6/5/14…potpourri

Quote of the Day from the Friars Club Encyclopedia of Jokes: “A guilty conscience is the mother of invention.” – Carolyn Wells

Bloomberg Quote of the Day: “People many hear your words, but they feel your attitude.” – John C. Maxwell

Bloomberg Top Stories:

*Draghi Takes ECB Deposit Rate Negative in Historic Policy Move – think negative Fed Funds!
*Fewest Americans Filed Jobless Claims Over Past Month Since 2007 – who’s left to let go???
*Jamie Dimon’s Raise Comes Back to Haunt BNP Paribas in U.S. Sanctions Case
*Sprint Nears Deal to buy T-Mobile US, Valuing Carrier at About $31 Billion
*Deutsche Bank Prices Shares at 24% Discount in Biggest Offering Since 2010 – HUGE discount
*Carney Finds Ally in Draghi as BOE Keeps Key Interest Rate at Record Low
*Draghi-Yellen Split Widening to Revive Market Volatility, Banks Hypnotized – oops!
*Hollande Says $10 Billion BNP Fine Would Undermine European Bank Stability – TBTF – WTF?
*Amazon Said to Be Ready to Debut Smartphone to Compete With Apple, Samsung – hmmmm?
*Alfa Bets Pacific Rubiales Stakes Brings ‘Oilman’ Stats in Mexico – viva!
*Hollandes’ Dinner Plans Tonight Include Putin, Obama and BNP – some hand!
*Taliban Swap Reflects Obama’s Drive to Close Guantanamo Prison – but at what cost???
*G-7 Spares Russia New Sanctions Urging Diplomacy to Resolve Ukraine Crisis
*College Graduates in U.S. Struggle to Find Jobs That Are Worth a Degree – 50% won’t!
*Irish Catholic Orphanage Buried 796 Children in Mass Grave Over 35 Years – a cardinal sin!

Wednesday’s Market Summary:

A dull up day punctuated only by the release of the Beige Book for the next FOMC meeting…nothing to see there except indications of enough strength to perhaps persuade them to reduce the taper again. Most indices barely budged (flat to +0.2%) but Russell 2000 was +0.5% followed by the two Nasdaqs+0.4%…zzzzz.

Total NYSE Volume was about even at a weak 2.78B shares vs 2.83B vs 2.5B vs 3.7B vs 2.68B vs 2.92B vs 2.89B vs 2.4B vs 2.74B! …WEAK!! Real trades on the floor of the NYSE however took another header to a very weak 592M shares from an already weak 657M vs 549M vs 916M vs 544M vs 636M vs 657M vs 554M vs 577M! The 12-month average has slipped again to an historically weak 718M shares!!!!
A/D’s were slightly positive – they have been meaningless for days: NYSE +1.1x vs -1.6x vs -1.1x vs +1.1x vs +2x; Nasdaq +1.2x vs -1.6x vs -1.6x vs -1.6x vs +1.4x. Breadth was a tad better: NYSE +1.3x vs -1.1x vs +1.1x vs -1.1x vs +2.6x; Nasdaq +1.7x vs -1.1x vs -1.2x vs -1.4x vs +2.1x vs +4.3x! New 52 Week Highs a little higher at 262 vs 225 vs 318 vs 271 vs 287 vs 229 vs 336 vs 167 – recent low 71!!! New Lows steady at 96 vs 93 vs 57 vs 60 vs 45 vs 61 vs 50 – recent range 45-214.
Watch volatility closely…S&P VIX remains bullish but climbed modestly for a 3rd day to 12.08 +.21 – first close above ‘12’ in NINE sessions while the range of 11.91-12.33 was tight but the important thing was that the high was 12.33 – 3rd ‘12’ print in 8 sessions!

Overnight markets:

Bonds closed about even after taking that big hit Tuesday: 10 yr closed at 2.60% –. 30 yr closed 3.44% –. The long TIP, which hit a low of 0.978% on 5/29, closed 1.15% –, that’s 3-1/2 points in two sessions!!! Overnight slightly better: 10’s 2.59% +3/32; 30’s 3.44% +1/16; and long TIP 1.15% +1/16. Cycle highs: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.
Libor update: 0.231% 3 mos.; 0.322% 6 mos., both remain just off their record lows, set recently: 0.227% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond yields lower across the board: Germany 1.42% -1; UK 2.67% -2; France 1.82% -2; Italy 2.96% -6!; Spain 2.84% -4; Portugal 3.60% -5; Greece, which bottomed at 5.83% on 2/24 is now 6.18% vs 6.33! -9 o/n! – the high on selloff was 6.75%. Highly volatile!!! Range is 5.77% to 12.57%. Japan: 0.61% –.

Gold closed essentially unchanged for a second day – but a 6th day of decline on an inside session – at $1244.30 -.20. Tuesday’s $1240.20 was lowest since 1/31/14!!! Off $35 last month! This, after hitting $1304.10 on 5/22 – the last time it saw $1300! It is way below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1288, then the 50 day $1289, and the 200 day $1296 – note convergence and thus formidable resistance! It has fared poorly since the ‘key reversal’ on 3/17, after printing the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight another ‘inside’ session and currently $1246.20 +$1.80.

Crude also closed essentially flat after making a charge to $103.69 before succumbing at $102.64 -.02, following Monday’s low of $102.10, lowest since 5/20. Friday’s high was $104.50 – still highest since being slammed on 4/22! 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! 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 remains above all three moving averages but very close to first support at the 40 day ($102.17) then the 50 day ($101.91), and 200 day $100.20. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is a little lower at $102.37 -.27.

European equity markets higher, Asia mixed: UK +0.1% vs -0.3% vs -0.6% vs -0.1% vs +0.3%; France +0.6% vs -0.1% vs -0.3% vs – vs -0.4%; Germany +0.3% vs -0.2% vs -0.5% vs +0.2% vs –; Japan +0.1% vs +0.2% vs +0.7% vs +2.1%!!! vs -0.3%; Hang Seng -0.2% vs -0.6% vs +0.9% vs closed vs +0.3%; Korea -0.7% vs closed vs +0.3% vs +0.4% vs -0.9%%; India +0.9% vs -0.2% vs +0.7% vs +1.9%!!! vs -0.1% vs -1.3%! U.S. Stock Index Futures slightly higher in another narrow range session: DOW +27 (range 43); SPX +1.60 (5); NDQ +3 (11).
Some random thoughts:

…you go to potpourri when there is nothing else significant to say, thus allowing you (the writer) not to dwell on the inane…and you (the reader) to be spared the noise.

First, TB’s bet is that Obama will beg them to refocus on Benghazi after the outrage that was just completed and we now know that in 2012 Hillary Clinton was opposed to the deal. We also learned that yes, at that point they did negotiate with the Taliban…despite protests they didn’t. This leaves Hagel (the Vet), Kerry (the Vet turned anti-war), and Rice (the Sunday speaker), left to defend the deal. Where is Biden…”I know ‘nussing’ “ if he is smart! But then supposing that Bergdahl is in fact a deserter (to do otherwise means you have to disregard the statements of at least three of his former buddies…), and what to do about the six soldiers who died trying to find him??? Some would say he has already suffered enough…what will the families of those soldiers say?

Next item, the $10 billion ‘excessive’ fine to BNP…French President Hollande is upset saying they are being penalized more than U.S. banks…they have a point but only because a) they didn’t cooperate, and b) theirs isn’t excessive…the U.S. banks just weren’t fined enough. As a Bloomberg story today says: if you can’t pay the fine, don’t commit the crime! It goes on to cite an U.S. prosecutor who was outraged after JPMorgan was fined $1.7 billion (one of the more than 300 times since the crisis…without admitting guilt naturally), for ‘enabling’ Madoff’s Ponzi scheme, that the bank gave Jamie Dimon a 74% pay increase! Damn right, he is mad…he would be a fool if he wasn’t – like his boss, Eric Holder! No one…no ONE has either stopped to think how much these banks made of schemes from fixing Libor to foreclosure fraud…and if you can’t make the punishment fit the crime – by exceeding the profit made it is just a cost of doing business and thus no one is accountable and Mr. Dimon can continue to earn as if he were a guru (wait…guru’s don’t make money…they answer to a higher power…true guru’s that is, not financial ones!)

Lastly, since when do nuns…especially Irish nuns operating a home for unwed mothers hide the bodies of 800 children – in a septic tank no less??? How disgusting…what kind of people…who do they think they are? Rapist/murderers in India?

Have a great day…don’t expect markets to offer excitement!

TB

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5 Comments »

  1. Yarnman said

    TB–What if the “deserter” was a PTSD victim? Is there any evidence yet that the Taliban used him to make anti-US statements? So far, he appears to have been useless as a “prisoner.” And, don’t you think that the Commander in Chief of the US armed forces has the right to get back one of his troops? Obama apparently thinks so. If we fail to show that we will go to every length to get back a soldier, then we won’t have any more poor mugs fighting on our behalf while we’re safely at home complaining about the stock market. Hold your fire, TB!–Yarnman

    • traderbill said

      My concern, Yarnman, is that in 2-1/2 years they hadn’t examined readily available information, were caught lying about negotiating with terrorists (which I think is an overconcern when the Taliban used to run Afghanistan). PTSD occurred to me also…but not to those who were with him. I do share his concerns about whether we should have been there. But I am also concerned about the loss of six soldiers trying to rescue a man who of his own will (possibly under stress), who walked of the base and said he wasn’t coming back. Lastly, the Intelligence committees were briefed two years ago but apparently not updated since…was it truly urgent? Time will tell.
      Good thinking as always, Yarnman…keep TB honest!

      • Yarnman said

        TB–

        I think you and I are more in agreement than disagreement on this issue of the prisoner exchange. David Brooks, a “moderate Republican” op-ed writer at the NY Times, expressed in today’s issue of the paper his take, neatly summed up in his last paragraph of “Obama Was Right,” as follows:

        “Still, the president’s instincts were right. His sense of responsibility for a fellow countryman was correct. It’s not about one person; it’s about the principle of all-for-one-and-one-for-all, which is the basis of citizenship.”

        (Sorry not to have a quick link for you.)

        I’m an old infantry gravel-cruncher dating back to the Korean War, and Brooks’ opinion resonated with me. As a Navy veteran, I think you’d also like the Brooks article today.

        –Yarnman

      • traderbill said

        Thanks, Yarnman…listened to Brooks and Shields the other night and they both agreed on the exchange. Sounds like the real problem is our inability to strike a bargain. Letting them pick the released prisoners was not in our best interest and if they end up back in the fray, it won’t be pretty. This is a very difficult topic for me to deal with…especially with the GOP using for political purposes. Still the number of Dems opposed is an issue…and what a time for this…with mid-term elections nearing…

      • traderbill said

        Haven’t heard from you for awhile, Yarnman…hope all is well…think you might like today’s column…
        TB

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