9/12/13…the bankers have it…or have us by the…

Today’s Quote from the Friars Club Encyclopedia of Jokes: “The degree of one’s emotion varies inversely with one’s knowledge of the facts – the less you know- the hotter you get.” – Bertrand Russell

Bloomberg Quote of the Day: “If anything is sacred the human body is sacred.” – Walt Whitman…well maybe not to a terrorist!

Bloomberg Top Stories:

*Verizon Produces $2.09 Billion Windfall for Investors in Record Bond Sale

*European Stocks Erase Losses as Yen Strengthens With Bonds; Gold Declines

*Carney Says Investors at Odds With Bank of England on Unemployment Outlook

*Second-Life Bankers Thrive in Dubai as Boutique Firms Increase Fee Income

*Summers Seen Prone to Tighter Fed Credit Than Yellen in Poll of Investors

*Verizon Bonds Expose Hidden Demand as Traders See Bargain Before Bernanke

*India July Industrial Output Rises 2.6% on Year Against Estimate for Drop

*More Boom-and-Bust Anticipated With Dubai Cash-Driven Recovery

*Made-for-TB America’s Cup Meets Sailor’s Death in Pursuit of Killing Speed

*U.S. to Press for Syria Timeline on Surrendering Weapons Amid Putin Appeal

*Russian Leader’s Gambit Gets Personal With Nefoundland Clout Hinging on Assad

*U.S. Regulators Warn Banks Not to Flout $25 Billion Foreclosure Settlement

Ah, another up day yesterday…how special! Friday was too…of sorts, following an incredibly bad payrolls report (revisions mostly resulting in a lack of job creation) while the participation rate trickled down to the lowest in decades! Makes you want to go out and buy stocks doesn’t it…any stock. Note this morning the bad news on banks, especially BofA…gosh, and financials have done so well…ah, but no worries…they have succeeded into turning Dodd-Frank into something good only for lighting a fire, not for protecting the U.S. taxpayer…they even eradicated the provision that required them to retain a 20% interest in any subprime loans that they sold off…ain’t that a kick??? Sooo, will report it but not with any interest (no pun intended):

* Dow 30 +0.9% vs +0.9% vs +0.9% vs -0.1% vs flat; Dow Transports flat vs +1.9% vs +1.4% vs -0.2% vs +0.6% vs +1.2%; Russell 2000 flat vs +0.9% vs +1.6% vs flat vs +0.3% vs +1.1%; Dow Utilities -1.1%! vs +0.8% vs +0.5% vs +0.6% vs -0.3%; S&P 500 +0.3% vs +0.7% vs +1% vs flat vs +0.1% vs +0.8%; Nasdaq Composite -0.1% vs +0.6% vs +1.3% flat vs +0.3% vs +1%; NDQ 100 -0.2% vs +0.5% vs +1.2% vs flat +0.2% vs +1%.

*NYSE Volume declined to a below average 3.1B shares vs 3.46B vs 3B vs 2.1B vs 2.9B vs 3.3B vs 3.7B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume fell sharply to a weak 657M shares vs 773M vs 638M vs 672M vs 630M vs 728M vs 787M vs 768M  (482M on 7/3 in a shortened trading session is the low). The 12-month average is 719M shares. The range since 6/28’s 1.75B share day, excluding the four sessions above 800M, is 482M-798M shares. The average since 6/28 is just 666M shares, ranging from 482M to 906M. There have been just SEVEN 1B+ share sessions! There have been 31 800M+ shares in 2013: 12 up, 17 down, and two mixed.

*New 52 week highs have ranged from 33-864. They fell sharply to a still solid 355M vs 429 vs 309 vs 227 vs 158 vs 136. New lows rose to 100! vs 65 vs 49 vs 87 vs 60 vs 99 – 579-27 is the recent range.

  1. Advance/Declines were mixed: +1.3x vs +1.8x vs +4x vs n/a vs -1.1x vs +2.5x; (recent range -17.5x to +4.4x) on NYSE and -1.1x vs +2x vs +3.1x vs n/a vs +1.5x vs +1.9x (recent -3.5x to +3.8x). Breadth was slightly positive: +1.5x vs +2.5x vs +6.4x! vs n/a vs +1.8x vs +3.5x (recent -18.6x!!! to +6.9x!!!) on NYSE and +1.4x vs +2x vs +6.5x!!! vs n/a vs +3x vs +3.2x (recent now -12.8x to +6.5x)  
  2. NYSE Financials rose by a weak 0.2% vs +1.1% vs +1.6% vs +0.2% vs +0.4% vs +0.9% vs +1.1%. BofA 2nd most active to Nokia +0.3% vs +1.1% vs +0.8% vs +0.1% vs +0.4% vs +0.5%, closing at $14.65 +.04. It has struggled since hitting $15.03 a month ago – highest since Jan. 14 and major res. Brokers -0.8% vs +1.5% vs +1.5% vs n/a vs +0.7% vs +1.6%; KBW Banks -0.3% vs +1% vs +0.7% +0.7% vs flat vs +0.7%; Nasdaq Banks -0.4% vs +0.7% vs +0.7% vs n/a vs +0.7% vs +0.3%.  
  3. Volatility (S&P VIX) plunged again this time breaking 14 to 13.82 – .71, closing at the low! A week ago Friday it closed at 17.01 but a week prior it was at 13.98. The recent range is now 11.83-17.81. It peaked at 22.79 on 12/28/12. It is now below the 40 day (14.12), the 50 day (14.33) and the 50 day (14.24)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks mixed again: UK +0.1% vs -0.1% vs +0.9% vs n/a vs +0.1%; France -0.1% vs -0.1% vs +1.6% vs n/a vs +0.1%; Germany +0.1% vs +0.5% vs +1.9% vs n/a vs +0.1%; Japan -0.3% vs flat vs +1.5% vs n/a vs -1.5%; Hang Seng +0.1% vs -0.2% vs +1% vs n/a vs +0.1%; Korea flat vs +0.5% vs +1% vs n/a vs +0.2%; India +0.4% vs flat vs +3.8%!!! vs +1.5% vs +1.5% vs +2.2%!!! vs +1.8%!!!…well above the 200 day m/a! U.S. equity markets opening mixed: DOW +6; SPX +2; NDQ flat.

Bonds rallied yesterday, the gains almost exactly offsetting Tuesday’s loss! Overnight they are higher: 10 yr Treasury 2.87% +3/8 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, now 3.81% +3/4. The long TIP is now 1.49% +1 point adding to yesterday’s 1-1/4 gain. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.254% 3 mos, 0.384% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond mostly lower ex-Portugal and Greece: Germany 1.98% -7; UK 2.93% -7; France 2.53% -5, Italy 4.53% +1; Spain 4.47% -1; Portugal 7.09% +8; Greece 10.07% +7 Look at some of its recent big moves: 10.05% -19; 10.03% +11; 9.75% +24!; 9.64% -18; 9.81% -10; 10.02% +19; 9.95% +17; 9.86% -13; 10.02% -16; 10.27% -1; 10.33% -25!; 10.85% +28!; 10.54% +40!!!; 10.85% -37!!!. Recent range: 8.04% to 12.57%. Japan 0.72% -1.

Gold closed little changed at $1363.80 -.20. 8/14’s session low was $1271.80 – lowest since 7/17! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 is psychological support, but it is still above both the 40 day ($1347) and the 50 day ($1330). The 200 day is at $1498. Overnight it is sharply lower at $1330.20 -$33.60 – breaking the 40 day an at the 50 day supports! Crude also closed little changed at $107.56 +.17 – on an inside session, three days after setting a rally high and close of $110.70 and $110.53 respectively – session low $106.39! It remains above the 40/50 day m/a’s (106.70/106.17), both rising. The 200 day ($96.49) is distant support. 4/18’s low of $85.61 was lowest since 12/11! Major Res is the high the spike to $112.24 on 8/28. That move was immediately rejected! The range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed at $107.53 $.14.

Some random thoughts:

Stocks are rallying…what’s not to like? Turns out plenty:

  1. Obama in trouble – and the old saw is that when the president is in trouble stocks are in trouble…but not with the new paradigm!
  2. Congress is a bunch of jackasses on the take for campaign contributions and the biggest do-nothing Congress TB has ever seen…and at a time when we need action on all fronts…appointments….the Fed…debt ceiling…minority rules!
  3. Middle East…see yesterday!
  4. Banks continue to fleece people to pay CEO’s huge bonuses to elevate them into the billionaires club…while circumventing and weakening Dodd-Frank and any other proposed regulatory controls.
  5. THE FED…terms expiring…confusion over whether Yellen (good) will be named Chairman to succeed Bernanke or Summers (bad!!!).

Could name more but that is enough for now…smile if you can stomach it!

Have a great day!

TB

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