17 to $12.78 Thursday! Note: 11 cents is a 1% change!!! GE +0.3% vs +0.6%.
- Lastly volatility (S&P VIX), which gapped up on the open Monday(from a multi-year low!!!) rose by 10% on an inside session following Thursday huge range that has it oscillating around the 40/50 day m/a’s, and has been very ‘volatile: 13.57 vs 13.99 vs 12.67 vs 14.39 vs 13.36 vs 11.30 (12 mo low), with a high of 15.40 Thursday of 15.40, highest since 3/4. It closed at 13.57 -.42. When something like this can occur because of a mouse like Cyprus one has to wonder. But recall the financial collapse began with Iceland, spread to Ireland, then to the Euro countries and the U.S. and ultimately to Greece…now Cyprus??? Is this really a good time to be bullish on stocks??? – even if the ECB and Cyprus agreed (sic) to a deal?
Global equity markets STRONG, ex-India, on the Cyprus deal which is not a deal I would think of as ‘sweet’: UK +0.8% vs -0.8% vs +0.3% vs flat vs -0.7%; France +0.2% vs -1.2% vs +1.2% vs -0.6% vs -1.3%; Germany +1.2% vs -0.8% vs +0.8% vs -0.3% vs -1.1%; Japan +1.7% vs +1.3% vs closed vs +2%!!! vs -2.7%!!!; Hang Seng +0.6% vs -0.1% vs +1% vs -0.2% vs -2% vs -0.4%; Kospi +1.5% vs -0.4% vs -1% vs +0.5% vs -0.9%; India DOWN 0.3% vs -0.5% vs -0.7% vs -1.5%!!! vs -0.7%. U.S. stock futures slightly higher, trading in a narrow range: DOW +23; SPX +4.10; NDQ +12
Bonds weaker on the Cyprus ‘deal’ after gaining slightly on Friday. Overnight they are modestly weaker: 10 yr Treasury 1.95% -1/8 vs 1.94% but below the 2.06% to 1.85% prior 19 sessions, and the 30 yr’s 3.26% to 3.05%, closed 3.15%, now 3.18% -9/16. The long Tip made it to 0.60% last Tuesday but is now back to 0.64% but -7/16, the high yield was 0.66%. Libor update: 0.243% 3 mos., 0.446% 6 mos. Foreign bond yields mostly higher ex-Greece.: Germany 1.38% +1; UK 1.87% +2; Italy 4.50% -1; Spain 4.85% +2; Portugal 5.91% +5; Greece 11.13% -39!!! vs 11.37% vs 11.48% vs 11.21% vs 11.06% vs 10.58%. Anyone want to be a foreign bond trader? Not me!
Gold rose and has been up five of the last six days and remains above $1600 for a fourth day. It is still below resistance and way below the 1/17 high of $1699.90. It closed at $1613.80 +$6.30, with an intraday high of $1616.50, almost to the 40 day! 2/21/13’s low was $1554.30 – not seen since May 2012! Last time it was below $1500 was Sept. 2011. Overnight it is OFF $14 to $1594!!! $1600 is again resistance! The total breakdown through the 40/50/200 day m/a’s puts major resistance $1619-1669, with major support at $1600, a double bottom from 8/14-15, also a psychological level. Crude was off 51 cents Friday to $92.45, on an ‘outside’ day. It has been in a range of $91.60-$94.09 since 3/12! The recent low is $89.33, lowest since 12/26, set on March 4. Overnight it is $94.42 +.71 – just above the just converged and crossed 40 day ($94.32), and 50 day ($94.35)!
Some not so random thoughts (my opinions…you make your own):
…there were three topics on all the talk shows Friday: gun control, gay marriage, and Syria/Israel…that was it. No more budget…nothing…just those three. Here are TB’s thoughts
Gun Control: why do we let a hired gun like Wayne LaPierre shoot off his idiotic mouth to the world. He has an agenda, and it is so obvious he was being mocked by moderators. He doesn’t care about who dies or what is the right thing so long as his money supporters, i.e. gun manufacturers. are happy.
First, the flip-flopping by LaPierre on gun registrations and this: in the Shady Hook shootings, the weapons were purchased by a sane, responsible individual and used by her son…so let’s not register them. On the other hand he opposes registering weapons transferred between relatives. But isn’t the purpose to be able to trace a weapon back to find out how it got in a perp’s hands? Not according to him, who has the paranoid belief that the government is going to come and take away your guns. Wayne, just how would they accomplish that? You would see a huge increase in the number of weapons reported stolen. Isn’t this paranoia and very Orwellian?
He also wants guns and security people in all schools. Does he have any idea how much that would cost and does he really believe a deranged person would care? How would he propose paying for the officers? Especially with a GOP bent on fitting the federal government into a bathtub as their mentor Grover Norquist preaches.
On the other side, the focus on assault weapons has become a diversion from the real problem: while mass shootings are a tragedy, they are rare and in case you hadn’t noticed most of the victims are middle-class white people. Is it the shock and awe or the fact that they are ‘our people’ that gets people so upset? TB would think both as mostly white people race out to buy guns, which will have a higher probability of injuring or killing a relative than protecting from a home invader. Particularly troublesome is purchases of automatics rather than revolvers since most people have no idea there is a round in the chamber…try dry-firing that!
TB would limit the number of rounds in a magazine to 10. Why? Because there are already enough oversized clips out there to be a hazard. Make possession of an oversized clip a felony, unless it is in your home, and sale of one a felony. How come it is illegal to have any clip in Washington D.C.? Because Congress makes the laws there and they don’t want to be killed…got it?
LaPierre makes one very good point: why isn’t the federal government using existing laws to prosecute those who attempt to buy a gun and are found to be convicted felons? The government (Holder) says it would be too expensive…is this because they would rather focus on high-profile financial fraud cases so they can boast of the record fines?
Those record fines in few instances paid by the stockholders, not the guilty parties, who have yet to have a single criminal charge filed against them (what is happening to Jon Corzine…dead silence in something he was clearly responsible…is it because he is a member of two clubs: Senator and Governor???), not even Angelo Mozillo, who paid a fine that was miniscule compared to what he made on his fraud. In no case, has the fine exceeded the amount earned on the fraud…zero, zip, zilch! Some model, ah but I digress.
Sen. Feinstein, who knows all too well the dangers of weapons in the wrong hands (first the shootings of Mayor Moscone and Supervisor Harvey Milk which pushed her to San Francisco Mayor, then the 101 California shootings), is leading the charge on a second assault weapon ban. The first ‘sunsetted’ and had minimal impact as the gun manufacturers can and will ‘comply’ with the new laws in short order. At least this time high volume magazines are included…which shows how they get around new laws.
But Sen. Feinstein should have paid more attention to what was happening in her city and across the bay in Oakland, where hand guns – automatics – were killing record numbers of people…or New York, or Chicago, or any place with a large inner city! That is the problem: we are addressing this only in respect to our own fears…the fears of middle-class Americans, and not caring about the lower income people dying each day…but when some of ‘our people’ get killed we overreact on the shock value of the crime.
As a former law enforcement officer I can honestly say that you have more chance of shooting someone accidentally with a handgun than killing your intended target. In addition, there are those who don’t consider their ‘backstop’ (the number one thing a police officer is forced to do), or the possibility of a small child getting hold of the gun.
But the most obvious problem is ‘opportunity.’ How many family disturbances, arguments, road rage incidents would have been prevented if there was not access to a firearm? I would bet upwards of 90%. Sure Wayne, they might use their fists, a club, a knife, etc. but the risks to the assailant are very high. It is also almost ‘ethereal’ to fire a weapon at someone…yes guns to kill people…in the hands of not only the ‘wrong’ people Wayne, but legitimate gun olders who act on emotion and don’t have time to think about the ramifications, like the guy who overreacted (at best) in Florida and took a life.
The other problem, has been expressed poorly by Donald Rumsfeld, and Henry Paulson, the latter who said carry a ‘bazooka in your pocket.’ That is the problem: a gun provides no security unless you show the assailant/antagonist that you have the capability to kill them. This is rule number one of law enforcement: never…never draw your weapon unless you are prepared to use it.
This brings us to the gun lobbies inane arguments which are reminiscent of the ones on seat belts (remember? A car ended upside down in a lake and the driver died because he couldn’t get the seat belt loose). That has been updated to if ‘three armed men’ enter your home how are you going to protect yourself without an automatic with lots of rounds? First, the obvious: just like seat belts what are the odds – unless you yourself are a felon? That doesn’t mean it can’t happen but unless you live in the inner city it is highly unlikely. I bet more people in California keep a gun for protection than hold earthquake insurance.: neither one is a reasonable expectation of occurrence but they spend money on them just the same…just in case. This, despite the fact that you are more likely to die in your car or an accident in your own home than anything else…and those are remote!
Besides backstops and not displaying your weapon, the most important thing I learned was this: there is a much higher chance of hitting an unintended victim when a gun is fired accidentally. That, folks, is fact.
Gay Marriage: we are all going to hell in a handbasket if gay marriage is legal! That is the cry from the right. One side says it is immoral and is harmful to children. They cite studies of children not raised by two loving parents – these studies did not pertain to gay marriages, mind you but any separation of parents. They ignore the high and rising divorce rate in an society that increasingly relies on social media and computers, and entertainment is most certainly not keyed to family values.
Why has the public moved away so rapidly from the anti-gay marriage argument? Because they are finding out that all those claims are false on their own merits. Wouldn’t you rather be raised by two loving parents of the same sex than shuffled between two parents who can’t stand one another (watch any of the court shows on TV and see how much angst comes from these at the expense of the children…especially Judge Judy who served as a family court judge!). So why do they fight so hard against this? Because they don’t care who they hurt on their philosophical grounds of what is a marriage.
As for me, I would like it better if is were not called a ‘marriage’ but we have made a mockery of the institution in this country thanks to people like Donald Trump, the Kardashians and other celebs who bask in the demise of their marriages. Do you really think gay marriage sends a worse message than that?
But the real issue is human rights. We have the right to love anyone we choose to. When two people find one another that is an incredibly wonderful thing. I believe gays take marriage much more seriously…and having a child…than heterosexuals do. Why? Because there is such a stigma to it…and the financial risks: if not handled properly one of them can lose everything…including any rights to ‘their’ child.
Imagine if your spouse was dying in a hospital and you were told you could not see them, but their parents could? What would that do to you? …or to the spouse? Then you have no rights as a spouse if they die…how would you react?
Finally, the argument that it should be left up to each state to decide is bogus…we tried that with slavery! But more important, and this is also true of health insurance, we are a highly mobile society…not like when this nation was founded…not even up to then end of World War II. How can someone live legally as a couple in one state and then be forced to not take a better job…or move because you would rather live someplace else because your marriage would be invalid? This is not a constitutional issue, it is one of human rights. Also, prohibition was approved by a majority of voters…did that make it right? It turned honest people into criminals and we continue to pay for it today thanks to its promotion of organized crime – without that it would never have occurred…and didn’t the majority of Congress…and the President…continue to drink throughout it? YES! So are we to once again promote perceived ‘morals’ at the expense of the will of the individual…who does it hurt? Certainly not the children of loving parents regardless of their sexual persuasion.
As we learn of more and more people with children who are gay…from couples who are anything but…we see understanding developing and that, not propaganda is leading to the increase in support of gay marriage, not ‘propaganda’ as the far right suggests.
Syria/Israel: this one is simple. We must protect Israel but just as importantly we must appear open to reasonable arguments on both sides. We have increasingly, since the Shah of Iran fell, been perceived as anti-Muslim. Not surprisingly when we also back Mubarak in Egypt, and other leaders as we did Batitsta in Cuba and still can’t bury that hatchet.
Providing arms to the rebels is another problem…one that is damned if you do and damned if you don’t. IF we provide weapons, they could be anti-American (and remember that governing all of our actions is who is most favorable to us, not what is right), if we don’t, if and when Assad falls, we will not be favored. You can’t have it both ways: favoring democracy but only so long as it is our kind of democracy, and when there are more Muslims than any other religion in the world, Houston you have a problem! So when you hear people on both sides make arguments remember they are just opinions…as are mine…and they have no impact on the outcome. As one person commented on a talk show yesterday (paraphrasing Rumsfeld): we don’t know what we don’t know. If only we did…then it would be easy.
What is most interesting though is the misuse of statistics by both sides on guns and gay marriage (not stats on Syria, just opinions)…wait, don’t figures lie and liars figure? They most certainly do! It’s all about perception.
Have a great day!