4/3/13…we need more Olympia Snowe’s!

From the Friars Club Encyclopedia of Jokes: “Man is the only animal that blushes. Or needs to.” – Mark Twain

Bloomberg Quote of the Day: “Until you value yourself, you won’t value your time.” – M. Scott Peck

Bloomberg Top Stories:

*British Banks Move to Escape European Bonus Caps by Redefining Risk Takers – ???

*S&P 500 Index Pares Gains as Spanish bonds Advance, Copper Declines

*Bank of America’s Moynihan Said to Summon Managers in Push to Add Revenue – Ha!

*Aussie to Loonie Equaling Dollar in Attracting Global Currency Reserves – !!!

*IMF Will Contribute $1.3 Billion to Cyprus Rescue as Plan Gains Approval – egads!

*European Money Funds Defend Against Zero Yields by Breaking buck Taboo

*U.S. Companies Added 158,000 Workers to March Payrolls, ADP Research Says

*GM Shares Recalled to Life With Cadillac ATS Drviing 49% Surge in Sales

*Barclays Post-Libor Report Concludes Bank Had Become Too Complex to Manage –yep so why not break it up…along with JPMorgan and Citi???

*Ex-Goldman Trader Is Said to Surrender Today on Alleged Concealed Position – !!!

*Canada Seen Beating U.S. in Race for $150 Billion Asia LNG Market

*Suntech Unit’s Tumble Into Bankruptcy Had Its Roots in Deadbeat Customers

*North Korea Stops South’s Workers From Entering Gaesong as Tensions Rise – !!!

*Obama Pushes Republicans to Stop Blocking Judicial Picks as Vacancies Rise – !!!!!

*Republicans Steer Clear of Hispanic Labor nominee’s Record on Immigration

*Berlin Roads Sealed Off as World War II Bomb Found Close to Chancellery   

…suppose they held a rally and nobody came? Actually, it was two indices shy of a REAL rally with Dow Transports AND the Russell 2000 declining? Dow theorists might have a problem with a rally like that but CNBC? Never! While total NYSE Volume rose, real NYSE volume remained well below average, i.e. an absence of retail! This was best exemplified by the 110 point rally in the DOW which then fizzled around midsession to a 48 point gain before rallying again in the final half hour – sound familiar? – to close up 89 points. But it is the ‘quality’ of the final half hour that is the problem: at that time shares traded on the floor (aka REAL) stood at just 457M, by the close just 538M, add in orders ‘at’ the close and you get just 639M shares. On this the Dow rallied 89 points or 0.6%??? Here are some takeaways that are highly reminiscent of a market ‘top’:

*Dow Transports were the worst performer for a second day, declining by 1.2%,just a day after a -1.5% decline and eradicating Thursday’s 1% gain. On a day the Dow rose?

*NYSE Volume ROSE to 3.29B shares, about average, vs 2.74B vs 3.27B vs 2.9B shares. REAL Volume rose to just 639M shares after plunging to 573M shares vs 876M (high since since 3/15 – options expiry!) vs 596M shares vs 558M shares -lowest since 2/11 – vs 655M vs 620M, vs 673M vs 731M vs 676M vs 1.825B (12-month high!!!). Despite the surge, the average last week was just 674M! The range since 2/11 is 497 to 1.83B with an average of 736M shares. 3/21’s 1.83B shares (options expiry) was second only to 12/21’s 12 mo. high of 1.88B shares. Note that 8/15’s (options expiry) 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. 737M, ytd 716M. There have been just ten 800+M shares in 2013 – mostly on DOWN days!

  1. new 52 week highs which have ranged from 121-709, rose slightly to 417 vs 388 vs 613 vs 348 vs 422 vs 512 vs 356 vs 531 vs 328 vs 282 vs 584 vs 652 vs 410 vs 413 vs 560 vs 630. New lows nearly were only a tad lower at 64 vs 69 vs 36 vs 60 vs 44 vs 56 vs 33 vs 36 vs 43 vs 50; recent high 98.
  2. Advance/Declines were NEGATIVE at -1.1x? vs -2.2x vs +1.7x vs +1.1x vs +2.2x on NYSE and -1.3x? vs -2.7x vs +1.3x vs -1.1x vs +1.4x on Nasdaq. Breadth was mixed (?) at -1.2x? vs -3.4x! vs +1.7x vs -1.1x vs +2.5x on NYSE and PLUS 1.1x vs -3x vs +1.6x vs +1.5x vs +1.7x on Nasdaq.
  3. The Dow rose 0.6% vs +0.4% vs -0.2% vs +0.8% vs -0.4%. Dow Transports were the big loser again at -12% vs -1.5% vs +1%, while Dow Utilities rose again by 0.3% vs +0.2% vs +1.2%.The two Nasdaq indices rose by 0.5% vs +0.9% and 0.8% respectively. The Russell 2000 FELL for a second day by 0.5% vs -1.3% vs -0.1% vs flat vs +0.6%…has this dog hunted already?
  4. NYSE Financials rose by 0.7% vs -0.8% vs +0.4% vs -0.4% vs +0.5% vs -0.6%. The two bank indices were flat and -0.6% respectively vs -0.8%/-1.1%. BofA the most active but FLAT vs -0.3% and still in danger of breaking $12 vs -0.4% vs -0.4% vs -1% – the range is $11.11, on 12/17 to $12.78 on 3/20. It closed at $12.15, lowest since 3/14 Note: 12 cents is a 1% change!!!
  5. Lastly volatility (S&P VIX), declined to 12.78 -.80 after ‘gapping down on the open on 3/27. Since ‘gapping up’ on 3/18 (from a multi-year low!!!), and surging to 15.40 in two days, it has gone sideways but oscillating wildly in a narrow range of 12.30-14.61, average 13.23, but is now back BELOW the 40/50 day m/a’s (13.54/13.46) but note that the 200 day is way up at 15.86 which illustrates how complacent the markets remain…ytd the average has been 13.53 with a range of 19.28(2/25!) to 11.05 (3/14) – but the 12 mo. average is still 16.64!!!

 

Global equity markets weaker ex-Japan: UK -0.4% vs +1.2% vs C vs C vs +0.4 vs +0.6% vs -0.6%; France -0.2% vs +0.9% vs C vs C vs +0.4% vs -1.5% vs +0.4%; Germany -0.2% vs +1.1% vs C vs C vs +0.5% vs -1.3%!; Japan UP 3%!!! vs -1.1% vs -2.1% vs +0.5% vs -1.3%!; Hang Seng -01% vs +0.3% vs -0.7% vs C vs -0.7% vs +0.7%; Kospi -0.2% vs -0.5% vs -0.4% vs +0.6% vs flat vs +0.5%; India -1.2%! vs +0.9% vs +0.2% vs C vs 0.7% vs C vs +0.1%. U.S. stock futures little changed and in a VERY narrow trading range: DOW +5; SPX +1.30; NDQ +2 – so much for the rally!!!

Bonds were slightly weaker yesterday and little changed overnight: 10 yr Treasury 1.86% +1/64 (recent range was 2.06% to 1.85%), and the 30 yr’s 3.26% to 3.05%, closed 3.11%, now 3.10% +1/16. The long TIP, which also rallied – to 0.56%, new rally low, is now 0.58% flat; the high yield was 0.67%. Libor update: 0.242% 3 mos., 0.442% 6 mos. – slipping again. Foreign bond yields mostly lower, Greece sharply lower AGAIN: Germany 1.30% –1; UK 1.79% +2; Italy 4.57 -3; Spain 4.88% -4; Portugal 6.22% -9!; Greece 11.72% -15!!! vs 11.94% vs 12.09% vs 12.30% vs 12.57%!!! vs 11.66% vs 11.37% vs 11.48% vs 11.21% vs 11.06% vs 10.58%…exciting!!! Hoopa!  

Gold gave up the ghost of the key $1600, closing at a WEAK $1575.90 -$25!!! The session high was just $1604.30 while the intraday low of $1574 was lowest since 3/6!!! It is now way below resistance and the 1/17 high of $1699.90. The recent intraday high was $1618.30, almost to the 40 day on 3/21 but that move fizzled!  2/21/13’s low was $1554.30 – not seen since May 2012! Last time it was below $1500 was Sept. 2011. $1600 remains critical! The breakdown through the 40/50/200 day m/a’s puts major resistance $1609-1622 – falling steadily, res/sup at $1600, a double bottom from 8/14-15, also a psychological level. Overnight it is $1571.40 -$44.50. Crude closed modestly higher at $97.19 +.12, on another uneventful day following the rally intraday high of $97.35, highest since 2/15! The range is $91.60-$97.35 since 3/12! The recent low is $89.33, lowest since 12/26, set on March 4. It remains well above the 50 day ($94.65), and 40 day ($94.16)! Overnight, $96.59 -.40.

 

Some random thoughts:

Thank God for some measure of sanity as former Senator Olympia Snowe travels the country begging for political reform of both parties. TB agrees wholeheartedly!

We have lost some of our most capable leaders due to GOP party politics. To not be a total ‘traitor’ to her party Snowe couches her criticism in terms of both parties, but under questioning on PBS last night she had to admit that the Tea Party and Occupy Wall Street are not equal: after all the Tea Party was funded by the libertarian Koch brothers (the kind that give libertarians a bad name) and have seized control of the GOP (although their influence is fading as there is even talk of reforming the party), while OWS never had any power in the Democratic Party so how does she compare them? Hmmm.

But the point is, as TB has begged: WE, the people, have to do something…do it when you vote and stop supporting either party (of course this too plays into the hands of the wealthy who control the parties). But the primary system makes this almost futile. Still, at least in small measure the GOP is finally getting the message and no amount of ‘words’ will change opinions or convince people they represent THEM. They also profess to support small business but it is only big business that gets the nod – from both parties!

How many former members of Congress does it take before we wake up?  If you don’t help take control of your party back, who will??? Extremists of both parties must be neutralized…if not, gridlock will prevail as the country – and the majority of hard-working Americans pay the price.

Back to pensions: according to the Star-Tribune this morning the state of Minnesota may have to kick in $35 million annually in order to bailout just THREE local pension funds!

This is an outrage…especially since there is not even an attempt to FIX the problem! Too many benefits and that can be blamed on neglect by elected officials as they attempt to appease their constituents to remain in office along with the held-harmless pension consultants who let them go on assuming that their portfolios will return 8% a year in perpetuity! That is how they covered the problem up since the stock market collapse in 2000 – thirteen long years of ignoring a major problem. Furthermore, even IF they were fully funded now, they would be losing money each day/month/year that the returns fail to achieve that lofty goal…by the way Warren Buffett’s Berkshire Hathaway assumes just 4% on their pension funds and has no problem That is called responsible statistics.

California, as pointed out on Monday, has an enormous problem, that is an analogy to the Vampire Squid problem…it is sucking everything out of the state leaving taxpayers and bondholders holding the bag – in Stockton’s recent bankruptcy filing, no pension reforms were introduced – despite that being the reason they filed for bankruptcy so if there are any losses the bondholders will bear them. Worse, the problem will just continue to grow as with the first of the bankruptcies which was filed by Vallejo in 2008! Get real!

As for guns…former Republican Senator Asa Hutchinson is marching to the orders of the NRA. He was paid by the NRA to head a commission that produced the report that surprise, surprise, says that ‘a good guy with a gun is required in each school to stop a bad guy with a gun.’ What are we?…some third world country and if more guns are the answer how come we have more than any other country yet we have the highest crime rate.

The NRA continues to blame the Justice Department for not enforcing existing laws on guns. Most likely, these were written by the NRA and delivered to paid off GOP stiffs. The laws are mostly misdemeanors and thus not worth the time to prosecute when there are any number of felonies to prosecute. This is confirmed by local district attorneys!

As for assault weapons that is another straw man. While mass shootings catch our eye, it is because they occur in mostly white communities, not the inner city where the majority of crimes are committed – with handguns! As for deaths, most white men who die from gunshot are by suicide, while most black men are homocides. Yet there are no provisions for change in Feinstein’s bill to handguns. What does this tell you? We are sick!

That’s enough for today…agree, disagree, whatever…but at least think about it. It’s your, and your children’s and grandchildren’s future that is at stake.

Have a great day!

TB

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