4/9/13…a fine mess you got us into, Stanely

From the Friars Club Encyclopedia of Jokes: “A smart husband is one who thinks twice before saying nothing.”

Bloomberg Quote of the Day: “From fanaticism to barbarism is only one step.” – Denis Diderot and…”I was never less alone than when by myself.” Edward Gibson

This week’s economic calendar is packed with important indicators. The highlight of the week will be the March Retail Sales and March PPI (Friday). We will get February Wholesale Trade and February JOLTs Job Openings (Tuesday), March Treasury Budget (Wednesday), March Import & Export Prices (Thursday), and April Consumer Sentiment Preliminary and February Business Inventories (Friday). In addition, the Federal Reserve will release the minutes to the March 19th – 20th FOMC Meeting on Wednesday. Courtesy of Economics Advisory Service. (Repeated)

Bloomberg Top Stories:

*JPMorgan Lenders Culling Staff a U.S. Bank Boom Triggers Jobs Bust – how’s that!!!

*Stocks Rise With Commodities as Yen Rallies From Lowest Level Since 2009 – !

*ICAP Brokers Said to Be Probed by CFTC Over Possible Fixing of Rate Swaps

*Bernanke Says Fed to Press U.S. Banks to Improve Liquidity-Risk Management

*U.K. Manufacturing Rises Twice as Fast as Forecast After Snow in January – one off!

*China Inflation Slowing More Than Forecast Eases Need for Tighter Credit

*J.C. Penney’s Options After Ouster Seen to Include Sale –

*Five Stars Fade in U.S. Hotel Future as Profits Beat Luxury

*San Francisco Appeal May Bering Supreme Court Ruling on Judges in Bankruptcies

*Australia 10% Unemployment for 9.6% of Nation Punctures Gillard Prosperity

*Putin Squeezing Out UBS to Deutsche Bank Using Indebted Oligarchs as Lever

*Margaret Thatcher Funeral With Military Honors Set for St. Paul’s April 17

*Iran Derides Attempt to Slow Nuclear Program While Opening Latest Facility

*Obama Joined by Newtown Families to Push Senate Toward Gun-Law Compromise

*Thatcher Praised by London’s Financiers for Transforming City’s Fortunes

*Bush Debt Load Endorsed by Republicans Now Rejected as Too Onerous – oh yes, fix their stupid spending spree but don’t take back any of the perks to the wealthy – jerks!  

An up day with Dow Transports and the Russell 2000 leading the way. As is the norm of late, volume plunged bit at least A/D’s and Breadth were solid if not great. Total NYSE volume plunged to 2.87B shares vs 3.5B vs 3.32B vs 4.04B. The VIX decline and is back below the 40/50 day but still way below the 200 day m/a – still swinging at the fence.

*Dow Transports took honors ring 0.9% vs +0.3% vs -0.5% vs +0.1% vs -1.3% vs -1.2% vs -1.5%. Russell 2000 was also up 0.9%, while Dow Utilities came in third, up +0.9% vs +0.5%. The S&P 500 rose by 0.6% vs -0.4% vs +0.4%. Nasdaq Composite and 100 +0.6% and 0.5% respectively, while the Dow rose just 0.3% vs -0.3% vs +0.4% vs -0.8%. The market remains under the control of the  high frequency geeks!.

*NYSE Volume slumped to 2.87B shares vs 3.5B vs 3.32B vs 4.04B (highest since 3/15’s options expiry!) vs 3.29B vs 2.74B vs 3.27B vs 2.9B shares. REAL Volume also plunge to 583M vs 726M vs 647M vs 812M vs 639M vs 573M vs 876M (high since since 3/15) vs 596M shares vs 558M shares –the range since 2/11 is 558M to 1.825B on 3/15’s options expiry and a near 12 month high, second only to 12/21’s 1.88B shares. Note that 3/15’s (options expiry) was the only day since 2/28 to register over 1B shares! Ave vol. 12 mos. 738M, ytd 717M. There have been just 11 800+M shares in 2013 – mostly on DOWN days!

  1. new 52 week highs which have ranged from 121-709, were higher at 269 vs 146 vs 143 vs 193 vs 417 vs 388 vs 613 vs 348 vs 422 vs 512. New lows nearly  halved to 55 vs 96 vs 81 vs 114 vs 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 positive: +1.2x vs -1.1x vs +1.6% vs -3.7x vs -1.1x on NYSE and +1.5x vs -1.5x vs +1.8x vs -3.3x vs -1.3x on Nasdaq. Breadth was better: +3.7x! vs +1.0x vs +2.4x vs  -5.7x!!! vs -1.2x on NYSE and +2x vs -1.5x vs +2.1x vs -4.3x!!! vs +1.1x vs -3x on Nasdaq.
  3. The Dow rose by 0.3% vs -0.3% vs +0.4% vs -0.8% vs +0.6%. Dow Transports rose 0.9% vs +0.5% vs +0.9% vs -1.3% vs -1.2% vs -1.5% while Dow Utilities climbed 0.7% vs +0.5% vs +0.9% vs -0.3% vs +0.3%.The two Nasdaq indices rose by 0.6% and 0.5% respectively vs -0.7% vs +0.2% and -0.8% vs flat respectively vs +1.1% and +0.9%. The Russell 2000 shared top honors +0.9% vs -0.3% vs +0.8% vs -1.7% vs -0.5% vs -1.3%. NYSE Financials rose by 0.7% vs -0.3% vs +1% vs -1.6% vs +0.7%. Brokers +1.1% vs -0.2% vs +0.8% vs -2.1% while the two bank indices rose by 1.1% and 0.7% respectively vs +0.8% and -0.2% vs +0.9% and +0.6% vs -0.2% and -1.2%. BofA again most active rising 2% to $12.21 vs +0.3% vs +1.1% vs -2.8%, first time above $12 since 3/6- the range is $11.11, on 12/17 to $12.78 on 3/20. Note: 12 cents is a 1% change!!! No others.
  4. Lastly, volatility (S&P VIX), fell, more than offsetting Friday’s rise to 13.19 -.73 vs 13.92 vs 13.89 vs 14.21 (high of 14.66 from a multi-year low!!!), it is oscillating wildly in a narrow range of 12.30-14.66, average 13.23, and is back below the 40/50 day m/a’s (13.53/13.49) and the 200 day at 15.72…ytd the average has been 13.53 with a range of 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.64!!!

Global equity markets higher, ex-India – Japan flat after being up for four straight session: UK +0.5% vs +0.3% vs -1.8% vs -0.8% vs -0.4%; France +0.3% vs +0.3% vs -2%!!! vs -0.3% vs -0.2%; Germany +0.1% vs flat vs -2%!!! vs -0.3% vs-0.2%; Japan FLAT vs +2.8%!!! vs +1.6% vs +2.2% vs +3%!!!; Hang Seng +0.7% vs -0.1% vs -2.7%!!! vs -0.1% vs -0.1%; Korea +0.1% vs -0.4% vs -1.6%!!! vs -1.2% vs -0.2%; India DOWN 1.2%!!! vs -0.1% vs -0.3% vs -1.6% vs -1.2%. U.S. stock futures slightly higher in a very narrow range: DOW +6; SPX +2.30; NDQ +7.

Bonds were weaker Monday and slightly lower overnight: 10 yr Treasury 1.74% +1/32 (recent range WAS 2.06% to 1.85%), and the 30 yr’s 3.26% to 3.05%, 2.92% -1/8. The long TIP tanked and way off that new (record?) low of 0.36% at 0.45% -1/4, the high yield was 0.67%! Libor update: 0.240% 3 mos., 0.442% 6 mos. – unchanged. Foreign bond yields higher, except Greece? Germany 1.27% +3; UK 1.74% +5; France 1.79 +4, Italy 4.35 +2; Spain 4.71% -1; Portugal 6.33% +5; Greece 11.43% -6 vs 11.53% vs 11.94% vs 11.20% vs 11.94% vs 12.09% (recent range 10.58-12.57%!) Hoopa!  

Gold remains below $1600 and closed slightly lower at  $1572.50 -$5.40, still off the new low of $1539.40, from 4/4, lowest since 6/29/11!!! It is still way below resistance and the 1/17 high of $1699.90. The recent intraday high was $1618.30 (3/21), almost to the 40 day on 3/21!  We are at least above the 2/21/13 low of $1554.30 – not seen since May 2012! Last time it was below $1500 was Sept. 2011, now critical. The breakdown puts first resistance at the 40/50 day m/a’s $1597-1612 – still falling steadily. Overnight it is $1575.60 +$3.10 Crude closed modestly higher at $93.36 +.66. Friday’s intraday low was $91.91 – lowest since 3/21 – it remains below BOTH the 50 day ($94.47) and 40 day ($93.88), six days 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. Overnight it is $93.54 +.18

 

Some random thoughts:

…poor old Oliver Hardy in a pickle…ah, if only our problems were as small as theirs and fixable!

I am seriously worried about our government at all levels. In particular, the tax breaks that have been given over the prior eight Bush years and scant increases (except for reinstating the payroll tax this year – which is what affects spending, not the marginal rate for the wealthiest Americans!).

We need to get rid of those stupid tax incentives like the carried interest provision which allows hedge fund operators to pay 15% on what is really ordinary income! Also, subsidies such as corn and especially sugar which has us paying double the cost to the rest of the world and has hurt sugar producing countries like Mexico who could really use the revenue…instead we pay back those in the sugar beet industry for their lavish campaign contributions to both parties!

We need to limit the deduction for interest expense to $100,000…$1 million is absurd especially with mortgage rates at 3.5% which allows the wealthy to pay twice as much for a home and still deduct $1 million…fair and equal? Not only that but insane!

At the state level, spending remains out of control and on dumb projects…like Minnesota helping the rich owners of the Vikings build a new stadium with said contribution to come from internet games which are producing about 1/10th of what was projected – said projections happily supplied by purveyors of internet games! And so much more.

Education costs are out of control with the jump in consumer credit last month attributed to…student loans which burden graduates for jobs that pay a pittance compared to their debt. This is not the way for Americans to get ahead…and it definitely leaves the next generation…and the next worse off. Is this what you want? It had better be because you are letting it happen by voting for incumbents in ‘rigged’ elections thanks to redistricting.

Then at the local level especially but also state pension funds…unfunded liabilities are sapping the life out of budgets…which, since they are going unabated (even with some bankruptcy filings), due to political pressure from local constituencies and absurd actuarial assumptions on investment returns provided only to reduce contributions. They are all grossly underfunded and that is guaranteed…by those assumptions…to grow!

Then there are the Euro problems and of course Iran and now North Korea. As one expert said, we are using the wrong policy…if you have a nuclear program we threaten you, but if you don’t (like Libya and Iraq), we flex our muscles and take the leaders out, on trumped up reasons to invade…note also Afghanistan, while Pakistan who has nuclear capability is safe and considered an ‘ally.’

But North Korea is the scariest at the moment as we don’t know what the illustrious leader wants…new Lego’s? We don’t even know if he is in charge or a pawn of the military…which, by the way, is missing six generals…despite their mourning for Kim Il. That is one scary proposition to world peace (sic).

Then there is the lack of interest in doing something meaningful about gun control…including steering law enforcement away from just the corner drug dealers to weapons violations…this can only be accomplished by changing the gun laws to major felonies…something the NRA won’t allow to happen…nor their gun manufacturing friends. They own the GOP (along with Wall Street) and even some Dem’s – but a fraction of the one that are paid off in the GOP. Dump them!

 

Have a great day and don’t take any (more) wooden nickels!

TB

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