7/15/14…$7B is chumpchange…$6k for All-Star Game tickets? WAKE UP!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I base my fashion taste on what doesn’t itch.“ – Gilda Radner

Bloomberg Quote of the Day: “The test of good manners is to be patient with the bad ones.”
– Solomon Ibn Gabirol

Bloomberg Top Stories:
*Goldman Sachs Posts Surprise Profit Increase on Trading Revenue, Deal Fees (see comments)
*Retail Sales in U.S. Showed Broad-Based Increase Last Month After May Gain
*U.S. Stock Futures Advance After Retail Sales Report (sort of!), as Pound Strengthens
*JPMorgan Profit Tops Analysts’ Forecasts on Better-Than-Estimated Earnings (see comments)
*Reynolds to Buy Lorillard for $27.4 Billion as U.S. Tobacco Market Shrinks
*Pound Risks 10% Drop on Scotland Breakaway From U.K., Morgan Stanley Says
*Banks Lending Quickens as Citigroup Sees Widespread Growth – from the wealthy???
*Inequality Piketty Fails to Examine Begins in U.S. Womb With Human Capital – Hamptons?
*Israel Orders Resumption of Offensive After Hamas Rockets Defy Cease-Fire
*Bomb at Crowded Market Kills 90 in Deadliest Afghanistan Attack This Year
*U.S. Accuses Russia of Stirring Ukraine Conflict as Peace Talks Struggle
*’Ready for Hillary’ Super-PAC Boosts Contributions 47% in 2nd Qtr (better than Rove or Koch’s)

Monday’s Market Summary:

An ‘up’ day…but here’s the thing: all indices were up from 0.5%-0.7% (except the strongest index year-to-date, Dow Utilities which plunged 1.1%)- amazingly synced, and total NYSE Volume was a strong 3.44B shares BUT shares traded on the NYSE floor remained at a weak 592M shares – just 9M more than Monday’s weak level. Even that was only achieved by 120M shares trading AT THE BELL!!! Is that the kind of rally you want to hang your performance on? You decide.
Advance/Declines and breadth were solidly positive and new highs nearly doubled to 235 while new lows remain weak and steady.
Bonds closed lower. Gold plunged, trading down to $1302, lowest since 6/19 – when the rally began, before closing at $1306.70 -$30.70, while Crude barely budged…that is, if you ignore its low of $100.22 – lowest since May 12th and closed at $100.91 +.08. It has been up just once in the last 11 session!

Total NYSE Volume reversed again to a solid 3.44B shares from 2.66B vs 3.14B vs 2.82B vs 3.22B vs 2.66B vs an extremely weak 1.99B. Last real above average volume was 4.25B (end of quarter). Real NYSE Volume barely budged, despite the rally, to 592M shares vs 583M vs 654M vs 570M vs 683M vs 602M vs 537M – second weakest since April 30th vs 597M –contrast to 1.49B at end of quarter. That and options expiry’s 1.72B shares the only ones above 800M since 4/28! The 12-month average remains at a very weak 704M. Since 4/30 the average volume has been just 673M shares (still falling), ranging from 531M to 1.72B.

A/D’s were solidly positive: NYSE +1.8x vs +1.2x vs -2.3x vs +1.3x vs -1.5x; Nasdaq +1.7x vs 1:1 vs -3x! vs +1.2x vs -3.8x vs -3.9x. Breadth was similar but Nasdaq was blah: NYSE +2.1x vs +1.1x vs -2.7x vs +2.2x vs -2.6x vs -3.4x; Nasdaq +1.5x vs +1.3x vs -2.2x vs +1.5x vs -6.2x!!! vs -3.5x. New 52 Week Highs rose sharply to a solid 235 vs 146 vs 118 vs 145 vs 93!!! vs 187 vs 324 vs 319 vs 580 – recent range is 71-580!!! New Lows remain stable at a sub-average 53 vs 57 vs 118 vs 49 vs 53 vs 27 vs 26 – recent range is 24-214.
S&P VIX declined for a 2nd day taking out ‘12’ and closed at 11.82 -.26. While in bullish territory it gives little credence to the positive sessions of late. The range dipped to 11.40-11.83 frpm 12.09 -12.68. 7/3’s close was a new recent low 10.32, slightly better than the 10.34 on June’s options expiration!

Overnight markets:

Bonds closed weaker due to Portuguese banking fears not seen as regional, thus reversing the flight to quality. 10 yr closed at 2.55% -1/4. 30 yr closed 3.37% -11/16. The long TIP, which hit a low of 0.96% on 7/11, closed 0.99% -15/16, Overnight they are slightly better: 10’s 2.54% +3/32; 30’s 3.37% +1/8; and long TIP 0.98% +3/16. 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.; 0.326% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is 0.08-0.10% where it has been for weeks! Foreign bond yields mixed: Germany 1.19% -2; UK 2.63% +3; France 1.63% -2; Italy 2.86% -2; Spain 2.73% -4; Portugal 3.81% +2; Greece 6.17% +5 The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.53% –.

Gold took a header coming close to psychological support at $1,300 with a low of $1302.80, lowest since 6/19, before settling at at $1337.400 -$1.80. Last Thursday’s session high was $1346.60, highest since March 19th!!! This is the 16th straight close above $1300 since plunging on 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It is above all three key moving averages which remain locked and are now CRITICAL: 50 day $1292, then the 40 day $1291 and 200 day $1288!!! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13, then ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly better but in a narrow inside session at $1311.00 +$4.30.

Crude remains toxic, closing at $100.91 +.08 BUT only after a session low off $100.22 – lowest since 5/12 – FIVE handles since 6/30! A 99 handle is not unreasonable to assume. 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – has it in freefall with critical support next at $99.94 – the 200 day! 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 is well below the 40 and 50 day moving averages and just a tad above the 200 day! RES at 50 day $103.48, 40 day $104.21, SUP the 200 day $99.94!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it traded up briefly to $101.06 before plunging to another new recent low of $100.08 – lowest since 5/15 – and is now $100.15 -.76!!!

European equity markets weaker; Asia rallying: UK -0.1% vs +0.8% vs – vs -0.8% vs -0.4%; France -0.4% vs +0.8% vs +0.2% vs -1.4% vs +0.2%; Germany -0.4% vs +0.9% vs -0.1% vs -.1.4% vs +0.2%; Japan +0.6% vs +0.9% vs -0.3% vs -0.6% vs -0.1%; Hang Seng +0.5% vs +0.5% vs – vs +0.3% vs -1.6%; Korea +0.9% vs +0.3% vs -0.7% vs +0.1% vs -0.3%; India +0.9% vs -0.1% vs -1.4%! vs -0.3% vs -0.5% vs -2%! U.S. equity futures little changed in quiet trading: DOW +20 (range 29); SPX +0.80 (5); NDQ +6 (7)

Some random thoughts:

…you are walking down a street…you don’t see anyone you know, they all look foreign, you don’t feel safe, the government is a shambles, it has been corrupted, the wealthy flaunt their billions, own the government, and preach lower, taxes, no increase in minimum wage, shun global warming…and don’t give a damn about anything but themselves. Where are you? China? Turkey? Brazil? Nah, you are right here at home in the good old U.S. of A. Is this a great country or what?

Now get this: NYSE Financials were up 0.5% (Brokers +0.7%; KBW Banks +0.4%; Nasdaq Banks +0.1%)…so you say? Pay attention! Bank of America was second most active +1.2%! This on a day when Citi was fined $7 BILLION by Justice (?) for its transgressions in mortgages…now that’s hitting them hard…more than BofA, more than JPMorganChase…ah but there is more to this story and it STINKS!!! How so? First,

Never one to miss an opportunity to strut, AG Eric Holder (and his deputy), proudly announced the (yet another) record settlement doing the reverse of a perp walk by parading before the media…nevermind that his assistant shrugged of the fact that no one was convicted…let alone charged…proudly saying that $2.5B will be paid to (?) those who were harmed by Citi’s actions. He went on to say that the fines collected by the government will go to Treasury and to do more investigations. Ah, that makes TB feel so much better. This was on PBS News…interviewer Judy Woodruff asked ‘Assistant’ Attorney General Tony West these questions:
JUDY WOODRUFF: I’m sure you know there are consumer advocates out there who are saying this is not enough, it’s — quote — “too little too late.” We spoke — we saw today Public Citizen. I just want to read one comment. They said no individuals are being held to account. They said, the bank is not being charged with any criminal activity. They said the corporation faces no review of its bank charter, business continues in its offices. What do you say to those comments?
TONY WEST: Well, I think I would say a couple of things. I would, first, this is a civil resolution. It’s not a criminal resolution. And, in fact, by the very terms of the settlement agreement, we have not written off any ability to pursue criminal charges, should the evidence merit that.
JUDY WOODRUFF: So that could still come?
TONY WEST: That’s always a possibility out there. And it’s something that was specifically carved out of this resolution. The second thing I would say is that we know, of course, that no one resolution — this resolution won’t solve all the problems that were created by the financial crisis, but it is an important step to rectifying some of the harm.
JUDY WOODRUFF: Let me read to you another — another critic.
This Dennis Kelleher of the Better Markets Group. He said to us — quote — “That amount is” — the $7 billion — “is meaningless without the disclosure of the key information about how many hundreds of billions of dollars Citigroup made, how many tens of billions investors lost, how many billions in bonuses were pocketed, which executives were involved, what positions they now have with the bank.”
TONY WEST: Well, again, I think that it would be a mistake not to think that these are meaningful resolutions. What we’re talking about is an historically high civil penalty, $4 billion. In fact, it’s twice as much as J.P. Morgan paid. And, in addition, we’re talking about really compensating a number of investors who were lost if they were state agencies or pension funds, charities and the like. And I think we really can’t overlook the potential power of the consumer relief provisions, the power that that has to help rectify the harm that has occurred. You know, again, it’s not a panacea, but it is an important component to trying to restore some of the damage that has been caused by not only the conduct that we were talking about here in the Citi case, but other financial institutions as well.
(sound of TB gagging)
JUDY WOODRUFF: And just quickly again on the possibility of criminal charges, is that something Justice is actively looking at?
TONY WEST: Yes. And I don’t want to speak in connection with any particular financial institution, so let me just say generally, we are looking at all aspects. Understand the, civil resolution is only one tool, but wherever the evidence leads, wherever the facts lead, we will not hesitate, if that is criminal, to bring those charges.
(hasn’t the statute of limitations expired? How many witnesses are now unavailable?)

Woodruff forgot to ask one question: isn’t it the shareholders, who have already been harmed by the plunge in valuation, not to mention loss of dividends? You bet they are! Look at late as 1/9/14 the stocks hit $55.28, highest since…before plunging to $45 on 4/11 – a 27% decline! …in THREE MONTHS???…that’s nothing, suckers: it hit a record $570.00 on 12/29/06 (poor Prince Alaweed who always has faith in management). Yesterday, the stock ‘gapped up’ on the opening, traded as high as $48.83 before closing at $48.42 just 7 cents of the low (which left a gap from $48.35 to $47.01!). How could that happen with a record fine???

Remember it was Eric Holder who in a documentary (Capitalism Inc.?) said that he didn’t want to prosecute because he lay awake at night thinking what would happen to those poor shareholders! IDIOT!!!!…or worse! They paid while the execs got paid and played and continue to remain…not just Citi but everyone of these scum-sucking banks!

Ah, here is TB’s explanation of the ‘rally’…if you can avoid ‘hurling’ over it: first, there were a load of shorts – even after yesterday’s rally shorts remain at 1.37% of float and would require 2.5 days to cover. Oh, stop nit-picking, TB! Well, here is the big reason: this HAD to be done in conjunction with Justice…or at least they were told when the announcement of the fine would be made…they announced their EARNINGS simultaneously and they were very strong (that is a relative statement…but enough to force the hand of the shorts!), volume rose to 36.16B shares – high but only NINTH highest this year! Thus the fine was ignored (or at least put off until the close). See…timing is everything. But buy Citi? You have to be joking! Still, it was 4th most active stock gaining 3% on the session! Oh, one last thing: strong earnings or not, they did NOT raise the dividend which remains at just 1 cent per share!?!

NOTE: Goldman and JPMorgan just announced earnings – more positive surprises…isn’t THAT special???

Enough of this madness…TB is going to enjoy the national pastime tonight and do something All-American: he is going to the All-Star game (weather permitting of course!). This is the game where wealth and social status don’t matter. It is?

When TB lived in San Francisco the game was held in Oakland…TB couldn’t make it that time so it became a priority as it is unlikely the game will be played again in a city where he lives (it is in a different park every year). More than that his son wanted to go and Dad of course thought this was another great bonding idea. So he said, “sure, get ‘em.” …and get them he did…great seats and no worries of being counterfeit as he bought them from a co-worker who is a season ticket holder…face value: $200 – each!

Well, a lot of money but what the hey…misunderstood when he told me he had bought them for…drumroll please…$300…EACH!!! He clarified that and said no it was $700…ok, so $350 each…uh, no…$700 EACH!!! Then his friend asked him if he wanted the programs that came with them…he said of course…had we bought them at the game they would be $15 apiece! $700…but that doesn’t include parking, food and drink, etc. But as the Visa commercial says: “priceless” – well…

The average price paid this year is $1,096 – 2nd highest to 2008’s (just before the financial crisis!), $1,400 (capacity 50,291)!!! How can the rank and file afford this??? After all, standing room only is going for $250!!! Looked on-line at the MLB website and saw some tickets going for $6,900…again, each! They still have 350-400 available – of 39,504 (about 1%)! What do they think this is??? The Super Bowl? TB wouldn’t pay to see that freak show, and imagine…they don’t even pay the entertainers! Pretty good for a non-profit, right?…and one that disputes paying its players for their multiple concussions.

We have lost it…totally…but don’t you dare raise that minimum wage!!! You want to bankrupt everyone?

Have a great day…and night…TB definitely will!!

TB

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