Quote of the Day from the Friars Club Encyclopedia of Jokes: “I’m now at the age that I have to prove that I am as good as I never was.” – Rex Harrison…so it TB!
TB’s laptop crashed so there will be no Bloomberg data today…especially overnight.
Thursday’s Market Summary:
Aha! Options expiry is just a week away…market is waking up to it as we shift from a dull and listless market towards weekness. Yesterday was a bloodbath (despite CNBC and others saying it wasn’t so bad given the weak reports out of China), with every index save one, losing at least 1.2%! The outlier? Dow Utilities which posted a 0.7% gain following a 1% gain, and remain the strongest sector year to date…is that supposed to happen in a ‘bull’ market?
But it gets worse: Volume surged to a well above average 3.65B shares up from 3.0B to 3.5B shares where it has languished for the past six sessions. Note for the six sessions culminating in Valentines Day, all but one session was up – with several more than 1% in all sectors, but since then it has been hard to get even an average (3.5B shares) day. Since then there has been just six above average sessions including monthend/quarterend and an options expiration. Real volume for yesterday unavailable at this time but up till then there have been just FOUR above average sessions since 2/14! If yesterday was above average, like the total volume it is a bad thing on a major down day!
Advance/Declines AND Breadth…stunk! Worse they have been virtually all negative for FIVE days: A/D: NYSE -2.0x/+1.4x/-2.1x/-1.3x/+1.3x, Nasdaq -3.3x/+1.3x/-2.7x/-1.2x/+1.1x; Breadth -5.2x!!!/+1.1x/-2.4x/-1.8x/+1.9x, and -3.4x!/+1.8x/-3.3x/-1.2x/-1.2x. New 52 Week Highs rose but to a still weak 164 vs 117 vs 251 vs 226 vs 382 vs 486 while New Lows continued their slow climb to 79 vs 63 vs 44 vs 35 vs 20 vs 16 (new low) – still weak!
Volatility which started a week ago Wednesday at 13.89 had been very quiet but surged 11.4% yesterday to 16.12 +.65 from 14.47 – and have resided in the low 14’s the entire week. Caution advised with options expiry coming next week.
Bonds closed strong: 10’s 2.65% +3/4; 30’s 3.56% +1-1/16; TIPS unavailable.
Gold closed at $1372.40 +$1.90 – not much but still strong. Crude remains very weak and barely closed to the upside at $98.20 +.21.
Overnight markets unavailable…sorry.
Some random thoughts:
Remember when Steve Schwarzman said that taxing carried interest was “like when Hitler invaded Poland in 1939″? Or when Lloyd Blankfein said he was doing “God’s work”? Apparently, titans of finance can’t stop themselves from giving good copy. The latest is in Max Abelson’s Bloomberg article in Bloomberg on Wall Street’s search for a Republican presidential candidate who will wave their flag: low individual taxes and a rollback of financial regulation. John Taft, U.S. CEO of RBC Wealth Management, “likened his fear for the country to ‘hiding under my desk during air-raid drills because of the Cuban missile crisis,’ when ‘literally the future of humanity hung in the balance,’” before beginning a suggestion, “If I were God.”
More seriously, the financial sector expects to be able to choose the next Republican presidential nominee. In the words of one political strategist, with Chris Christie on the rocks, ”The establishment is now looking for another favorite. . . . And by the establishment, I mean Wall Street.” At the moment, the big money is desperate enough to be looking at fringe candidates like Rand Paul, Ted Cruz, and Marco Rubio (although what they most long for is the third coming of Bush). Basically, there are huge piles of cash looking for a friendly political home, and the level of hysteria is likely to surpass what we saw in 2012. We should at least get some entertaining quotes out of it.
This is copied in entirety from today’s The Baseline Scenario and hopefully those of us who have benefited from this once-great financial sector will wake up…not scoff at Occupy Wall Street (even though it was poorly managed, who else even attempted to clean up Wall Street. Had TB’s name RCA: Reform Corporate American – and Congress, been the name and thus had a positive connotation, perhaps…but then again, this is the new America that believes in Ivan Boesky’s mot: greed is good! Screw the less fortunate, I did it my way…by getting tax breaks and ripping of the public and the government. Don’t you wonder how Jamie Dimon, or Steve Schwarzman, or Lloyd Blanfein (let alone Angelo Mozillo), can shave without slitting their throats for being unable to look themselves in a mirror? They must be very happy for electricity and shavers.
Next, from Dean Baker’s Weekly Columns, published yesterday:
Richard M. Daley served as mayor of Chicago for 22 years, from 1989-2011, surpassing the record for longevity set by his father. Shortly after ending his term as mayor, Daley became a director of the Coca Cola Company. He received $18,322 in compensation for his time as a director two months in 2011, and $178,461 for 2012.
During his tenure as mayor, Daley consistently failed to make the required contribution to the city’s pension funds. As a result, according to his successor Rahm Emanuel, the city is on the brink of bankruptcy. Emanuel is now calling for cuts to workers’ pensions, which average $33,000 a year for non-uniformed employees. (The vast majority of city workers do not get Social Security, so this pension would provide the bulk of their retirement income in most cases.)
Daley’s 2012 compensation for attending Coca-Cola board meetings would be more than the full-year pension for five retired Chicago workers. The amount that Coca-Cola shareholders, with Daley’s apparent approval, paid its CEO to run a company to under-perform the overall market is roughly equal to the pension of 900 retired Chicago workers.
In addition to under-funding city pensions, Daley also gained notoriety in his tenure as mayor for leasing out city assets, most notably signing a 75-year lease agreement with Morgan Stanley for the city’s parking meters. Daley used the $1.16 billion from this deal to cover city operating expenses.
Daley was also a major supporter of the school reform movement, including the increased use of charter schools. He put the school system directly under his control in 1995. He picked noted school reformer Paul Vallas to run the schools, and replaced him with current education secretary Arne Duncan in 2001, when Vallas resigned to run for governor. When Emanuel took over as mayor in 2011 he decried the state of the schools and insisted on the need for radical changes.