6/23/14…Dick Cheney: gravitas or hubris?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My parents threw a great going-away party for me. According to the letter.” – Emo Philips

Bloomberg Quote of the Day: “Be kind, for everyone you meet is fighting a hard battle.” – Plato – and some of them…those with wealth or political power are winning that battle! TB

US economic data in the past two weeks has been turning modestly positive. The trend in jobless claims improved modestly, suggesting a May NFP number close to its 12 month average of 198k. Regional manufacturing surveys were strong and indicate a positive bias for ISM Manufacturing this month. Retail sales improved modestly in May and indicate a stronger Q2 GDP, current estimates are for 3.5% qoq growth vs. our estimate of 3.65%.
Next week’s economic calendar is full of important indicators. The highlight of the week will be the May Durable Goods Orders and Q1 GDP 3rd Estimate (Wednesday) and May Personal Income (Thursday). We will also get May Existing Home Sales (Monday), April Case-Shiller Home Prices, June Consumer Confidence, June Richmond Fed Manufacturing and May New Home Sales (Tuesday) and June Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service.

Bloomberg Top Stories:
*Oracle Agrees to Buy Micros Systems for $5.3 Billion to Add Hotel Software
*Argentine Bonds Rally to Three-Year High as Solution Sought for Holdouts – cure the U.S.A.!
*Stocks in Europe Drop as Economy Weakens While Metals Gain on China Orders
*BNP Said to Be Approaching Settlement as Much as $9 Billion With U.S.
*Wisconsin Energy Agrees to Buy Integrys in $9.1 Billion With U.S.
*Most European Banks See No Need to Raise Extra Capital After ECB’s Decsion – of course not!
*Israeli Central Bank Decides to Leave Its Benchmark Interest Rate at 0.75%
*Hedge-Fund Hack Is Part of Broader Wall Street Siege Seen by Cyber-Experts – Heed!!!
*Pound at Highest Levels Since 2008 Attracts Funds Like No Other
*In Yellen We Trust Is Bond Market’s Mantra as Inflation Threats Dismissed
*ISIL Seizes Iraq-Jordan Border as Kerry Visits Baghdad for Talks on Unity
*De Blasio seek to upend 43-Year Admission System at NYC Selective Schools

Friday’s Market Summary:

An incredibly boring session…unless you were following gold! Not only did it close up $41 but it was the first time above $1300 since April 15th (you don’t think all those rich folks had to sell it to pay their tax bill do you?). Stock on the other hand were boring…oh wait, TB forgot Dow Utilities which tacked on another 1% gain which followed a 2% and is not up nearly 18% year to date! Whoopee!!! Bonds were crushed in the very long end losing more than Wednesday’s gains but 10’s only gave back little more than half, closing at 2.63%! Crude continues to bore after that one day surge on the Iraqi upheaval and has now given most of that back….in just one week!
As for the rest of the indices they ranged from +0.1% on the Dow, S&P, Russell 2000 and Transports to DOWN 0.1% on both Nasdaq indices…a perfect setup to today’s options expiry!!!

Total NYSE Volume was a strong 4.22B shares – but then it was options expiry! The highest recent volume was 3.17B at monthend, and May expiration of 3.18B shares…the average since has been about 2.9B shares! Real trades on the floor of the NYSE also rose to 1.72B – highest since 2B on 3/21 and an amazing 41% of the total!!! It has been running at 22% of the total with high frequency trading running as high as 24.6% of total which triggered the SEC investigation – finally!!! Before you get all excited though note that the volume just before the close was 970M with another 750M AT THE CLOSE!!! That, folks, is not retail buying!!! The 12-month average rose by 3k on the volume to 717M shares! But since 4/30 the average has been a pathetic 668M shares – boosted by 30M on Friday’s volume! and THAT was only due to 150M shares on the close!!! We are not only in the summer doldrums but retail buyers doldrums!

A/D’s were only slightly positive and continue to be DULL: NYSE +1.3x vs +1.3x vs +2.7x vs +1.6x vs 1:1; Nasdaq +1.3x vs -1.2x vs +1.7x vs +2.1x vs +1.2x. Breadth was similar: NYSE +1.1x vs +1.3x vs +4.3x!!! vs +2.2x vs +1.04x; Nasdaq +1.3x vs 1.3x vs 1:1 vs +2x vs +2.7x vs +1.5x. New 52 Week Highs rose again to a strong 469 vs 425 vs 328 vs 255 vs 251 vs 171 vs 186 vs 193 vs 256 vs 515 – recent low 71!!! New Lows tacked on a gain to 60 vs 42 vs 40 vs 38 vs 34 vs 36 vs 30 vs 25 vs 24 vs 25 – recent range is 24-214.
S&P VIX was little changed again at a bullish (overly???) 10.85 +.23 with ‘11’ just peeking out at the top of the range: 10.34-11.02 – a day after the high end was below 11 for the first time that TB can find…given the world conditions, unemployment, lack of pay increases…is this logical???

Overnight markets:

Bonds closed higher…in the long end while 10’s closed slightly bettere. 10 yr closed at 2.61% +1/8. 30 yr closed 3.44% +9/16! The long TIP, which hit a low of 0.978% on 5/29, closed 1.07%! +1-1/8!!! Overnight rally continues: 10’s 2.59% +1/8; 30’s 3.42% +1/4; and long TIP 1.06%! +7/16! 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: 0.233% 3 mos.; 0.325% 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 remains at 0.09% -0.10%. Foreign bond yields slightly lower across the board, again following US Treasuries: Germany 1.32% -2; UK 2.74% -2; France 1.78% -2; Italy 2.93% -1; Spain 2.71% –; Portugal 3.49% -1; Greece, which took out the old lows is now 5.87% –. The recent high on selloff was 6.75%. Highly volatile!!! Recent range is 5.42% to 12.57%. Japan: 0.57% -1.

Gold traded in a muted range a day after making a slight new high of $1321.00, highest since 4/15 when it plunged. It closed Friday at $1316.20 – its second straight close above$1300 since 4/14! Four days ago the high was $1285.10 – highest since 5/27 when it began its devastating plunge. 6/9’s $1240.20 was lowest since 1/31/14!!! It is now solidly above all three key moving averages which are very tight but seems to have lost momentum: 200 day $1289, then the 50 day $1285, and the 40 day $1281 – but key is the psychological $1300 level 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 it is slightly weaker at $1313.20 -$3.40 with a low of 1310.40 an ‘inside’ session. Validity of rally will be tested…soon!

Crude ran up to $107.73 barely taking out a week ago’s $107.69 – highest since 9/19/13 – and closed at $107.26 +.83– leaving just one close below $106 since rally began a week ago over Iraq – that is still highest since 9/19/13 – a huge down day. 6/5’s low of $101.60 was lowest since 5/16. 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 well above all three moving averages: 50 day ($102.84) then the 40 day ($102.69), and 200 day $100.12 – not 40/50 are both rising and converging! The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly weaker (new lead contract) at $106.75 -.07 – after a high of $107.45.

European equity markets weaker after three slightly higher sessions, Asia mixed, Hong Kong weak! UK -0.2% vs +0.3% vs +0.7% vs +0.3% vs +0.1%; France -0.3% vs – vs +1%! vs – vs +0.2%; Germany -0.3% vs – vs +0.9% vs +0.2% vs +0.3%; Japan +0.1% vs -0.1% vs +1.6%! vs +0.9% vs +0.3%; Hang Seng -1.7%!!! vs +0.1% vs -0.1% vs -0.1% vs -0.4%; Korea +0.4% vs -0.9% vs +0.1% vs -0.6% vs +0.4%; India -0.3% vs -0.4% vs -0.2% vs +1.3%! vs -0.2%; U.S. Stock Index Futures little changed again after an early run-up: DOW -8 (range 72!); SPX -0.30 (8); NDQ -3.75 (20).

Some random thoughts:

…if there is one thing TB cannot stand is a hypocrite and Dick Cheney is not only that but a revisionist. Thanks to the WSJ publishing an OpEd by him last week he has come to the fore. Nevermind that past presidents do not second-guess a current president, but Dick Cheney, draft dodger (arguably with more deferments than any man on the planet), and a man who faked an injury so he wouldn’t have to stand when Obama was sworn in.

Two stories yesterday ‘featured’ Cheney. The first was a commentary by him on Meet the Press, where the man’s ego could not accept that he was a hypocrite. He was being mocked…and with his own quotes from 2002, 2004, and 2008. As with most narcissists, he was blind to them and the reporter’s comments and by virtue of the prior comments contradicted himself repeatedly. Remember this is the man who the GOP wanted as VP to provide ‘gravitas’ to George W. Bush. Maybe you don’t recall Wag the Dog, the movie that depicted Bush as a puppet for Cheney…and perhaps woke him up to reality.

Three statements he made: Obama is at fault for not leaving troops in Iraq and now Afghanistan…yes, he did…and why, Dick??? Because neither nation would guarantee that our troops would not be subject to local law – something we have never and never can allow! Idiot! The second was labeling Rand Paul, an isolationist, which brought a sharp rebuttal from Paul. The third was that we must do more to stop the spread of Islamist terror…right, Dick…now that as a result of our actions there is an all-out religious war – not just Muslims vs Christians, but Sunni vs. Shia…this, not the Viet Nam style…is the real ‘domino theory.’

Both Tom Friedman and Fareed Zacharia have pointed to Bush’s statement after 9/11 as having scared the Muslims when he declared a ‘crusade’ against Muslims – a poor choice of words and one that served as a unifier, even though he later qualified the comment.

But we haven’t heard the last from Dick Cheney or his daughter, Liz, who following her failed run for the U.S. Senate (thankfully), has joined in forming a new superpac, Alliance for a Strong America, which not only should send shivers up your spine but will enrich both of them for running it…just like it did for Karl Rove (by the way the IRS scandal isn’t really one as their were perhaps 100 conservative pacs set up for each liberal one…so did the IRS target them, or simply try to get the facts behind them thanks to the partisan Supreme Court decision on Citiznes United that enable them). Don’t believe TB on any of the above? Fine…but you had better decide for yourself and be prepared for the continued escalation of problems in the Middle East that, WE, America brought on. Can you believe how Cheney’s adoring daughter, Liz, has been brainwashed into her beliefs?

The second story was on Bill Moyers & Company, an interview with Andrew J. Bacevich, Jr. a political science professor at Boston University who is a West Point grad, and a PhD from Princeton. and left the army after 33 years as a Colonel – nine of those years in Viet Nam!

Bacevich lays out the case for getting out of Iraq/Afghanistan and asks the question: have the lives lost and the billions spent produced positive results? If so, we should continue the effort, if not, we should get out…too bad he wasn’t around when we got into this mess. We are throwing good money after bad and and sacrificing more of our soldiers.

There is one other name that TB didn’t know and Bacevich brought up: Robert Kagan of the Brookings Institution who is the top neo-con and did most of the research that the rest of the GOP bought into. He was a major influence on Cheney and the other hawks.

The question is that with the string of mistakes made by these ‘brilliant’ people, why do we Americans continue to look to them? Bacevich asked the question along with this: why do the Sunday talk shows include the same people? The answer, Andrew, is simple: because it draws viewers…especially when there are shouting matches involved! Just in case you think Bacevich is an Obama fan, he rates his foreign policy mediocre at best.

Perhaps you like, admire, or believe Dick Cheney, but what he brings to the table is hubris not gravitas…something we cannot afford in the world today!

Go Team USA…so far making a very good showing in the World Cup! Went to see Clint Eastwood’s Jersey Boys yesterday…a really good film!!!



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