1/22/14…the top 0.001% why is it all about them?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Don’t believe in superstition, it brings bad luck.” – anon

Bloomberg Quote of the Day: “I only want people around me who can do the impossible.” – Elizabeth Arden…Henry Ford would have said the same!

Bloomberg Top Stories:

*BOE Won’t rush to Raise Interest Rates Even as Unemployment Drops to 7.1% – duh!

*Emerging-Market Stocks Climb on Chinese Rates as Pound, Natural Gas Rise

*Gross Heir Apparent El-Erian Resigns as Pimco Fight Record Redemptions – that’s what happens when you are the ‘bond king’ (sic)

*Billionaires See Even Greater Riches by Davos 2015 as Stocks Keep Rising – oh boy!

*Facebook’s Sandcberg Becomes One of American’s Youngest Female Billionaires – glad she made it…happy for anyone who does, but it’s HOW you use that wealth!!!

*Panoramic Slopes of Utah Beckon as U.S. Buyers shun costly Homes – hmmm

*Spain Said to Raise $13.6 Billion in Sale of 10-Year Bonds Through Banks

*Treasury’s Floating Rate Notes Debut as More Cash Chases Fewer Securities

*BlackBerry CEO Chen Fuels Rally Returning Focus to Business Clients – smart!

*Whistle-Blower Who Drove Coal Rally Heralds Shift in Columbia

*Most-Profitable Bank ICBC Led by Jiang Rising to Davos Peak From Coal Mine

*Madoff Haunts Yeshiva University Years Later With Rating Plunging to Junk – yet we idolized the’wolf’ of Wall Street…they are all..scum…especially Madoff!!!

*Winter Storm Moving to Atlantic Canada After Shutting Down U.S. Northeast

*Merkel Aid Says Obama Spying Curbs Fall Short, Damaging EU Relations

*Ukraine Protests Claim First Victims as Further Rally Is Planned for Kiev

*Ex-Deutsche Bank Executive Mulligan Recalls ‘Nighmare’ Run-In With Police

Tuesday’s Market Summary:

Freaky Tuesday!!! How often have you seen a day when the Dow goes one direction and the rest of the market the other? Once in a blue moon? How about TWICE in two days?

That is exactly what happened. The Dow, which ROSE 0.3% on Friday while all other indices were down…except Dow Utilities which were flat…declined  by 3% (tit for tat?), while the remainder were up…and by the same amount they lost on Friday, mas o menos.

Ah but Dow Utilities took honors rising 1.1%!!! The S&P 500 up a puny 0.3% and the rest up 0.6-0.7%! Rational? You decide…

Also perplexing is the S&P’s meager gains when Apple was the best performer on the Nasdaq 100…and advancers led losers by 1.5:1! Is this a market that waits to die?

More AAPL/MSFT: while APPL gained 8.5 index points of the 26.5 on the NDQ 100, MSFT was the biggest loser at -1.6 vs 3.8 index points. Remember: they combined for more than two-thirds the loss and on Wednesday (Thursday they were mixed and index barely budged) , half the gain on the index (16 of 29)!!! So think how much they subtracted and  added to the S&P? Again, this is why TB provides you with FIVE days of returns instead of focusing day to day. Think for yourself!…or suffer the consequences.

NYSE Volume still oscillating rising slightly to 3.75B shares vs 3.65B vs 3.46B shares (average) vs 3.75B (highest since 12/20) vs 3.33B. Real NYSE Volume declined but to a still above average 753M shares vs 893M (first time over 800M since 12/20! Remember it was a DOWN DAY!), vs a below average 654M vs 718M vs 650M vs 734M.  

The Nasdaq 100 gained 26.5 vs -20 vs +1.5 vs +29 vs +68 points!!! vs -52 points!!! Breadth was slightly positive at +1.2:1 vs -1.5:1 vs -1.4:1 vs +7:3 vs +9:1 vs -7:1!  Nine members gained more than one index point, while three lost more than a point! APPL +8.5 vs -11 vs -2.5 vs +8.8!!! vs +8.5!!! GILD +4.3; FB +3.7 vs -1.5; GOOG +3.2 vs -1.4 vs +1.9; AMZN +3 vs +1.6; BIIB +2.7; PCLN +1.3; QCOM/EBAY +1.1; MSFT -1.6 vs -3.8! vs +1 vs +7.3!!! vs +5.9! vs -7.8!!!; MDLZ -1.2; INTC -1.1 vs -3.

Dow 30 UP -0.3%? vs +0.3%? (see above!) vs -0.4% vs +0.7% vs +0.7% vs -1.1%!; Dow Transports +0.6% vs -0.4% vs -0.6% vs +0.6% vs +1.3% vs -1.4% vs +1.2% vs +1%; Russell 2000 +0.6% vs -0.4% vs +0.2% vs +0.7% vs +1.3% vs -1.4%; Dow Utilities +1.1%!!! vs flat vs +0.7% vs -0.1% vs +0.1% vs -0.9% vs +1.3%!?! S&P 500 +0.3%? vs -0.4%? vs -0.1% vs +0.5% vs +1.1% vs -1.3%; Nasdaq Composite +0.7% vs -0.5% vs +0.1% vs +0.8% vs +1.7%!!! vs -1.5%!; NDQ 100 -0.6% vs vs +0.8% vs +1.9%!!! vs -1.5%!

*NYSE Volume reverted again to 3.75B shares vs 3.65Bvs 3.46B vs 3.75B vs 3.33B vs 3.57B vs 3.33B. 2014 low is 2.76B. 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 slipped to a still strong 753M shares vs 893M (highest and first time above 800M since 12/20) vs 654M vs 700M vs 718M vs 650M. Now above 700M five times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is up to a still weak 622M shares with a new high of 893M! The 12 month is 720M shares. Last year there were just TEN 1B+ share sessions! There have now been 40 800M+ shares since 12/31/12: 18 up, 20 down, three mixed.

*New 52 week highs have ranged from 33-864. They surged to 498!?! vs 373 vs 419 vs 515 vs 281. Recent low is 201! Recent high is a super-strong 890!!! New lows slipped to 37 vs 40 vs 42 vs 37 vs 36 vs 50. Recent high is 353; low 20!!!  

Advance/Declineswere positive: +1.9x vs -1.4x vs +1.4x vs +1.9x vs +2.4x (recent range -17.5x to +6x) on NYSE and +1.6x vs -1.4x vs +1.0x vs +1.9x vs +3x! vs -2.6x(recent -4x!!! to +3.8x). Breadth was similar: +1.4x vs -1.9x vs -1.2x vs +2.3x vs +3.8x! vs -4.3x!!!(recent -18.6x!!! to +7.2x!!!) on NYSE and +1.7x vs -1.7x vs -1.2x vs +2.6x vs +4.1x!!! vs-3.1x! (recent -12.8xto +6.5x). 

NYSE Financials +0.1% vs -0.2% vs -0.6% vs +1% vs +0.7% vs -1%!. BofA 2nd most active flat vs -0.5% vs -0.4% vs +2.3%!!! vs +2%! vs -2%! $17.00 –  gapped up from $16.77-$17.15 last Wednesday with a high print of  high $17.42 – highest since 5/10/10!!! Brokers +0.9% vs -0.5% vs – vs +1% vs +1.1% vs -1.2%! KBW Banks +1.1% vs -0.3% vs -0.9% vs  +1.4%!!! vs +0.5% vs -1.3%!!!; Nasdaq Banks +1.8% vs +0.3% vs -0.8% vs +0.5% vs +0.5% vs -0.9%.

Volatility (S&P VIX) rose and the range broadened to 12.61-13.42 after falling to 11.81. It closed at 12.87 +.43. Last Wednesday closing 12.28 was near its lowest close and low since 8/5/13! From 13.31 with a high of 13.65 to 12.29 -.99 with a low of 11.96! It remains well below the 40/50 day (13.61/13.53) while the 200 day is 14.40. 12/26’s 11.69 was lowest since 3/15/13!!! Recent high on 1/2 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 were little changed and slightly weaker. Weaker again overnight: 30 yr 3.75 -1/16 – high 3.97% on 12/31; the 10 yr 2.85% -1/8, recent high 3.03%! Long TIP 1.42% -1/8. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.237% 3 mos,0.334%!!! 6 mos. BOTH at/near NEW record lows 0.236%!!! and 0.334% respectively!). NOTE that the Fed Funds rate has averaged 0.08% since 5/22/13 and is currently 0.07% while the Fed is paying 0.25% to the banks on their excess reserves!!! No wonder they won’t make loans! Foreign bond yields mixed: Germany 1.76% +3; UK 2.89% +6!!! – recent high 3.03%!; France 2.44% +3; Italy 3.81% -2; Spain 3.69% -4; Portugal 4.97% -5; Greece 7.98% +12!!!. Recent range 7.51%-12.57%. Japan: 0.67% -1. Yen slightly better at 104.48, recent range 103.59-105.44 last week, low since 10/1/08!!!

Gold rose again closing at $1241.80 -$10.10 and giving back Friday’s gains, It did take out the 1/16 recent high of $1258.00, highest since 12/11/13 – AND had an outside day and nearly a key reversal! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. Psych levels: $1200 sup; $1300 res, with major sup/res at the 40 day ($1232!) and the 50 day ($1241!). The 200 day is $1329. Overnight it is slightly lower in a narrow session at $1240.40 -$1.40.

Crude closed modestly higher again at $94.99 +.62. The high was $95.85, highest since 1/3/14. Last Thursday it fell to the lowest print since 5/2/13: $91.24! Note 12/27 was first time above $100 since 10/21! 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 still below the three key m/a’s which are all major res: 50 day m/a ($95.44!!!), 40 day (95.85!), crossed!!! and the 200 day ($98.93!!!) – 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 surged to $95.94, slightly above the 40 day and zipped past the 50 day. It is now $95.74 +.77!!!

Overnight markets:

Global equity markets higher: UK – vs +0.2% vs – vs +0.1% vs +0.7%; France +0.3% vs 0.4% vs – vs -0.1% vs +0.7%; Germany +0.2% vs 0.6% vs +0.1% vs -0.1% vs +1.4%!!!; Japan +0.2% vs +1% vs -0.1% vs -0.4% vs +2.5%! vs -3.1%!!! Hang Seng +0.2% vs +0.5% vs +0.6% vs 0.4% vs +0.5%; Korea +0.3% vs +0.5% vs -0.7% vs +0.2% vs +0.4%; India +0.4% vs +0.2% vs  -1%! vs -0.1% vs +1.2%! U.S. stock indices opening mixed: DOW -35!!! (contrarian again!); SPX +1; NDQ +3.5

Some random thoughts:

What is wrong with America. We were once a great democracy. We are now a country of haves and have nots, the latter category growing by the day. It disturbs TB that friends don’t see it that way. “I worked hard for what I have”, they say…yes, you did and you only got where you were because of the opportunity presented to you by this great nation.

Henry Ford understood it…and that he couldn’t take and take and let his employees get worse off. We are told there is a shortage of qualified workers. If so, why aren’t wages rising for these ‘difficult to fill’ jobs? Meanwhile, senior management, especially the CEO, continues to enrich itself…often at shareholder expense.

The right, and sadly many of my friends, believe that each person has an equal chance at an education…they don’t seem to be aware of the cost of that education…and for what? A job that after paying back student loans puts them where a high school grad would be?

Worse, we have college grads doing jobs that a high school grad – at best – could do. Some working several part-time jobs to get by. The highest percentage ever of 18-34 year olds living with their parents…do you really think they want to do that?

Then there are the entrepreneurs…including the infamous Koch brothers who give libertarianism a bad name. “I did it on my own “they say…no they did not…and many of them and many of our largest companies are not paying their fair share in taxes. This is especially true of the nouveau riche in the financial sector…many of whom if there was any justice would be in prison, their wealth stripped of them. Ah but they give to charity – yes, at those costly benefits and many for the arts or building a new wing at Harvard or Yale. Hospitals, having gone from non-profit to enriching the docs or whoever owns them, don’t get new wings built by philanthropists. Who would contribute to a for profit hospital??? Health insurance costs began to escalate when the insurers went from non-profit to for profit…and look what we have.

Every major industry has a lobby and they are very effective…they even work together on unrelated subjects in a ‘back-scratching’ effort to pour money ‘legally’ into politicians deep pockets. Ah, and thanks to SCOTUS they can give money anonymously to political pacs which are often run by friends of or former campaign officials of those running for office. Talk about a loaded deck…it’s even worse than the stock market which now makes Vegas look like a ‘deal’ because at least you know the odds, if you have the brains to study them. Still in the end, in all of the above, the house always wins…always!

A headline today struck TB as ironic and jaded: it seems that Warren Buffett and Cleveland Cavaliers owner Dan Gilbert have ‘teamed’ up, according to the Huffington Post, to give $1 billion…that’s right…BILLION to anyone who can perfectly pick all of the March Madness brackets. It is a very high odd proposition…but…so is winning any lottery! Oh, but they are going to give $1 million each to a charity. As the article said: get lucky and win $1 billion while $2 million goes to charity. What would an economist call that kind of charitable giving? Also, productivity plunges during March Madness as people are preoccupied with the games…most likely the higher paid ones!

Hey, its their money and they can do what they want…but isn’t about as obnoxious as Rockefeller handing out dimes to people in food lines…yes, but…it makes them feel good about themselves.

Then of course we have the Stephen Schwartman’s (“if they take away the carried interest provision, nobody will put up venture capital”), Lloyd Blankfein’s (“Im doing God’s work” – talk about taking his name in vain!), and other financial luminaries whose only care is to have more than the next guy and ultimately everyone else.

There are about 318 million people in the U.S. so the top 5% is about 16 million; 1% 3.2 million; the top 0.1% is 320,000 (there is actually an IRS category for this!). Let’s drill further: top 0.01% 32,000…still a lot of people…top .001% 3,200…top 0.001% or one one-thousandth of one-percent is 320 and that is about right. Yet according to the survey discussed yesterday just 85 people in the entire world control 46% of total global wealth!!! Hopefully, you can now see why the right so loves to talk about the top quintile. It is meaningless…even the top 1% is meaningless…yet tea partiers would strip those in need to give more to them. What about their subsidies? Tax advantages?

We used to believe – and it was true that anyone who worked hard could rise to the top. Do you believe that? Sure there are those who found Google, Yahoo, Ebay, Facebook, and now Twitter…and just what social good do their services provide? Do they enlighten us like Wikipedia tries to? Do they do as snopes.com or factcheck.org do and try to teach us the truth about politicians wild-eyed claims? No, they lower productivity just as the loudspeakers blaring stupid music did in Orwell’s 1984…an opiate like Marx saw religion.

Don’t accept anything you read here…challenge it…call TB a ‘bleeding heart liberal’ – which he isn’t, but for God’s sake don’t listen to the hyperbole who makes you believe the wealthy are being taxed to death…bullshit! But without serious tax reform soon, the middle class will cease go exist. To paraphrase Lee Iacocca: you can lead, follow, or get out of the way. Isn’t it sad that we believe big corporations can’t afford to pay their employees more…which basic economics says they will then consume more…or as Walmart says: our employees are our best customers. Then dammit…treat them that way!

Don’t know about you but that is off my chest and I feel better! At least not like a sheep!

TB

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