4/16/13…

From the Friars Club Encyclopedia of Jokes: “What is the definition of an actuary? Someone who wanted to be an accountant but didn’t have the personality.”

Bloomberg Quote of the Day: “Everybody likes a kidder, but nobody will lend him money.” – Arthur Miller

Bloomberg Top Stories:

*Goldman Sachs Profit Beats Estimates on Higher Investment-Banking Revenue – yawn!

*Housing Starts in U.S. Surge on Seven-Year High for Multifamily bldgs – get serious!

*Stocks in U.S. Jump With Gold (???) on Housing Data While Treasuries, Yen Weaken!!!

*Factory Output in U.S. Unexpectedly Fell in March as Manufacturing Cooled – hello?

*Morgan Stanley Said to Lift Prohibition on Job Hunting by Junior Bankers – get it???

*IMF Cuts Global Growth Outlook as Europe Urged to Bolster Domestic Demand – !!!

*Target Trims First-Quarter Profit Forecast on colder Weather; Shares Fall – DUH!!!

*Yen Gaining Without Momentum as U.S. Assails Devaluation: Market Reversal – !!!

Stop the insanity. Yesterday was a total fiasco: stocks hammered, gold hammered, crude hammered, bond soundly higher. On what??? Slower growth in China!!! I kid you not! At least that was the stated reason which can be added to EU crisis better…EU crisis worse. They just don’t get it, do they? This is not a time for a stock market rally while the Capitol burns…and retail seems to agree…it’s all up to the high frequency traders!

A second straight DOWN DAY but this time a Duesy! Everything was DOWN, led by Dow Transports which were off nearly 4% (along with the Russell 2000!!! – amazing how these two remain in sync and usually counter to the Dow…hello Dow Theorists, there is a need for you now. Total NYSE Volume SURGED to 4.64B shares vs 3.22B vs 3.38B vs 3.47B vs 3.23B…zzzzzz. A/D’s and Breadth were both extremely NEGATIVE.  The VIX finally came out of its ennui and charged from 12.06 to 17.27, a 43% gain and closed at the high! Last time it was above this was 2/26/13…contrast to the 200 day at 15.48 – oh, and Friday is – you guessed it – another options expiry!

*Dow Transports -1.8%!!! vs -0.3% vs -0.3% vs +1.8% vs -0.3% vs +0.9% vs +0.3% vs -0.5% vs +0.1% vs -1.3% vs -1.2% vs -1.5%. Russell 2000 -3.8% vs -0.4% vs +0.1% vs +1.8% vs -0.2% vs +0.9%, Dow Utilities -1.3% vs +0.2% vs +0.2% vs +0.8% vs -0.2% vs +0.9% vs +0.5%. The S&P 500 fell 0.3% vs +0.4% vs 1.2% vs +0.4% vs +0.6%. Nasdaq Composite and 100 were both down by about 2.3% vs -0.2% vs +0.1% vs +1.8% vs +0.5%, the Dow fell 1.8% (266 points!) vs flat vs +0.4% vs +0.9% vs +0.4% vs +0.3.

*NYSE Volume surged to 4.64B shares (bested only by the 4.93B 12-month high on the last options expiry on 3/15!) vs 3.22B vs 3.38B vs 3.46B vs 3.23B vs 2.82B vs 3.5B vs 3.32B vs 4.04B ( now 3rd highest). REAL Volume also sprinted to 976M shares vs 700M vs 643M vs 688M vs 670M vs 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. 736M, ytd 714M. There have been just 12 800+M shares in 2013 – almost exclusively on DOWN days!

  1. new 52 week highs which have ranged from 121-709, were nearly halved again to 154 vs 285 vs 591 vs 505 vs 312 vs 269 vs 146 vs 143 vs 193 vs 417. New lows nearly tripled to 197 vs 76 vs 41 vs 31 vs 52 vs 55 vs 96 vs 81 vs 114 vs 64.
  2. Advance/Declines were extremely negative: -7.1x vs -1.5x vs +1.6% vs +3.1x vs +1.4x vs +1.2x vs -1.1x vs +1.6% vs -3.7x on NYSE and -8.1x vs -1.5x vs -1.1x vs +3.8% vs -1.2x vs +1.5x vs -1.5x vs +1.8x vs -3.3x on Nasdaq. Breadth was worse: -7.2x vs -2.2x vs +1.7x vs +3.2x vs +1.9x vs +3.7x vs +1.0x vs +2.4x vs  -5.7x!!! on NYSE and -12.8x!!! vs -1.4x vs -1.2x vs +6.5x!!! vs +2.1x vs +2x vs -1.5x vs +2.1x vs -4.3x!!! on Nasdaq.
  3. The Dow was -1.8% vs flat vs +0.4% vs +0.9% vs +0.4% vs +0.3%. Dow Transports FELL 3.8%!!! vs -0.3% vs -0.3% vs +1.8% vs -0.3% vs +0.9% vs +0.5% vs +0.9% vs -1.3% while Dow Utilities were best at -1.3% vs -0.2% vs +0.2% vs +0.8% vs -0.2% vs +0.7% vs +0.5% vs +0.9%.The two Nasdaq indices fell by 2.3%+ vs -0.2% vs -+0.1%. The Russell 2000 also plunged by 3.8%!!! vs -0.4%! vs +0.1% vs +1.8% vs -0.2% vs +0.9% vs -0.3% vs +0.8% vs -1.7%. NYSE Financials fell by 2.5% vs -0.5% vs +0.4% vs 1.6% vs +0.4% vs +0.7% vs -0.3% vs +1% vs -1.6%. All were down except Citi which inexplicably rose by 0.2%??? BofA again most active -1.6% to close below $12 at $11.98 vs -0.8% to $12.17 vs -0.4% vs +0.6% vs +0.3% vs +2% vs  +0.3% vs +1.1% vs -2.8%. The range is $11.11, on 12/17 to $12.78 on 3/20.
  4. Lastly, volatility (S&P VIX), was the big story after reversing five straight declinesto 12.06 surging to 17.28 +5.21 (high and close, +43.2%!) vs 12.84 vs 12.84 vs 13.19 vs 13.92 vs 13.89 vs 14.21 (high of 14.66 from a multi-year low!!!), it finally broke out of the narrow range of 12.06-14.66, average 13.23, well below the 40/50 day (13.53/13.49) and the 200 day at 15.48…ytd the average has been 16.49 with a range of 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.49!!! This could be one very exciting options expiration!!!

Global equity markets WEAK for 3rd time in SIX sessions, ex-India and Korea (relief rally since they weren’t blown off the map?): UK -0.2% vs -1.1%!!! vs -0.4% vs +0.3% vs +0.8%; France FLAT vs -1%! vs -1.1%! vs +0.6% vs +1.3%; Germany FLAT vs -1%! vs -1.5%!!! vs +0.4% vs +1.2%; Japan -0.4% vs -1.6%! vs -0.5% vs +2%!!! vs +0.7%; Hang Seng -0.5% vs -1.4%! vs -0.1% vs +0.3% vs +0.8%; Korea +0.1% vs -0.2% vs -1.3%!!! vs +0.7% vs +0.8%; India +2.1%!!! vs +0.6% vs -1.6% vs +0.7% vs +1% vs -1.2%. U.S. stock futures surging to the upside???? After two weak sessions: DOW +140???; SPX +14.70; NDQ +26.50…this is NUTS!!! Beware of Friday!

Bonds closed STRONG again yesterday but are giving back most of the gains o/n: 10 yr Treasury 1.72% -3/8 vs 1.68% +3/8 (recent range now 2.06% to 1.68%), and the 30 yr’s 3.26% to 2.86%, 2.91% -1-1/8 vs 2.86% +1-1/8???  The long TIP also rallying – finally – after setting a new (record?) low of 0.36%, before backing off to 0.52%, closed 0.42% +1-1/8, now 0.47% -1/1/2 – UST trading like a third world nation!!! The high yield was 0.67%! Libor update: 0.240% 3 mos., 0.436% 6 mos – falling again! Foreign bond yields mixed with problem countries slightly stronger?: Germany 1.27% +2; UK 1.73% +3; France 1.80 +1, Italy 4.29 -4; Spain 4.69% -2; Portugal 5.99% -14!!!; Greece 11.10% vs 11.05% vs 11.05% vs 11.06% vs 11.25% vs 11.43% vs 11.53% vs 11.94% vs 11.20% vs 11.94% vs 12.09% (recent range 10.58-12.57%!).  

Gold suffered its worst decline since 1980 – coming of a record high then!. Monday’s intraday low was $1335.10 – lowest since 9/23/10), closing at $1361.10 -$140.30!!! That’s $205 in TWO sessions – Paulson reportedly losing nearly $1 billion personally over that period! Where is resistance? Dunno…a moving target. Look at the 40 day/50 day to see how disastrous this is: $1580-1597!!! Overnight it is $1395.80 +$34.70!!! with a session low of $13 – lowest since Sept. 2010!!! Crude was also destroyed  closing at $88.71 -$2.58 with an intraday low of  $87.20 – lowest since 12/6/12 –  resistance at the 40 day ($93.30) and the 50 day ($93.99)….but first the 200 day at $91.54!!! The high of $97.80 on 4/1 was highest since 2/15! day Overnight it was  slammed to $86.06 before coming back to $88.23 -.18. The range is now $86.06-$97.80 since Dec ‘12!!!!

 

Some random thoughts:

Gold is NOW off $205 in just THREE sessions…last time that happened was 1980 in the collapse from the record high!…traded to $1321.50 overnight!!! and is just $1394 now! Crude little changed but fell to $86.06 overnight  – lowest since Dec. ’12. It has lost over $7 since Thursday!

John Paulson, who managed to ‘ace’ the mortgage-backed trade in 2008…actually is was his bond guy as Paulson didn’t know a thing about mortgages…has now reportedly lost nearly $1 billion personally on gold. Stupid gold bugs…and he should know better. By the way he qualifies as a ‘one trick pony’ as he was NOTHING before the MBS trade (initiated not by him but his bond guy), and after being blessed with new money on his ‘reputation’ has done little since!

Repeating:

The lesson of this is that there are no guru’s out there and anyone who purports to be – including this writer – should be considered charlatans…avoid like the plague!

TB is disgusted with our government, from Congress to the SEC to Justice Department which under Attorney General Eric Holder has not prosecuted ONE senior banking official despite reams of evidence unearthed for civil suits and a plethora of whistleblowers! Ah, they point to those record fines and civil actions. This proves what a jackass Holder is: first, it is the company who paid the fines while the senior execs continued to reap big salaries and bonuses; second, the fines while records are a joke in proportion to the losses sustained. The only hero here is Sen. Ted Kaufman of Delaware.

Why? Because he was named to Joe Biden’s seat for the remainder of his term. He did not raise one penny of campaign contributions – from anyone – and left in disgust at the end of the term (along with his key aide who resigned the same day for the same reason).

Despite his pleadings, nothing has transpired…Justice (sic) says there wasn’t enough evidence of a ‘crime’ and are proud of the civil proceedings which have hurt all investors from individuals to those pension funds with  enormous and growing unfunded liabilities!

What set TB off on this? Last night, he watched a Frontline from Frontline, January 22nd which sadly I missed due to time constraints. This documentary is chock full of whistle blowers…including a Sr. V.P. from Citi who had memos addressed to senior management AND Robert Rubin. When asked, Rubin said he was sure he referred it to the proper people…BULLSHIT!!! Think about it Rubin who made over $100 million – I call that a bribe – gets away with no embarrassment other than his own inane statements on how he had no idea they were taking so much risk…HE told them to according to a friend and former officer…be more like Goldman!

I urge you to watch this as it is much more detailed and relevant than Inside Job, which was itself scary for the time. Also, don’t forget the John Reed interview with Bill Moyers when he told how Sandy Weill single-handedly dismantled Glass-Steagall…by enlisting the aid of Bill Clinton, Robert Rubin, Larry Summers, and the affable Alan Greenspan! If this doesn’t make you sick I don’t know what does.

Oh, and that argument about not enough evidence? Why is Jon Corzine still out and nothing being done? Because he is a member of two clubs: the Senate and a governor!

Simon Johnson is correct…it is going to happen again because they are either afraid to prosecute or being blinded by campaign contributions…we are following the path of the Romans. Is that what you want? I sure as hell don’t!

Well, the stock market is up – Dow +100 – hmmm…could that be a ‘dead cat bounce’ and short-covering ahead of Friday’s options expiry? YOU BET! Play at your own peril.

Color TB SICK!!!

TB

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