1/8/14…colder than Hades…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I used to sell life insurance. But life insurance is really a weird concept. You really don’t get anything for it. It works like this: You pay me money, and when you die, I’ll pay you money.” – Bill Kirchenbauer…or it could be your wife if she murders you…

Bloomberg Quote of the Day: “In the right light, at the right time, everything is extraordinary.” – Aaron Rose…not to be confused with Pete Rose!

Bloomberg Top Stories:

*Dollar Rallies as Treasuries Drop With gold Before Fed Minutes; Gas Climbs

*German Factory Orders Increase More Than Forecast as Recovery Gathers Pace

*Spain-Greece Bond Rally Gains Momentum on Signs Europe’s Economy Improving

*Hedge Funds Trail S&P 500 for Fifth Straight Year With 7.4% Return in 2013 – who cares? Not the managers who collected 2%+20%; when market dives, they will fold!

*Arctic Front Hampers U.S. Energy Industry With Refinery Production Curbed

*Toys ‘R’ Us Bond Yields Signal Investors Are Dubious of Getting Money Back

*Euro Stress Test Specter Unleashing $82 Billion of Distressed Debt – u feel distressed?

*Richest Danes Face Benefit Cuts as Universal Welfare Abandoned Post Crisis – !!!

*Mortgage Derivatives Seen Unmasking Underwriting Standards – so many ways…

*Barclays Touts Cemex After Mexican Bonds Return 10% on U.S. Rebound –  WTF?

*Bitcoin Banned by Alibaba’s Taobao After China Central Bank Tightens Rules – heed!

*Older Americans Shun Retirement at 65 for Risky Startup Businesses – hear, hear!

*Larry Robbins Tops Hedge Fund List Using Horse Sense to Bet on Obamacare

*No Truce for Turkey as Erdogan Party Vows Revenge After Corruption Probe

*Delta Joins United in Restoring Service After Storms Ground 11,000 Flights – !!!

*Syria Islamist Leader Urges End to Clashes Between Assad Opposition Groups

*Canadian Freight Train Catches Fire After Jumping Rails in New Brunswick – rail beds everywhere are a disgrace, ergo more accidents…and more hazardous materials!

*Barry Ritholtz piece: 10 Reasons Many People Lost Their Shirts Betting on Gold  

Tuesday’s Market Summary:

A rally…oh joy! Volume up and high still not up to Thursday’s close when the selloff began. Honors went to the Nasdaq Composite +1%, the Russell 2000 and the NDQ 100 (despite Apple) both up 0.9%, while Dow Utilities came in at +0.8%. Dow Transports +0.7%, Dow and S&P500 both +0.6%. Tomorrow could be make or break.

NYSE Volume rose to an almost average 3.48B shares vs 3.23B vs 2.76B vs 3.06B. Real NYSE Volume rose to an almost average 6.99M shares vs 669M vs 544M vs 624M.

Advance/Declines and Breadth were both positive, especially Nasdaq. The VIX declined but most importantly closed at 12.93.

The Nasdaq 100 gained 31 points vs -12 vs -25 vs -28 vs +22. Breadth was positive 3.5:1 vs -3:1 vs -2:1 vs -6:1 vs +3:1. 10 members gained more than one index point, while two lost more than a point: GOOG +5.2 vs -2 vs -1.9 vs +2.8 vs -2.2; CMCSA +3.4; AMGN +1.8; MSFT +1.9 vs -5.6! vs -1.9 vs -2 vs +1; AMZN +1.8 vs -1.1; CSCO +1.4; ; EBAY +1.3 vs -1.7; PCLN +1.1; MU +1; APPL -3 vs +4.4 vs -9.7!!! vs -6.4! vs +5.3! vs -2.6 vs -3 vs -2; NFLX -1.5.

Dow 30 +0.6% vs -0.3% vs +0.2% vs -0.8% vs +0.4%; Dow Transports +0.7% vs -1.3%! vs +0.5% vs -1.5%! vs +0.7%; Russell 2000 +0.9% vs -0.8% vs +0.5% vs -1.1%! vs +0.3%; Dow Utilities +0.8% vs +0.2% vs -0.3% vs -1.6%! vs +0.3%; S&P 500 +0.6% vs -0.3% vs – vs -0.9% vs +0.4%; Nasdaq Composite +1% vs 0.4% vs -0.3% vs -0.8% vs +0.5%; NDQ 100 +0.9% vs -0.3% vs -0.7% vs -0.8% vs +0.6%.

*NYSE Volume rose again to an almost average 3.48B shares vs 3.23B vs 2.76B vs 3.06B vs 2.3B vs 2.27B vs 2.04B. The record high (?) is the 4.97B shares of 12/20/13 and Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume also rose to 699M shares vs 669M vs 544M vs 624M vs 568M vs 462M vs 424M, from the new 12-month low of 272M. The average since 12/20 is just 529M shares with a high of 669! The 12 month is 719M shares. Last year there were just TEN 1B+ share sessions! There were 39 800M+ shares in 2013: 18 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They rose again to 316 vs 271 vs 217 vs 201! vs 560 vs 346 vs 445 vs 659. Recent high is a super-strong 890!!! New lows fell to a new recent low of 20 vs 30 vs 23 vs 43 vs 78 vs 72 vs 76 vs  60 vs 44 vs 68 vs 81 vs 127 vs 131. Recent high is 353; low 20!!!  

  1. Advance/Declines were positive: +1.9x vs -1.2x vs +1.8x vs -2x vs +1.9x (recent range -17.5x to +6x) on NYSE and +2.3x vs -1.7x vs +1.6x vs -1.8x vs +1.4x (recent -4x!!! to +3.8x). Breadth was similar: +1.5x vs -1.3x vs +1.2x vs -2.1x vs +2.8x (recent -18.6x!!! to +7.2x!!!) on NYSE and +3.8x!!! vs +1.1x vs +1.2x vs -1.4x vs +2.1x (recent -12.8x to +6.5x).  
  2. NYSE Financials +0.4% vs +0.1% vs +0.5% vs -1% vs +0.4%. BofA most active but lost 1% vs +1.5%??? vs +1.9%??? vs +3.4%??? vs +0.2%, closing at $16.50 -.16 – from a new the highest level since 6/1/10. Brokers +0.7% vs -0.4% vs +0.6% vs -0.4% vs +1.2%!; KBW Banks +0.4% vs +0.4% vs +0.8% vs -0.5% vs -0.5%; Nasdaq Banks +0.5% vs -0.7% vs +0.2% vs -1.3%!!! vs +0.1%.
  3. Volatility (S&P VIX) fell for the 3rd straight time in six days and is back below the 40/50 day and the 200 day closing at 12.92 -0.60! A week ago Thursday’s 11.69 was lowest since 3/15/13!!! High for prior week was 16.67! The recent range is 11.83-21.01!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Bonds budged but up for a 4th day…could change with the release of the FOMC minutes from last month, weaker and slipping overnight : 30 yr 3.91 -7/16; the 10 yr is now 2.98% -5/16, recent high 3.03%! Long TIP 1.52% -5/16. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.240% 3 mos,0.345% 6 mos. (new record lows 0.240%!!! and 0.344% respectively!). Foreign bond yields lower – problem credit yields plunging – Greece to a new post-crisis low!!! Germany 1.88% -1; UK 2.94% -1 from a high of 3.03%!; France 2.48% -1; Italy 3.85% -2; Spain 3.73% -7 vs -10!!!; Portugal 5.28%!!! -4 vs -5 vs -11 vs -17!!!; Greece 7.52%!!! -14!!! vs -23!!! vs 8.03%. Recent range NOW: 7.52%-12.57%. Japan …0.70% +2. Yen stable at 104.78…105.48 was weakest since 10/1/08!!!

Gold had an ‘inside day’ following Monday’s ‘outside day which had a high of $1247.70, highest since 12/16 and above the 40 day, and closed Tuesday at $1229.60 -$8.40! This from last Tuesday’s low of $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. $1200 is sup while $1300 is psychological resistance with major res at the 40 day ($1238!) and the 50 day ($1255!) both still falling! The 200 day is $1343. Overnight it is lower at $1227.10 -$2.50.

Crude also had an ‘inside’ session and closed at $93.67 +.24. Tuesday’s close was $93.43 – lowest since 12/2!!! Note that session low was $93.20, also lowest since 12/2. The weak rally has been eradicated! Note 12/27 was first time above $100 since 10/21!. On 11/27 it printed a new low of $91.77, lowest since 6/3!!! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. It is now below the three key m/a’s which are now major res: 40 day m/a ($95.97!!!), 50 day (95.90!), and the 200 day is $99.03 – the 40/50 still diving and all 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 up slightly at $93.99 +.32.

Overnight markets:

European equity markets slightly weaker, Japan/Hong Kong STRONG: UK -0.4% vs +0.5% vs +0.1% vs +0.3% vs -0.1%; France -0.1% vs +0.4% vs -0.1% vs +0.7% vs -0.8%; Germany -0.1% vs +0.6% vs +0.1% vs +0.5% vs -0.4%; Japan +1.9% vs -0.6% vs -2.4% vs closed three days; Hang Seng +1.3% vs +0.1% vs -0.6% vs -2.2%!!! vs +0.1%; Korea flat vs +0.3% vs +0.4% vs -1.1%! vs-2.2%!!!India +0.2%-0.5% vs -0.3% vs -0.2% vs -1.2%! trend??? U.S. stock futures lower overnight: DOW -20 (range 60); SPX -0.90 (6); NDQ +1.50 (8???).


Some random thoughts:

The Polar Express is slip-slidin’ away…or so they say. -1 was the high here yesterday and supposed to be the same today. Meanwhile with windchill taking us to -20 or worse, you have to find something fun to do. Here are some ideas:

1. Get a cup of hot water. Throw it in the air, watch it vaporize, not a drop hits the ground

2. Like blowing bubbles? Do it outside and watch it freeze, drift to the ground and roll

3. Throw a banana in the air and you can use it for a hammer

4. Crack an egg on the ground, wait a few minutes and you can throw it at a wall

Also, TB was reminded of a poem he hadn’t thought of in years, The Cremation of Sam McGee by Robert Service (1874-1958)…about a guy in the Yukon who could never get warm. When he died he wanted to be cremated, his friend accommodated his last wish:.

There are strange things done in the midnight sun 
By the men who moil for gold; 
The Arctic trails have their secret tales 
That would make your blood run cold; 
The Northern Lights have seen queer sights, 
But the queerest they ever did see 
Was that night on the marge of Lake Lebarge 
I cremated Sam McGee.

Now Sam McGee was from Tennessee, where the cotton blooms and blows.
Why he left his home in the South to roam ’round the Pole, God only knows.
He was always cold, but the land of gold seemed to hold him like a spell;
Though he’d often say in his homely way that “he’d sooner live in hell.”

On a Christmas Day we were mushing our way over the Dawson trail.
Talk of your cold! through the parka’s fold it stabbed like a driven nail.
If our eyes we’d close, then the lashes froze till sometimes we couldn’t see;
It wasn’t much fun, but the only one to whimper was Sam McGee.

And that very night, as we lay packed tight in our robes beneath the snow,
And the dogs were fed, and the stars o’erhead were dancing heel and toe,
He turned to me, and “Cap,” says he, “I’ll cash in this trip, I guess;
And if I do, I’m asking that you won’t refuse my last request.”

Well, he seemed so low that I couldn’t say no; then he says with a sort of moan:
“It’s the cursèd cold, and it’s got right hold till I’m chilled clean through to the bone.
Yet ’tain’t being dead—it’s my awful dread of the icy grave that pains;
So I want you to swear that, foul or fair, you’ll cremate my last remains.”

A pal’s last need is a thing to heed, so I swore I would not fail;
And we started on at the streak of dawn; but God! he looked ghastly pale.
He crouched on the sleigh, and he raved all day of his home in Tennessee;
And before nightfall a corpse was all that was left of Sam McGee.

There wasn’t a breath in that land of death, and I hurried, horror-driven,
With a corpse half hid that I couldn’t get rid, because of a promise given;
It was lashed to the sleigh, and it seemed to say: “You may tax your brawn and brains,
But you promised true, and it’s up to you to cremate those last remains.”

Now a promise made is a debt unpaid, and the trail has its own stern code.
In the days to come, though my lips were dumb, in my heart how I cursed that load.
In the long, long night, by the lone firelight, while the huskies, round in a ring,
Howled out their woes to the homeless snows— O God! how I loathed the thing.

And every day that quiet clay seemed to heavy and heavier grow;
And on I went, though the dogs were spent and the grub was getting low;
The trail was bad, and I felt half mad, but I swore I would not give in;
And I’d often sing to the hateful thing, and it hearkened with a grin.

Till I came to the marge of LakeLebarge, and a derelict there lay;
It was jammed in the ice, but I saw in a trice it was called the “Alice May.”
And I looked at it, and I thought a bit, and I looked at my frozen chum;
Then “Here,” said I, with a sudden cry, “is my cre-ma-tor-eum.”

Some planks I tore from the cabin floor, and I lit the boiler fire;
Some coal I found that was lying around, and I heaped the fuel higher;
The flames just soared, and the furnace roared—such a blaze you seldom see;
And I burrowed a hole in the glowing coal, and I stuffed in Sam McGee.

Then I made a hike, for I didn’t like to hear him sizzle so;
And the heavens scowled, and the huskies howled, and the wind began to blow.
It was icy cold, but the hot sweat rolled down my cheeks, and I don’t know why;
And the greasy smoke in an inky cloak went streaking down the sky.

I do not know how long in the snow I wrestled with grisly fear;
But the stars came out and they danced about ere again I ventured near;
I was sick with dread, but I bravely said: “I’ll just take a peep inside.
I guess he’s cooked, and it’s time I looked”; … then the door I opened wide.

And there sat Sam, looking cool and calm, in the heart of the furnace roar;
And he wore a smile you could see a mile, and he said: “Please close that door.
It’s fine in here, but I greatly fear you’ll let in the cold and storm—
Since I left Plumtree, down in Tennessee, it’s the first time I’ve been warm.”

There are strange things done in the midnight sun 
By the men who moil for gold; 
The Arctic trails have their secret tales 
That would make your blood run cold; 
The Northern Lights have seen queer sights, 
But the queerest they ever did see 
Was that night on the marge of Lake Lebarge 
I cremated Sam McGee.

Now that we killed the first half hour, let’s talk politics. What on earth was Harry Reid thinking when he told the world Sunday on MTP that it wasn’t the republicans that were the problem it was the extremists (Tea Party, etc.). Over and over he said it. Then, in the GOP rebuttal they were perplexed and blamed him for the ills and said so much for working together. Look, they tried to ‘make nice’ but it isn’t in their composition these days. One day after the ‘accord’ came discord when some GOP members said they would extract ransom for this. So, perhaps…and far be it for TB to think he can read Harry’s mind (?). But the point is it was all a sham and is going to get ugly going forward. Take the attempt to restore emergency unemployment which was cut off with no notice on Dec. 28th. The GOP has the unmitigated gall to say they won’t restore it without $9 billion in offsetting spending cuts. Do these clowns have any idea what they are doing? First, the sequestration has produced more draconian cuts than Simpson-Bowles called for. Second, as Reid rightly said, all of that money paid out is spent immediately and a good portion comes back in the way of taxes. Wake up America and find your soul!

TB went see The Wolf of Wall Street yesterday…gratuituitous sex, drugs, rock and roll, still pondering…comments tomorrow.

Have a great day!  Stay warm! 



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