1/27/14..being a ‘dimon’ wouldn’t be so ‘rough’

TB says “Minnesota is the only place where there are more cars on the lakes in the winter than boats on the lakes in summer.” (there are more boats per capita in Minn-e-sot-ta  than any other state…a fact TB just learned!)

Quote of the Day from the Friars Club Encyclopedia of Jokes: “The best things in life are free. And the cheesiest things in life are free with a paid subscription to Sports Illustrated. – anon

Bloomberg Quote of the Day: “Be smarter than other people, just don’t tell them so.” – H. Jackson Brown, Jr.

Bloomberg Top Stories:

*Caterpillar 2014 Forecast Tops Estimates as Construction Industry Recovers – do tell!

*Stocks in Europe Fall With Emerging Markets a S&P 500 Index Futures Rise – yawn!

*China Trust Default Averted by Bailout After Concern Hurt (Sub?)merging Markets

*Top Currency Trades for 2014 Already in Disarray in Emerging-Market Zone – Yen?

*Noyer Says Emerging-Markets Turmoil Unlikely to Throw Off European Economy – ha!

*Wall Street’s Biggest Dealers See U.S. Debt Sales Falling to Six-Year Low –hey…GOP!

*Petrobras Default Risk Escalates on Halliburton Discontent – everyone hate them!

*Argentine Devaluation Spurs 30% Markup as Hardware Store Shuts – OMG!

*Wooden Car Takes Automakers Back to Future Seeking Eco-Friendly Efficiency – hey, maybe the Spruce Goose should come out of the Evergreen Aviation Museum!?!

*U.S. East Bracing for Another Arctic Blast as Snow Reaches Southeast Texas -15 here!

*Ukraine Faces State of Emergency Threat as Activists Seize Third Ministry – !!!

*Obama Plan to Use Executive Action on Pledges Triggers Lawmaker Criticism –action?

*Ukraine Violence Raises Stakes at Protest Camp as Opposition’s Sway Fades

Friday’s Market Summary:

Oh, what a day! …in fact, what a week!  Especially, Friday as Dow Transports, except Dow Transports, the strongest (?) sector this year, plunged 4.1%, followed by NYSE Financials -2.5% followed by the Russell 2000 small cap -2.4%! The rest were off 2%+, except the lowly Dow Utilities which came in best at ‘just’ down 1%!

All 20 Transports were down, while the S&P 500 had 27:1 falling, the Russell -13:1, and the Dow -9:1. It was a bloodbath – more so than the losses suggested.

Within Financials, Brokers fell 2.5%; KBW Banks -2.6%, and Nasdaq Banks -1.5%. BofA was most active falling 2.4% to the lowest since 1/13 and just two days after the highest level since 6/30/10; JPM fell also 2.4%; C -2.7%; GS -1.8%; MS -3.3% (and like JPM awarded its CEO a huge bonus); the hapless UBS -2.6%! Even the ‘clean’ WFC fell 2.9%. Note that all of the major banks except UBS (faux bank) had record highs with the last week! (More on JPM below and on banks in general tomorrow).

Note that yesterday morning the stock market open mixed and little changed – except the Dow which quickly went to down 60…oh and Dow Transports which rallied all session!

TB contends there has never been a week (albeit holiday shortened, like this one), where the Dow had a mind of its own and yesterday imparted its mind on the others indices…except the aforementioned Transports which took ‘honors’ by gaining 0.3%! There no other ‘winners’ with the Dow the goat falling 1.1% (176 points…at the low down 213 points!), and the S&P 500 and Russell 2000 not far behind at -0.9%! The two Nasdaqs were off 0.5-0.6%, and the lowly Dow Utilities had just a 0.2% loss! Income producers and bonds were the winners…along with GOLD!!! You had also better be concerned with the pounding as NYSE Financials not only plunged 1.4% but each sector was trashed: Brokers -1.4%; KBW Banks -1.6%, and even NDQ Banks -1.2%!!!

Going to cut out all the ‘stuff’ on the NDQ 100 which should be obvious based on the above paragraph, no? NYSE Volume soared to very close to the record with 4.64B shares! Meanwhile REAL NYSE Volume rose to 919M!!! – very strong and highest since 12/20’s 1B+ share day! Still the 12-month average is a weak 721M shares but Friday was a down day…one you don’t want high volume on! Advance/Declines and Breadth were shameful while Volatility exploded by 31.7%!!! to 18.14 after ‘gapping up’ on the open to 18.14 – right where it closed: +4.37!!!

Dow 30 -2%!!! vs -1.1!% vs -0.3% vs -0.3% vs +0.3%; Dow Transports -4.1%!!! vs +0.3% vs +1.4%! vs +0.6% vs -0.4%; Russell 2000 -2.4% vs -0.9% vs +0.5% vs +0.6% vs -0.4%; Dow Utilities -1% vs0.2% vs +0.1% vs +1.1%!!! vs flat; S&P 500 -2.1% vs -0.9% vs +0.1% vs +0.3% vs -0.4%; Nasdaq Composite -2.2%!!! vs -0.6% vs +0.4% vs +0.7% vs -0.5%; NDQ 100 -2%!!! vs -0.5% vs +0.3% vs -0.6% vs .

*NYSE Volume exploded to 4.64B shares vs 3.98B vs 3.37B vs 3.75B vs 3.65B. 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 also balloned to 919M shares vs 771M vs last Friday’s 893M (highest and first time above 800M since 12/20), all were major DOWN SESSIONS. Now above 700M just seven times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is up to a still weak 643M shares, but rising, with a new high of 919M! The 12 month is 721M shares. Last year there were just TEN 1B+ share sessions! There have been 41 800M+ shares since 12/31/12: 18 up, 21 down, three mixed.

*New 52 week highs have ranged from 33-864. They plummeted to 81 vs 211 vs 440 vs 498 vs 373 vs 419 vs 515 vs 281. A new recent low eclipsing 201! Recent high is a super-strong 890!!! New lows nearly doubled to 110!!! vs 62 vs 46 vs 37 vs 40 vs 42 vs 37 vs 36 vs 50. Recent high is 353; low 20!!!  

Advance/Declineswere extremely negative: -6.3x! vs -2x vs +1.8x vs +1.9x vs -1.4x (recent range -17.5x to +6x) on NYSE and -4.6x vs-2.2x vs +1.4x vs +1.6x vs -1.4x vs +1.0x (new recent low -4.6x!!! to +3.8x). Breadth was disastrous: -13x!!! vs -3.2x vs +1.4x vs +1.4x vs -1.9x (recent -18.6x!!! to +7.2x!!!) on NYSE and -4.6x!!! vs -2.3x vs +1.7x vs +1.7x vs -1.7x (recent -12.8xto +6.5x). 

NYSE Financials -2.5%! vs -1.4%!!! vs +0.1% vs +0.1% vs -0.2%. BofA most active again -2.4%!!! vs -1.7%!!! vs +0.8% vs flat vs -0.5%. Closed $16.45 -.41. The record  high print was $17.42 on 1/15/14 – highest since 5/10/10!!!Brokers -2.4%!!! vs -1.4%!!! vs +0.3% vs +0.9% vs -0.5%; KBW Banks -2.6%!!! vs -1.6%!!! vs +0.4% vs +1.1% vs -0.3%; Nasdaq Banks -1.5%!!! vs -1.2%!!! vs +0.6% vs +1.8% vs +0.3%.

Volatility (S&P VIX) SURGED to 18.14 closing righ there for an increase of 4.37 or 31.7%!!!  Thursday it closed 13.86 +1.43, a 7.4% increase!!! This after falling to 11.81 last a week ago. 8/15’s close of 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 is back above the 40/50 day (13.59/13.43) while the 200 day is 14.37. 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 rallied but not as much as one might expect still with yields back down to lowest since Oct/Nov. Weaker overnight: 30 yr 3.66%! -1/2 – high 3.97% on 12/31; the 10 yr 2.75%!!! -5/16, recent high 3.03%! Long TIP 1.36% -7/16. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.236% 3 mos,0.333%!!! 6 mos. BOTH at or near NEW record lows 0.234%!!! and now 0.333% respectively!). NOTE that the Fed Funds rate has averaged 0.08% since 5/22/13 and is currently 0.06%,…while the Fed is paying 0.25% to the banks on their excess reserves!!! No wonder they won’t make loans! Would you??? Foreign bond yields mixed: Germany 1.67% +2; UK 2.79% +2 – recent high 3.03%!; France 2.37% -1; Italy 3.89% -2 Spain 3.75% -4; Portugal 5.14%!!! -10!!!; Greece 8.38%!!! UP another 17!!! Recent range 7.51%-12.57%. Japan: 0.63%!!! +1. Yen slightly weaker after rallying for a third straight day to 102.36 – with a session high of 101.77!!!. It is now 102.76. Back from the brink!!! Recent range now 101.77-105.44 last week, low since 10/1/08!!!

Gold rose intraday to $1273.20, highest since 11/20!!! before settling at $1264.50 +$2. 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 major support now at the 40 day ($1233) and the 50 day ($1240). The 200 day is $1325 and major res. Overnight it is slightly weaker in an ‘inside session’ at $1259.60 $5.20, but a high $1280.10 – the highest since 11/18!

Crude closed lower at $96.64 -.68. Thursday’s high was $97.84, highest since 1/2/14. 1/14’s low was worst 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 remains well above the 40/50 day m/a’s which are now major sup: 50 day m/a ($95.58!!!), 40 day (96.01!), crossed!!! and the 200 day ($98.98!!!) –  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 in a narrow range at $96.99 +.34 – wake me when it takes out the 200 day!

Overnight markets:

European equity markets mixed, Asia weak: UK-1.3%! vs-0.9% vs -0.1% vs – vs +0.2%; France +0.2% vs -1.5% vs – vs +0.3% vs 0.4% Germany – vs -1.2% vs -0.2% vs +0.2% vs 0.6%; Japan -2.5%!!! vs -1.9%! vs -0.8% vs +0.2% vs +1%; Hang Seng -2.1%!!! vs -1.3% vs -1.5%!!! vs +0.2% vs +0.2%; Korea -1.6%! vs -0.4% vs -1.2%! vs +0.3% vs +0.5%; India-2%!!! vs -1.1%! vs +0.2% vs +0.4% vs +0.2% vs  -1%! U.S. stock futures higher overnight, market is opening higher EXCEPT the Nasdaq’s: DOW +49;SPX +5; NDQ +4. At best, TB expects a ‘dead cat bounce’ so far not even close!

 

Some random thoughts:

Recent headlines:

*JPMorgan Seen Paying Dimon $34 Million Options Delayed by Whale – cover story?

*JPMorgan’s Dimon, Ex-Ally Settle Hiring Dispute – per WSJ

*JPMorgan Chase CEO to Get Pay Raise After Federal Fines – not his fault!

*Dimon’s Total Compensation $20 Million (74% increase!!!) – his only mistake was in not losing more, right??? After all, MS Chairman and CEO (doesn’t having both of those titles, as with Dimon give you pause? It sure as hell does for TB…oversight? None!

Let’s compare and contrast: Bernie Madoff cost investors $20 billion…and JPM was fined for not doing their due diligence on trust clients funds that were put with him! Madoff’s scheme cost investors $17 billion, while under Dimon’s direction to take on more risk (a la Robert Rubin who also didn’t pay a price), cost the bank, er shareholders, $20 BILLION! A WSJ Moneybeat article shows the trail of Dimon’s ‘total’ compensation (includes grants of restricted stock), and stock price…you decide:

 

YEAR

Dimon $ (Approx) % Change Stock PX % Change

2005

na

na

 $  39.69  

2006

 $          39,000,000

0%

 $  48.30

21.7%

2007

 $          34,000,000

-13%

 $  43.65

-9.6%

2008

 $          20,000,000

-41%

 $  31.53

-27.8%

2009

 $            1,500,000

-93%

 $  41.67

32.2%

2010

 $          20,000,000

1333%

 $  42.42

1.8%

2011

 $          23,000,000

-15%

 $  33.25

-21.6%

2012

 $          11,000,000

52%

 $  43.97

32.2%

2013

 $          20,000,000

182%

 $  58.48

33.0%

TOTAL

 $         168,500,000

na

 $    343  

AVE

 $          21,062,500

na

 $      43  

Annualized

     

7.7%

to 1/24/14:

     $  55.09

4.2%

Note that the record high was on 1/15/14 – seven trading days ago (most other bank stocks also peaked around the same time. But last week did a number on stocks – especially financials, so let’s see how Mr. Dimon fared…and ask why the board is allowed to remain in place (especially after they had a heated discussion over whether to pay him any bonus…so they compromised by giving him the high number! Interestingly, a few years ago CFO’s were asked to determine the value of stock options: the results ranged from ZERO to 100% (apparently they know nothing of the Black-Scholes model.

They too compromised…ZERO…or more accurately were compromised! Note that a side effect of bonuses of this magnitude is they siphon off money from investments to do  stock buybacks (which are historically ill-timed), and omit dividends…which for the banks the average is 2.2% (JPM 2.6%, so Jamie earns even on his restricted stock…is this a great county or what???).

(To the song The Man Who Shot Liberty Valence)

When Jamie Dimon came to town the womenfolk would hide, they’d hide 

When Jamie Dimon walked in the board would step aside
’cause a bonus and stock were the only law that Jamie understood
When it came to conning he was fast– and-he was mighty good.

From out of the East a stranger came, a law book in his hand, a man
The kind of a man the West would need to tame a troubled land
’cause the threat of a trialt was the only law that Liberty understood
When it came to scamin’ straight and fast—he was mighty good.

Many a man would face his wrath and many a man would fall
The man who tries Jamie Dimon, who tries Jamie Dimon
He’ll be the bravest of them all.

The love of a buck can make a man stay on when he should go, stay on
Just tryin’ to build a happy life where his wealth is free to grow
But going to trial was the only law that Jamie understood
When the final showdown comes at last, a law book is no good.

Alone and afraid she prayed that he’d return that fateful night, aww that night
When nothin’ she said could keep her man from goin’ out to fight
From the moment a girl gets to be full-grown the very first thing she learns
When two men face each other in court only one retur-r-r-ns

Everyone heard two charges made, the ones that might make Jamie fall
The man who tries Jamie Dimon, who tries Jamie Dimon

He’ll be the bravest of them all. 


The men in Congress, had that right, but they were afraid…afraid,

To do a thing to the man who inspired the Whale to lose

But the men in D.C. who had the power, the power of right over wrong,

They failed, they failed to do a thing to him or the bank he ran,

because they were afraid, they were very afraid.

 

If they took him to court, he might get mad, run ‘em out of office, quick as a wink,

But if they sat and did nothing the money would pour in

So not indicting Jamie Dimon…was that a mortal sin?

Or was staying in office the greater good?…the greater good,

So they would do the things to stay in office, that was mighty good.

 

The other big bankers loved Jamie Dimon, they loved

Because not only was he too big to fail

He was too big to fine or ja-a-ail

Of course this is just satirical…not a reflection on Mr. Dimon, merely some fun in a world

that is becoming too jaded to be funny.

As for the movie, black and white but with an all-star cast including Jimmie Stewart as TMWSLV, and became a hero going on to Congress (hey, wasn’t he also in Mr. Smith Goes to Washington?), John Wayne as Liberty Valence in a story that is a flashback. Other notables were an aging Andy Devine, Vera Miles, Jeanette Nolan, Edmund O’Broam, Denver Pyle, plus Strother Martin and a young Lee Van Cleef (who had no lines), were Liberty’s gang. Also a black actor named Woody Strode. Ford, always a bully, antagonized everyone and caused claims that Wayne was racist, which Strode denied and blamed Ford’s treatment of Wayne for the trouble, adding, “What a miserable film to make”

Ah, but a great film to watch…think I will do that…one more time, as the saying goes…

Stay light my friends…stay light,

Is TB the most interesting man in the world? We think not…but kind of fun…sometimes

TB

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