2/5/14…our irresponsible Congress

Quote of the Day from the Friars Club Encyclopedia of Jokes: “How many Russian leaders does it take to screw in a lightbulb? Nobody know. Russian leaders don’t last that long.” …OK, Putin, but that is not the Russia of old…

Bloomberg Quote of the Day: “Fast is fine, but accuracy is everything.” – Xenophon – was he a xenophobe?

Bloomberg Top Stories:

*Stocks in Europe Rise as Asia Equities Rebound (?); Bonds Advance

*Google Ends Three-Year EU Probe With Pledge to Show Rivals’ Search Results

*Deutsche Bank Said to Dismiss Three Currency Traders Amid Currency Probe

*U.K. Service Industry Unexpectedly Slows as Wet Weather Hampers Recovery

*EU Said to Weigh Extending Greek Bailout Loans to 50 YEARS at REDUCED Rate!!!

*Inverse VIX Fund Gets Record Cash as Options Traders Bet on Market Calm-carefull!

*Euro Bears Seek Redemption in Inflation Slowdown Draghi Frets

*Italian Bonds Advance With Spain’s on Speculation ECB Poised for Stimulus – !!!

*Europe’s Investment Bankers Mark Worst January in Decade as Fees Fall 22% – !!!

*Second Storm Brings More Snow to New York as Planes Grounded, Schools Shut

*Marijuana Decriminalization in U.S. Capitol Advances in City Council Vote

Tuesday’s Market Summary:

Ah, ‘twas yet another ‘dead gerbil’ bounce…pathetic as was the first one after the plunge. This time however volume was above average but below the selloff levels, and New 52 Week Highs plummeted from a low 91 to just 56! So did New Lows but they went from 216 to a still solid 120! Advance/Declines and Breadth were positive but a mere fraction of the negative ones on Monday! Here is the scoreboard:

 

Index

February

YTD

3 mos.

12 mos.

Returns

Mo. to date

2/4/14

1/31/14

1/31/2014

Dow 30

-1.6%

-6.8%

0.5%

12.1%

Transports

-2.1%

-3.6%

3.4%

24.5%

Dow Utilities

-1.4%

1.7%

0.3%

6.7%

S&P 500

-1.5%

-5.0%

1.2%

17.8%

Composite

-1.8%

-3.5%

4.6%

29.1%

NDQ 100

-1.5%

-3.4%

4.2%

27.4%

Russell 2k

-2.5%

-5.2%

3.2%

24.1%

NYSE Fin

-1.4%

-5.7%

-1.3%

11.3%

 KBW Banks

-1.7%

-4.5%

4.7%

23.0%

 NDQ Banks

-3.1%

-6.0%

3.3%

24.6%

New 52 week highs declined further to 91 vs 135 vs 162 vs 76 where it sat for three days, while new lows nearly doubled again to 216 vs 135 vs 70 vs 135! vs 71 vs 148. Volatility (VIX) surged by 16.5%! to 21.44 +3.03!!!, just .04 off the session high not seen since 6/24/13, and the highest close since 12/28/12!!! Troubling! Advance/Declines and Breadth were VERY negative: -5.6x/-6.1x and -16.2x!!!/-9.6x!!!. Ouch!!!  

Dow 30 +0.5% vs -2.1% vs -0.9% vs +0.7% vs -1.2%;Dow Transports +1.2% vs -3.2%!!! vs -0.2% vs +1.6%! vs -1.2%;Russell 2000 +0.8% vs -3.2% vs -0.3% vs +1.5%! vs -1.3%;Dow Utilities -0.5% vs -0.9% vs +0.8% vs +1.6%!!! vs -0.2%; S&P 500 +0.8% vs -2.3% vs -0.7% vs +1.1% vs -1%; Nasdaq Composite +0.9% vs -2.6% vs -0.7% vs +1.8%! vs -1.1%; NDQ 100 +0.9% vs -2.3% vs -0.5% vs +1.9% vs -1.1%.

*NYSE Volume slipped but to a still above average 4.04B shares vs 4.7B shares vs 4.04B vs 3.5B vs 3.95B vs 3.43B vs 3.99B vs 4.64B. The 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 again but to a still very high 837M shares vs 922M vs 952M(highest since 12/20) vs 655M vs 736M vs 622M (lowest since 1/3/14) vs 780M vs 919M. It has now been above 700M twelve times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is just 678M shares. The 12 month is 722M shares. Last year there were just TEN 1B+ share sessions! There have now been 44 800M+ shares since 12/31/12: 19 up, 23 down, three mixed.

*New 52 week highs have ranged from 33-864. Despite the ‘bounce’ they were nearly halved to a very weak 56 (a new recent low!) vs 91 vs 135 vs 162 vs 76 vs 75 vs 74 vs 81 vs 211 vs 440 vs 498. 56 is the NEW recent low eclipsing 201! Recent high is a super-strong 890!!! New lows also halved to 120 vs 216 vs 135 vs 70 vs 135 vs 71 vs 148 vs 110 vs 62 vs 46 vs 37. Recent high is 353; low 20!!!  

Advance/Declineswere positive…but: +2.1x vs -5.6x! vs -1.7x vs +3.2x vs -3.3x! (recent range -17.5x to +6x) on NYSE and +1.7x vs -6.1x!!! vs -2.3x vs +3x vs-3.2x!(recent low -6.1x!!! to +3.8x). Breadth was similar: +2.8x vs -16.2x!!! vs -2.5x vs +3.2x vs -3.5x(recent -18.6x!!! to +7.2x!!!) on NYSE and +2.2x vs -9.6x!!! vs -1.5x vs +4.9x!!! vs -2.6x (recent -12.8xto +6.5x). 

NYSE Financials +1.1% vs -2.5%! vs -0.7% vs +1.1% vs -1.2% vs +1.2%. BofA most active but unched at $16.35???: — vs -2.5x! vs -1.1% vs +1.5% vs -0.2%? vs +2.6%. The high print was $17.42 on 1/15/14 – highest since 5/10/10!!!Brokers +1.6% vs -3.6%!!! vs -1.4% vs +1.1% vs +1.4% vs -2.1%;KBW Banks +1.2% vs -2.7% vs -1.3% vs +1.1% vs -1.3%.Nasdaq Banks +1.3% vs -3.1%! vs -1.3% vs +1.1% vs -1.5%!

Volatility (S&P VIX) decclined sharply but from a huge 21.44 to a still very high 19.11 with a range of 18.44-20.07. Mondays high was the highest since 6/24/13, 21.48. Look at the 40/50 day (14.38/14.18) and the 200 day, 14.49!!! 12/26’s 11.69 was lowest since 3/15/13!!! The recent range is now11.83-21.48!!! It peaked at 22.79 on 12/28/12…the range since 12/31/12 is 11.05 (3/14) to 21.92 (6/24)!

Bonds closed weaker but holding most of their gains and near mid-Oct. levels, when the storm hit. Higher overnight: 30 yr 3.59% +3/16 – the high was 3.97% on 12/31; the 10 yr 2.62% +1/16, recent high 3.03%! Long TIP 1.32% +1/4. 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 just above NEW record lows 0.234%!!! and 0.332% respectively!). NOTE that the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.06%!!! Foreign bond yields lower across the board, led by Greece! Germany 1.62 -3; UK 2.66% -4 – recent high 3.03%!; France 2.20% -3; Italy 3.75% -3; Spain 3.72% -3; Portugal 4.95% -7; Greece 7.95%! -17!!! Recent range 7.51%-12.57%. Japan: 0.59% -1. Yen stronger again after trading to 101.18 overnight, now 101.21. Recent range 101.18-105.44-weakest since 10/1/08!!!

Gold closed lower at $1251.20 -$8.70 in an ‘inside’ session. Last Thursday’s session low was $1237.50, lowest since 1/23! Monday’s intraday high was $1280.10, highest since 11/18!!! 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 at the 40 day ($1236) and the 50 day ($1237). The 200 day is $1319 and major res. Overnight it is slightly higher at $1257.00 +$5.80.

Crude closed slightly lower, also with an ‘inside’ session at $97.19 +.66. Thursday’s intraday high was $98.59 – 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. Support is at the 40 day m/a (96.42), and the 50 day m/a ($96.09)! RES at the 200 day ($99.25!!!) –  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 higher at $97.97 +.78 – high $98.26.

Overnight markets:

Global equity markets mostly higher, ex Germany/Hong Kong: UK +0.3% vs-0.3% vs -0.2% vs -1.5%!!! vs -0.4%; France +0.1% vs – vs -0.1% vs -1.6%!!! vs -0.4%; Germany -0.2% vs -0.9% vs -0.1% vs -2%!!! vs -0.4%; Japan +1.2% vs -4.2%!!! vs -2%!!! vs -0.6% vs -2.5% vs +2.7%; Hang Seng -0.6% vs -2.9% vs closed vs -0.5% vs +0.8%; Korea +0.2% vs -1.7% vs -1.1% vs closed for 2 days vs +1.3%;India +0.2% vs – vs -1.5%! vs +0.2% vs -0.7%. U.S. stock futures lower in a tight range: DOW -19; SPX -3.50; NDQ -7.50.

 

 

Some random thoughts:

Why is confidence in our Congress so low? Because they deserve it. Yes, you say, but look at Obama! Sure but his is three times better than Congress! Not that that is anything to brag about but presidential approval ratings nearly always decline in the second term…as the did for Bush.

Besides their inability to act as adults and for the people, they play silly games to slowdown or stop any progress. Today, there is heavy speculation that the EU is ready for a second round of stimulus. Despite weak economic reports and a moribund economy that is unable to sustain growth of even 3%…and that is about half of a normal recovery, the Fed is ‘tapering’ the QE’s. Good luck, America! 

A friend sent an article which I checked out on snopes.com and found it shocking. When is Congress going to hold themselves to the same standards that apply to the Executive Branch or that we have to adhere to? By the way, Feinstein’s husband, Richard Blum, has benefitted many times in the past from their relationship which caused his business to grow. Since CBRichardEllis is not a publicly owned company it is not possible to know how much of it he controls. Here is a link to the story:

http://www.truthorfiction.com/rumors/b/Blum-Post-Office-Sale-061013.htm#.Ulls5Nvn-vE

Here is the letter TB wrote to the senator:

Senator, I have long been a supporter of yours but you have pushed the envelope too far this time. First, you and Rep. Rogers expressed total faith in what Gen. Clapper testified to even when it was obvious from his manner that he was lying (subsequently he recanted. That was strike one.

Strike two counts as two in my book! How could you have the audacity to let your husbands firm…he may not be sole owner but is a principal…be handed a gift like that and I don’t give a damn what the Senate rules are, IT IS A CONFLICT OF INTEREST…one that will make you wealthy. 

This is not the first time this has happened. From the time you were mayor, a lot of business…not saying that was a conflict…just that he benefited from your position as shown by the growth of the company.

This, Senator, is an outrage. Can you imagine what the Senate would say if President Obama did this. It would be illegal for anyone in the Executive Branch. Which brings me to another point: ethics in Congress are a sham! You can’t honestly wonder why confidence in our elected officials is so low!

I am appalled at this and amazed that I didn’t hear about it earlier. I am also disgusted that when I read it, I thought it was another libelous letter. I defended you. There is no defense for this or for so many actions by the Senate. When are you going to act like, and be treated like, other citizens and other branches of government that YOU set the rules for???

Your ex-supporter! 

It is incumbent on all of us to hold our elected officials to normal standards of integrity. Thus TB’s letter to the senator.

Have a great day!

TB 

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