9/17/13…the banks have it!

Today’s Quote from the Friars Club Encyclopedia of Jokes: “When my enemies stop hissing, I shall know I’m slipping.” – Maria Callas

 

Bloomberg Quote of the Day: “Ocean, who is the source of all.” – Homer

Bloomberg Top Stories:

*Less Tapering Becomes Tightening in Credit Market No Matter What Fed Says

*Stocks Fall From Five-Year High as Treasuries Gain Before Fed; Oil Drops!!!

*Ex-JPMorgan Traders Indicted in New York Over $6.2 Billion in Bank Losses

*German Investor Confidence Jumps to Three-Year High on Outlook for Economy

*First Lloyds Stake Sale Produces $95 Million Profit for British Taxpayers

*Dell Heralds Race Against Fed as JPMorgan Sees More Deals – bonds that is!

*Aging Boomers Befuddle Global Marketers Trying to Grab $15 Trillion Prize

*Assad Championed in Damascus as Canny Survivor Playing With U.S. for Time

*Lone Suspect in D.C. Navy Yard Shooting Rampage Had History of Gun Arrests

*Costa Concordia Raised From Rocks Off Giglio in 19-Hour Salvage Operation

*Iran Ready to Reach Breakthrough on Nuclear Program, Top Negotiator Says

NOTE: Friday is options expiration – a quadruple witching! CAUTION!!!

Told you this week could be volatile…by the numbers: bonds rallied early Monday only to fall fal and close weaker – but only the long bond and long TIPS while the 10 yr managed to close up 1/4??? Crude trashed closing at $106.59, lowest close since 8/26 and completely eradicates the rally. Stocks opened strong then fades with only Dow Transports up 1.1% and BOTH Nasdaq indices slightly negative. Now for more confusion and again indicative of a coming options expiration, Advance/Declines and Breadth were positive on NYSE but almost even on Nasdaq. Volume rose but remains extremely weak. New 52-week highs doubled while new lows were almost halved. Lastly, Volatility ROSE closing at 14.38 after first falling to 13.87…confusing!

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

*NYSE Volume climbed back to a weak 3.06B shares from a very weak 2.7B vs 3.06B vs 3.1B vs 3.46B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume also meekly rose to 627M shares vs 567M, lowest since 8/26, vs 642M vs 657M vs 773M (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 – the Hex! – 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 more than doubled to 449 vs 191 vs 271 vs 355M vs 429. New lows were halved to 45 vs 87 vs 95 vs 100 vs 65: 579-27 is the recent range.

  1. Advance/Declines were moderately positive: +2.1x vs +1.6x vs -2.1x vs +1.3x vs +1.8x; (recent range -17.5x to +4.4x) on NYSE and +1.2x vs +1.5x vs -1.8x vs -1.1x vs +2x (recent -3.5x to +3.8x). Breadth was similar: +2x vs +1.7x vs -2.2x vs +1.5x vs +2.5x (recent -18.6x!!! to +6.9x!!!) on NYSE and +1.1x vs +1.4x vs -2.2x vs +1.4x vs +2x (recent is -12.8x to +6.5x)  
  2. NYSE Financials rose by 1%? vs +0.2% vs -0.6% vs +0.2% vs +1.1%. BofA most active +0.4% vs +0.2% vs -1.2% vs +0.3% vs +1.1%, closing at $14.54 +.05. It has struggled since hitting $15.03 a month ago – highest since Jan. 14 and major res. Brokers +0.9% vs +0.4% vs -0.9% vs -0.8% vs +1.5%;  KBW Banks +0.2% vs +0.2% vs -0.6% vs -0.3% vs +1%; Nasdaq Banks +0.2% vs +0.3% vs -0.5% vs -0.4% vs +0.7%.  
  3. Volatility (S&P VIX) dove to 13.87 then rose to close at 14.38 +.22 with a high of 14.49, 14 is key for now. Two weeks ago 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 lower ex-India: UK -0.4% vs +0.8% vs -0.2% vs +0.1% vs -0.1%; France -0.2% vs +0.9% vs flat vs -0.1% vs -0.1%; Germany -0.2% vs +1.2%! vs +0.1% vs +0.1% vs +0.5%; Japan -0.7% vs closed vs +0.1% vs -0.3% vs flat; Hang Seng -0.3% vs +1.5%! vs -0.2% vs +0.1% vs -0.2%; Korea -0.4% vs +1% vs -0.5% vs flat vs +0.5%; India +0.3% vs +0.1% vs -0.3% vs +0.4% vs flat vs +3.8%. U.S. equity futures little changed and back to a very narrow trading range: DOW +6; SPX +0.20; NDQ +5.

Bonds rallied nicely early yesterday only to give back most of the gains and the long bond and TIP both closed weak. Overnight another attempt to rally…can it hold? 10 yr Treasury 2.83% +5/16 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, now 3.84% +1/2. The long TIP is now 1.53% +7/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.252% 3 mos, 0.376!!! 6 mos. Another new record low on 6 mos. and 3 mo. is knocking at the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields mixed: Germany 1.95% +1; UK 2.90% +3; France 2.47% -1, Italy 4.41% -4; Spain 4.39% -2; Portugal 7.09% -5; Greece 10.12% +4. 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 0.71% -1.

Gold managed to eke out a slight gain and the session high was $1336 – above the 50 day – closing at $1317.80 +$9.20 – following a two day loss of $65!!! Friday’s low $1304.60!!! 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 next and psychological support, while the 40 day ($1350) and the 50 day ($1334) are res. The 200 day is at $1491. Overnight it is little changed at $1319.40 +$1.30. Crude closed weak again…especially technically at $106.59 -$1.62, six days after setting a rally high and close of $110.70 and $110.53 respectively – Monday’s session low $106.06! It is now between the 40/50 day m/a’s (106.71/106.55), both rising. The 200 day ($96.80) 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 lower at $106.21 -.38 BUT the really bad news is the low print of $105.59, totally obliterating the rally from 9/3!!! All this despite the lowest crude supplies in a year!

Some random thoughts:

Why is there so much apathy? Total lack of empathy for those who have suffered thanks to the greed of the financial sector. But it is worse than apathy…there is contempt for those who lost their homes ignoring totally the fact that the ones who shouldn’t have been able to buy a home got them thanks to the ‘conspiracy’ of realtors, appraisers, and those who gained the most from it: mortgage brokers…some of them our nations ‘finest’ banks.

No, instead of any type of sympathy or understanding, the right wing of the GOP, (which now makes Reagan look like a flaming liberal), continues to mollify the wealthiest and fight any attempt to make them pay…even the 15% tax break on ‘carried interest’ which is no more than ordinary income. We passed Dodd-Frank, yet despite all the talk of saving us, it has been so weakened (the latest being a removal of the requirement to retain a 20% interest in any risky loans they sell!). Who are the winners? JPMorgan most definitely and especially Jamie Dimon and other BIG bank CEO’s along with their support team. Meanwhile, no one…from the loan originators up has been prosecuted…no perp walks…no shame…no clawbacks of bonuses…what kind of message does this send?

Oh, they finally get it…indictments issued for two former JPM traders…bully! This on a $6 billion loss…a pittance compared to the problems created by bank managements five years ago.

Hank Paulson subject of a newly released documentary interviewed on PBS Nightly News last night…no regrets…not even that he encouraged the bankers to increase bonuses! How about that???

This leads to another point. A new study shows that IF the minimum wage had risen with productivity gains it would now be $14 an hour….silly…now how could we pay the CEO’s those outlandish bonuses if we did that? Sheesh!!!

Only the strong survive…must be the new motto of the U.S. Put it on the back of the buck in place of ‘in god we trust’?

Have a good one!

TB

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