2/6/14…it’s good to have friends in high places

Thought for the day: “History doesn’t repeat itself, but it rhymes.” – Mark Twain

TB’s Term for the Day: ‘Affluenza’ where wealthy parents coddle their children into a sense of irresponsibility. – AKA, the new ‘duopoly’ the haves and have-nots!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “We are in the process of buying a home. When you buy a home you deal with Realtors. Realtors are people who did not make it as used-car salesmen.” – Bob Newhart

Bloomberg Quote of the Day: “It’s not so important who starts the game but who finishes it.” – John Wooden…he finished pretty good!

Bloomberg Top Stories:

*Draghi Says ECB Will Take Decisive Action If Needed; Rates to Remain Low

*First-Time Jobless Claims in U.S. Decreased by 20,000 Last Week to 331,000

*S&P 500 Index Futures Climb (+3.50?)  as Euro Advances on ECB Decision

*Twitter Slumps With Easy Growth Stalling as CEO Costolo Addresses Slowdown – LOL

*GM Drops as Profit Misses Estimates on Asian Losses, Europe Restructuring

*Credit Suisse Misses Analysts’ Estimates as Bank Raises Provisions

*Credit Suisse Challenged by Rout in Emerging Markets, Chief Dougan Says

*Green Mountain Climbs While Twitter Declines – can coffee go to the moon?

*Dutch Bankers Swear to God as Public Trust in Lenders Slumps to Record Low – ugh!

*U.S. Said to Warn Russia-Bound Airlines of Toothpaste-Tube Bomb Materials

*Jihadist Threat Grows in Egypt as Investors Look to Al-Seesi for Stability

*Iran Signals It’s Open to Compromise in Dispute Over Arak Nuclear Reactor

*Wal-Mart Favorite Pryor Breaks With Obama to Oppose Minimum-Wage Increase – did you know: a 1% increase in WMT prices would cover the cost of higher wages?  

Wednesday’s Market Summary:

Question: what was the best performing index yesterday? The Dow…it was FLAT…ok -5 points but not measurable. The rest, led by Dow Transports and the Russell 2000 small cap – both off 0.8%, were don from 0.2% (S&P) to -0.5% (Dow Utilities and the Nasdaq Composite), Allright, the hurting NYSE Financials gained 0.1% but look at the broader sectors: NYSE Brokers -0.9%; KBW Banks -0.1%; Nasdaq Banks -0.4% – this can’t be good…can it? Volume was lower but 3.97B shares vs 4.04B and 4.7B? We would have killed for that kind of volume in December! Real NYSE Volume also slipped but to a respectable and above average 755M shares – first time in FOUR sessions that it has been below 800M…contrast to the last half of December at about 680M shares. New 52 Week Highs were steady at a WEAK 53 vs 56 vs 91 – which is also weak! New lows have been well above average and rose to 162 vs 120 vs 216.Advance/Declines and Breadth were slightly negative following a ‘weak’ positive! Volatility remains high at 19.86 +.75.Here is the scoreboard:

 

Index

February

YTD

3 mos.

12 mos.

Returns

Mo. to date

2/5/14

1/31/14

1/31/2014

Dow 30

-1.7%

-6.9%

0.5%

12.1%

Transports

-2.9%

-4.4%

3.4%

24.5%

Dow Utilities

-1.9%

1.2%

0.3%

6.7%

S&P 500

-1.7%

-5.2%

1.2%

17.8%

Composite

-2.3%

-4.0%

4.6%

29.1%

NDQ 100

-1.9%

-3.8%

4.2%

27.4%

Russell 2k

-3.3%

-6.0%

3.2%

24.1%

NYSE Fin

-1.4%

-5.6%

-1.3%

11.3%

 KBW Banks

-3.1%

-4.5%

4.7%

23.0%

 NDQ Banks

-2.2%

-6.3%

3.3%

24.6%

Detailed analysis:

Dow 30 – vs +0.5% vs -2.1% vs -0.9% vs +0.7% vs -1.2%;Dow Transports -0.8% vs +1.2% vs -3.2%!!! vs -0.2% vs +1.6%! vs -1.2%;Russell 2000 -0.8% vs +0.8% vs -3.2% vs -0.3% vs +1.5%! vs -1.3%;Dow Utilities -0.5% vs -0.5% vs -0.9% vs +0.8% vs +1.6%!!!S&P 500 -0.2% vs +0.8% vs -2.3% vs -0.7% vs +1.1% vs -1%; Nasdaq Composite -0.5% vs +0.9% vs -2.6% vs -0.7% vs +1.8%! vs -1.1%; NDQ 100 -0.4% vs +0.9% vs -2.3% vs -0.5% vs +1.9% vs -1.1%.

*NYSE Volume slipped but to a still well above average 3.97B shares vs 4.04B vs 4.7B shares vs 4.04B vs 3.5B vs 3.95B vs 3.43B. 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 above average 755M shares vs 837M vs 922M vs 952M (highest since 12/20) vs 655M vs 736M vs 622M (lowest since 1/3/14). It has been above 700M twelve times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is just 680M shares. The 12 month is 723M shares. Last year there were just TEN 1B+ share sessions! There have been 45 800M+ shares since 12/31/12: 19 up, 23 down, three mixed.

*New 52 week highs have ranged from 33-864. They were stable at a ‘very weak’ 53 (another new recent low!) vs 56 vs 91 vs 135 vs 162 vs 76 vs 75 vs 74 vs 81 vs 211 vs 440 vs 498. 53 is the NEW recent replacing 56 AND 201! Recent high is a super-strong 890!!! New lows rose slightly to 162 vs 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 slightly negative: -1.4x vs +2.1x vs -5.6x! vs -1.7x vs +3.2x vs -3.3x! (recent range -17.5x to +6x) on NYSE and -2.2x vs +1.7x vs -6.1x!!! vs -2.3x vs +3x vs-3.2x!(recent low -6.1x!!! to +3.8x). Breadth was similar: -1.4x vs +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 +2.2x vs -9.6x!!! vs -1.5x vs +4.9x!!! vs -2.6x (recent -12.8xto +6.5x). 

NYSE Financials +0.1% vs +1.1% vs -2.5%! vs -0.7% vs +1.1% vs -1.2% vs +1.2%. BofA most active: +0.5% vs  — vs -2.5x! vs -1.1% vs +1.5%. The high print was $17.42 on 1/15/14 – highest since 5/10/10!!!Brokers -0.9%! vs +1.6% vs -3.6%!!! vs -1.4% vs +1.1% vs +1.4% vs -2.1%;KBW Banks -0.1% vs +1.2% vs -2.7% vs -1.3% vs +1.1%.Nasdaq Banks -0.4% vs +1.3% vs -3.1%! vs -1.3% vs +1.1% vs -1.5%!

Volatility (S&P VIX) rose following Tuesday’s sharp drop from a huge 21.44 to a still very high 19.11, then came back to close yesterday at 19.86 +.75 with a high of 20.72! Mondays 21.48 was the highest since 6/24/13! Look at the 40/50 day (14.63/14.44 – crossed!) and the 200 day, 14.54. 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 for a second day but still holding much of their gains and near mid-Oct. levels, when the storm hit. Little changed overnight: 30 yr 3.65% -1/16 – the high was 3.97% on 12/31; the 10 yr 2.67% -1/16, recent high 3.03%! Long TIP 1.40% -1/16. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.237% 3 mos,0.333% 6 mos. BOTH just above NEW record lows 0.234%!!! and 0.332% respectively!). NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.06%!!! Foreign bond yields mixed with problem countries lower – again led by Greece!?! Germany 1.66 +2; UK 2.72% +3 – recent high 3.03%!; France 2.25% +3; Italy 3.75% -1; Spain 3.67% -5; Portugal 4.92% -4; Greece 7.62%! -20 AND nearing the recent low of7.51%??? High was 12.57%. Japan: 0.60% +1. Yen stable after trading to 101.18 Wednesday, now 101.46. Recent range 101.18-105.44-weakest since 10/1/08!!!

Gold closed slightly higher at $1256.9 +$5.70. 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 ($1237) and the 50 day ($1237) – LOCKED!!! The 200 day is $1318 and major res. Overnight it is slightly higher at $1262.30 +$5.40.

Crude closed slightly higher at $97.38 +.19. Last 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 ($96.13)! RES at the 200 day ($99.29!!!) –  major res and slowly rising! 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 $98.17 +.79 – high $98.50.

Overnight markets:

Global equity markets higher, ex-Japan: UK -0.9% vs +0.3% vs-0.3% vs -0.2% vs -1.5%!!! France +1% vs +0.1% vs – vs -0.1% vs -1.6%!!! Germany -0.9% vs -0.2% vs -0.9% vs -0.1% vs -2%!!! Japan -0.2% vs +1.2% vs -4.2%!!! vs -2%!!! vs -0.6%; Hang Seng +0.7% vs -0.6% vs -2.9% vs closed vs -0.5%; Korea +0.9% vs +0.2% vs -1.7% vs -1.1% vs closed; India +0.3% vs +0.2% vs – vs -1.5%! vs +0.2%. U.S. stock futures following suit albeit in a tight range: DOW +49; SPX +5.50; NDQ +14.

 

Some random thoughts:

(Began writing this and then found that this is a pretty old story, but then some interesting facts came out…that further challenge Clinton’s stand on the ‘revolving’ door. Everyone’s doing it…Congressmen, former cabinet members, staffers, you name it. As the old saying goes: ‘the only ‘ism’ for me: nepotism!’

Still can’t figure how that sweetheart deal for the contract to act as realtor on the sale of USPS buildings around the country went to Sen. Dianne Feinstein’s (D-CA) husbands firm Coldwell Banker Richard Ellis (CBG). It is worth more than a billion and Richard Blum (the hubby) is Chairman and has been a principle for 12 years! No question this is a great commercial real estate firm and was formed in a merger with Coldwell Banker, as they have done with many other entities. Incidentally, CBRE entered into an agreement with the federal government in 2009 to sell foreclosed government properties which then ‘led’ to this contract.

Thanks to Bloomberg, look who another director is: Laura d’Andrea Tyson. former Chair of the Council on Economic Advisors in the Clinton Administration, then Head of the Haas Business School at UC Berkeley, and then the London Business School…no problems with that, but…also a director of Morgan Stanley, where she earned $340k in 2012,  and a member of Obama’s Council on Jobs and Competitiveness. Note that Blum, an alumnus of the HaasBusinessSchool is a regent of the UC in 2000 and served as Chairman during the time of Tyson’s appointment.

While researching CBRE, TB ran across another director with ties to the Clinton Administration: Mickey Kantor. Sound familiar? He headed a trade delegation for Clinton to China which was blasted for having only companies that had contributed to Clinton’s campaign…don’t recall how that turned out.

Back to Blum who began his career in San Francisco at Sutro & Co. founded Richard C. Blum and Associates in 1975…he was a supporter to the assassinated Mayor Moscone who Dianne Feinstein succeeded…they were married in 1980 and his business has thrived since.

It isn’t that these are bad people…they are just playing the game like others. The problem is that it is further stretching a democratic country to a duopoly, and that is a very bad and dangerous thing.

 

As for the major holders of CBRE, number six is Blum Capital Partners with 4.54% of the company (GS is number 2 at 8.3%, and Valueact Holdings (?) holds 9.7% ). Jeffrey Ubben, founder of Valueact worked for Blum for five years before founding it.

Lastly, the insanity, selfishness, and greed of Congress rears its ugly head again:

Association with two Ecuadrian bankers convicted of embezzlement has landed Senator Robert Menendez, a Democrat, in hot water with the feds. Now, it turns out Florida Republican Congresswoman Ileana Ros-Lehtinen also acted as an advocate for the bankers and their families after receiving $20,000 in campaign donations. Josh Rogin reports in The Daily Beast

Just finished Alan S. Blinder’s After the Music Stopped…an incredible reference to what went wrong and how bullheaded the Tea Party is and still complaining about deficits while refusing to compromise and raise taxes…or even remove ‘pork’ subsidies. Don’t worry, he has plenty of criticism’s of Obama and the Dems…but they aren’t the ones who have slowed (sic) this recovery. They just weren’t focused or even bothered to explain the situation clearly to the American people.

Have a great day!

TB 

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