12/2/13…give until it hurts or try to!

Today’s Joke of the Day from the Friar’s Club Encyclopedia of Jokes “

Bloomberg Quote of the Day: “Don’t ever take a fence down until you know why it was put up.” –  Robert Frost…from one who knows, author of the poem ‘Mending Walls’

Next week’s economic calendar is packed with important indicators. The highlight of the week will be the November ISM Manufacturing Survey (Monday), November ISM Non-Manufacturing Survey (Wednesday) and November Employment Situation report (Friday). We will also get October Construction Spending (Monday), November Motor Vehicle Sales (Tuesday), November ADP Employment, October International Trade and October New Home Sales (Wednesday), Q3 2nd Estimate and October Factory Orders (Thursday), October Personal Income, December Consumer Sentiment Preliminary and October Consumer Credit (Friday). Courtesy of Economic Advisory Service.

Bloomberg Top Stories:

*Weak Black Friday Results Presage Price Wars as Stores Fight to Win Season – win?

*Government Bonds Drop Around the World on Manufacturing Data as Kiwi Gains

*U.K. Manufacturing Growth Increases to Fastest Pace in Almost Three Years

*Hilton Worldwide Is Seeking as Much as $2.4 Billion in Record Hotel IPO – pass!

*Fund Managers Press U.K. Regulator for more Disclosure on Currency-Rigging

*Lloyds Names Scottish Widows’ Blackwell as Chairman to Replace Bischoff

*Stocks Beat All Assets for Third Month in Longest Winning Run Since 2009

*Britons Poised to Surpass Online Holiday Spending Records on Cyber Monday

*Pound Bid by Scottish Nationalists Splits Cameron From Traders

*BofA Detects Arbitrage Profits Exploiting Argentine Peso-Rate Gap – ah, yes, BofA

*Barrick’s Thornton Said to Seek Chinese Partnership to Rebuild Gold Miner – now???

*Detroit Retirees Got Extra Interest After Taxpayers Guaranteed 7.9% Return – not the only ones. Some years back, San Francisco did the same! Think about that!

*Metro-North Derailment Killing Four Puts Spotlight on Rail Safety Issues

*Ukraine Protestors Try to Shut Government Buildings After Night of Clashes – get your Winter Olympics ticket here…something you don’t want to miss even if it kills you!

*Somali Prime Minister Removed After Confidence Vote (sic) Amid Cabinet Dispute

*U.S.-Japan Split on Handling China Zone Puts Airlines in Center of Dispute – oops!

Friday’s Market Summary:

TB was right…er, proven right. Not only did little happen on Friday (recall TB said that the month ended on Tuesday – to get enough action to square positions for index funds for month-end – with a volume surge from a weak 2.98B shares to an ‘near’-average 3.28B, highest of the week, then returned to 2.6B on Wednesday and closed the week at perhaps the low of the year, just 1.59B shares or about half an average session! Meanwhile, REAL NYSE Volume plunged to 1.59B shares – taking out 12/24/12’s 286M for a new 12-monrh LOW!!!  This from a weak 482M shares (a tie with July 3rd, a half day) in contrast to Tuesday’s strong 828M shares of which most was position squaring…obviously! The only item of note was the Dow which once again surged on the open to a new high of 16174.51 +77, only to backtrack and close -0.1% on the session! Dow Transports were the loser, -0.3%, Dow Utilities were flat, S&P 500 -0.1% along with NYSE Financials, while the Russell 2000 was up 0.1% AND the winner were the two Nasdaq’s +0.5%!

Note that daily highs on the Dow have been above 16k every day since 11/15! The number of up days since is 10 with now three losing sessions, 11/19-20-29.

Can we hold on until 12/31, and if so, why???  

Advance/Declines and Breadth were positive for a second day, but not by much. New 52 week highs slipped but remain high at 560 from a huge 602 from 456 vs 540 vs 477 vs 348 vs 170, while new lows were halved again to 35 vs 64 vs 111 vs 111 vs 88 vs 123 vs 118 vs 93 vs 56. VIX HOWEVER ROSE, closing at 13.70 +.72 – not only above 13 but very close to 14 with a session high of 13.78! Remember TB’s warning about ‘13’!

Bonds were little changed and mixed, remaining weak. The long end remains precariously close to the 8/21-11/20 3.92-3.93% levels!!! Gold closed higher for a change, but last Monday’s $1226 was lowest print since July 8th. Crude closed meaninglessly higher at $92.78 +.48, and is coming off a new low of $91.77 – lowest since June 3rd! Last Friday’s close of $95.44, highest since 11/1 – and a high print of $95.63???

The Nasdaq 100 rose by another 17 points vs +25 vs +18 vs +5.5 vs +19, or +0.7% vs +0.5% vs +0.2% vs +0.6% vs +1.1% BUT by 1:1 vs +7:3 vs +1.8:1 vs -1.8:1 vs +3.2:1 vs +6.6:1. Just FOUR members gained more than a point – all the usual suspects –  while none lost more than a point: APPL 8.2!!! vs +9.9!!! vs +7.8!!! vs +3.2 vs -1 vs +4.9 vs -3.6 vs -0.3 vs -5.2; MSFT +3.9 vs -2.2; AMZN +2.8 vs +2.1 vs +1.9 vs +1.8 vs +1.4 vs +2.6 vs -1; EBAY +1.4….tha-tha-that’s all folks!

Dow 30 -0.1% vs +0.2% vs flat vs +0.1% vs +0.3%; Dow Transports -0.3% vs +0.6% vs -0.1% vs +0.3% vs +0.4%; Russell 2000 +0.1% vs +0.6% vs +0.9% vs flat vs +0.5%; Dow Utilities flat vs -0.4% vs -0.9%! vs +0.1% vs -0.1%; S&P 500 -0.1% vs +0.3% vs flat vs -0.1% vs +0.5%; Nasdaq Composite +0.4% vs +0.7% vs +0.6% vs +0.1% vs +0.6%; NDQ 100 +0.5% vs +0.7% vs +0.5% vs +0.2% vs +0.6%.

*NYSE Volume imploded once again to 1.59B shares, a new low! vs 2.6B vs 3.27B vs 2.98B vs 3.05B. Since 11/11 the average has been just 3.0B shares – that is weak!!! The record high (?) is 4.82B shares on Q3 end of quarter while 1.59B is weakest of 2013, replacing 1.96B as the low). REAL NYSE Volume was worse, further imploding to 474M shares (new 12-month low vs 482M (lowest since 7/3, a half day!) from a STRONG 828M vs 626M vs 607M (2.06B shares on the Sept. expiry was 3rd highest ever: 6/30/06 3.38B; 7/12/02 2.29B while Friday’s 474M is the new 12-month low). Since 11/11 the high has been 828M shares on 11/26 followed by 796M shares on 11/15, thus only two days with a ‘7’ or higher handle! The 12-month average is 720M shares. The average since 6/28’s 1.75B share day is just 694M shares, ranging from 482M to 2.025B shares on 9/20. This year there have been just NINE 1B+ share sessions! There have been 38 800M+ shares in 2013: 16 up, 19 down, and now three mixed.

*New 52 week highs have ranged from 33-864. They slipped to 560 vs 602 vs 456 vs 540 vs 477. Recent high is a super-strong 890!!! New lows were halved again to 35 vs 64 vs 111 vs 111 vs 88.  

  1. Advance/Declines were barely positive for a second day: +1.2x vs +1.7 vs +1.3x vs -1.2 x vs +1.6x (recent range -17.5x to +6x) on NYSE and +1.6x vs  +2.4x vs +1.8x vs +1.1x vs +1.6x (recent -4x!!! to +3.8x). Breadth was similar: +1.1x vs +1.7x vs 1:1 vs -1.2x vs +1.9x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.5x vs +2.6x vs +1.4x vs -1.2x vs +1.4x (recent -12.8x to +6.5x).  
  2. NYSE Financials slipped 0.1% vs +0.4% vs flat vs -0.1% vs +0.4%. BofA 2nd most active -0.1% vs -0.3% vs +0.4% vs +1.1% vs +0.3%, and closing at $15.82 -.01, while last Monday’s new 12-month high was $15.98, highest since 6/1/10. Had not been above $15 since 8/10. Brokers flat vs +0.4% vs +0.1% vs +0.4% vs +0.5% vs +2.2%!; KBW Banks -0.1% vs +0.3% vs -0.3% vs +0.4% vs +2.3%; Nasdaq Banks flat vs +0.7% vs 0.5% vs +0.8% vs +1.7%.
  3. Volatility (S&P VIX) surged breaking 13 after being below it for four days, rising to 13.70 +.72 +.10, with a session high of 13.78!!! The recent range is 11.83-21.01!!! Since March 11th the average has been just 14.44…way below the five year average of 23.32~~~ and the 40/50/200 day: 14.01/14.31/14.37!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks lower ex-Hang Seng/India: UK +0.3% vs -0.4% vs +0.3% vs -0.2% vs flat; France +0.1% vs -0.3% vs +0.5% vs +0.2% vs 0.3%; Germany +0.1% vs flat vs +0.9% vs flat vs -0.2%; Japan flat vs -0.4% vs0.4% vs -0.7% vs +1.5%; Hang Seng +0.7% vs +0.4% vs +0.5% vs flat vs -0.5%; Korea -0.7% vs flat vs +0.3% vs +0.3% vs +0.5%; India +0.5% vs +1.4%! vs flat vs -0.9% vs +1.9%; U.S. stock indices opening mixed to lower: DOW -37; SPX +1.20; NDQ -2.40.

Bonds were little changed and mixed Friday but off about 3/8 this morning but at least off their lows: 10 yr Treasury 2.77% -1/4 (recent range 1.63% to2.99%), and the30 yr range 2.67% to 3.92%, 3.83% -3/8. The long TIP is 1.53% -3/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.239% 3 mos,0.346% 6 mos. (both just above their new record lows!). Foreign bond yields higher ex-Greece: Germany 1.73% +4; UK 2.83% +6; France 2.17% +2; Italy 4.07% +1; Spain 4.14% +3; Portugal 5.86% +6; Greece 8.54% -4. Recently: 7.71% – 12.57%. Japan 0.61% +1.

Gold rallied Friday but has given it all back overnight, however last Monday’s low of $1226.40, lowest since 7/8, is still holding. It closed at $1250.40 +$15.500. A week ago the high was $1293.80! Recent high was $1375.40 on 9/19. 6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 remains psychological resistance with major res at the 40 day ($1297!) and the 50 day ($1303), both still dropping. Major resistance at $1375, the 9/19 high. The 200 day is a distant $1391. Overnight it is weaker at $1235.10 -$15.30. one forward, two back?

Crude had a nothing day and managed to close higher a day following a new low of $91.77, lowest since 6/3!!! It closed at $92.78 +.48. It has shown no sign of strength since 9/18’s surge to $108.49. 9/19’s session high was $108.99! Recent rally high and close are $110.70 and $110.53 respectively. It is way below the 40/50 day m/a’s ($97.05/98.27), both still dropping and major resistance! The 200 day ($98.47) is now slightly above the 40/50 day!!! Thus very major resistance! 4/18’s low of $85.61 was lowest since 12/11! The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $93.34 +.62 – still nothing to see here!

 

Some random thoughts:

TB is not a Catholic and would never consider becoming one, especially in light of the sexual molestations that they have tried so hard to cover up…until now? Finally!

They have elected a Pope which has set the European order of the Church back on its heels and IMHO, like the GOP, if it doesn’t reform its ways will fade into oblivion.

Francis took the name of St. Francis of Assisi, and if you ever go there…and especially take the time to go a mile further up the mountain to the hermitage, Eremo delle Carceri, where the great man took his retreats, you might be able to understand him..

Per the Washington Post: In the first lengthy writing of his papacy — also known as an “apostolic exhortation” — Pope Francis says such economic theories naively rely on the goodness of those in charge and create a “tyranny” of the markets.

“In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world,” the pope wrote. “This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. Meanwhile, the excluded are still waiting.”

“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say ‘thou shalt not’ to an economy of exclusion and inequality,” the pope wrote. “Such an economy kills.”

The pope also likened the worship of money to the biblical golden calf.

“We have created new idols,” Francis wrote. “The worship of the ancient golden calf … has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose.”

The pope also attacks “consumerism”: “It is evident that unbridled consumerism combined with inequality proves doubly damaging to the social fabric.”

“Just as the commandment ‘Thou shalt not kill’ sets a clear limit in order to safeguard the value of human life, today we also have to say “thou shalt not” to an economy of exclusion and inequality. Such an economy kills. How can it be that it is not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points? This is a case of exclusion. Can we continue to stand by when food is thrown away while people are starving? This is a case of inequality. Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized: without work, without possibilities, without any means of escape.

Human beings are themselves considered consumer goods to be used and then discarded. We have created a “disposable” culture which is now spreading. It is no longer simply about exploitation and oppression, but something new. Exclusion ultimately has to do with what it means to be a part of the society in which we live; those excluded are no longer society’s underside or its fringes or its disenfranchised – they are no longer even a part of it. The excluded are not the “exploited” but the outcast, the ‘leftovers’.”

“A financial reform open to such ethical considerations would require a vigorous change of approach on the part of political leaders. I urge them to face this challenge with determination and an eye to the future, while not ignoring, of course, the specifics of each case. Money must serve, not rule! The Pope loves everyone, rich and poor alike, but he is obliged in the name of Christ to remind all that the rich must help, respect and promote the poor. I exhort you to generous solidarity and a return of economics and finance to an ethical approach which favours human beings.”

No to the inequality which spawns violence

“Today in many places we hear a call for greater security. But until exclusion and inequality in society and between peoples is reversed, it will be impossible to eliminate violence. The poor and the poorer peoples are accused of violence, yet without equal opportunities the different forms of aggression and conflict will find a fertile terrain for growth and eventually explode. When a society – whether local, national or global – is willing to leave a part of itself on the fringes, no political programmes or resources spent on law enforcement or surveillance systems can indefinitely guarantee tranquility. This is not the case simply because inequality provokes a violent reaction from those excluded from the system, but because the socioeconomic system is unjust at its root. Just as goodness tends to spread, the toleration of evil, which is injustice, tends to expand its baneful influence and quietly to undermine any political and social system, no matter how solid it may appear. If every action has its consequences, an evil embedded in the structures of a society has a constant potential for disintegration and death. It is evil crystallized in unjust social structures, which cannot be the basis of hope for a better future. We are far from the so-called “end of history”, since the conditions for a sustainable and peaceful development have not yet been adequately articulated and realized.”

“Today’s economic mechanisms promote inordinate consumption, yet it is evident that unbridled consumerism combined with inequality proves doubly damaging to the social fabric. Inequality eventually engenders a violence which recourse to arms cannot and never will be able to resolve. This serves only to offer false hopes to those clamouring for heightened security, even though nowadays we know that weapons and violence, rather than providing solutions, create new and more serious conflicts. Some simply content themselves with blaming the poor and the poorer countries themselves for their troubles; indulging in unwarranted generalizations, they claim that the solution is an “education” that would tranquilize them, making them tame and harmless. All this becomes even more exasperating for the marginalized in the light of the widespread and deeply rooted corruption found in many countries – in their governments, businesses and institutions – whatever the political ideology of their leaders.”

 

Too deep for you? Then perhaps this article will bring it into focus. St. Francis, from whom this Pope (a man among men), has taken his name, exemplified the spirit of Hannukah and Christmas.  TB hopes anyone who spent their money on these will feel at least some sense of shame, and stupidity: Top-10-Most-Ridiculous-Luxury-Items

Think of the film, Trading Places, where at the end, Mortie and Randolf Duke, have this conversation:

Randolph Duke: Pay up, Mortimer. I’ve won the bet. 

Mortimer Duke: Here, one dollar. 

Randolph Duke: [chuckling] We took a perfectly useless *psychopath* like Valentine, and turned him into a successful executive. And during the same time, we turned an honest, hard-working man into a violently… deranged, would-be killer!
[laughs

Just a movie, you say? Try substituting Charles and David Koch for Mortie and Randy! Then think how they more than anyone in America have hi-jacked this great country in their quest to be not only the 6th wealthiest in America but THE wealthiest…and the ‘sheep’ of the Tea Party silently do their bidding while losing all that is dear to them.

Hope you have a great week…but think what the holidays are all about. L’chaim!

TB 

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