7/31/14…losing Iraq and losing your mind…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “You go to the ballet and you see girls dancing on their tiptoes. Why don’t they just get taller girls?” – Greg Ray

Bloomberg Quote of the Day: “Excellence is not a skill. It is an attitude.” – Ralph Marston

Bloomberg Top Stories:
*Stocks Tumble on Earnings, Argentina as Oil Falls While Dollar Strengthens – speaks volumes!
*Argentine Bonds Halt Two-Day Rally Amid Conflicting Reports on Debt Deal
*Banco Espirito Santo Plunges as Bank Ordered to Raise Capital After Loss
*Investment Banking Job Cuts Seen With Revenue Falling Faster Than Expenses
*Jobless Claims in U.S. Over Past Month Retreat to Lowest Level Since 2006 – but jobs???
*ISDA Asked to Determine if Argentina’s Credit-Default Swaps Will Pay Out
*T-Mobile Adds More Subscribers Than Estimated as Consumer Forecast Raised
*Broadbent Says ‘Edge’ Coming Off U.K. Housing Market as BOE Debates Rates
*Rental Car Companies Pressed GM Over Air-Bag Failures Before Switch Lawsuit
*Ukraine Crisis Spurs Volatility Hedging as Europe Stocks Near Record Value – same as U.S.!
*Coca-Cola Faces Up to Obesity Concerns in Campaign to Make Soda Fun Again
*Netanyahu Says Gaza Tunnels Must Be Destroyed Even Under Truce Agreement – yawn
*Sierra Leone Declares Ebola State of Emergency as Liberia Sets Quarantines
*Forty bullets in the Head Sends Honduran Family Fleeing to Safety of U.S. – kind of like “bang bang you’re dead, fifty bullets in your head”?
*Kerry in India Pushes to Salvage WTO Agreement as Midnight Deadline Nears
*Obama Said to Require Companies Seeking U.S. Deals to List Labor Breaches
You have to love this: Court Protects Gun Owners in Florida From Common Sense

Wednesday’s Market Summary:

The market open higher following Tuesday’s weak session…that lasted for all of five minutes then it declined until the Fed statement and stock came off their lows but never made it back to the morning highs, let alone to green. Then they retreated again, came back a bit and the S&P closed unchanged. Dow Utilities were weak all session, also hiccupped at the Fed, then closed down losing 1.7%. Best performer was Dow Transports which rose 0.7% but that was following -1.4% and -1.1%! The Dow closed -0.2% while the rest were up 0.4-0.5%. Volume rose again to an average 3.44B shares – a rarity these days. Real trades on the NYSE floor also rose to a still below average 680M shares. A/D’s and Breadth were mixed with NYSE modestly negative and Nasdaq modestly positive??? New 52 week highs slipped to 149 vs 181 while new lows were steady at 115. VIX rose slightly to 13.33 but is now in bear territory with a session high of 14.07!

Total NYSE Volume rose to an average 3.44B shares (rare) vs 3.14B vs 2.77B vs 2.63B vs 3.09B. Recent high volume was 4.25B (end of quarter). Real NYSE Volume also rose but just to a still below average 680M shares vs 628M vs 589M vs 570M vs 631M vs 581m – 7 days after plunging to 541M, the third lowest of 2014 (531M was the low) – with 236M at the bell!!! 537M on 7/3 was second weakest since April 30th. There have been just two sessions above 800M since 4/28! The 12-month average remains at a very weak 703M. Since 4/30 the average volume has been just 667M shares ranging from 531M to 1.72B.

A/D’s were mixed again with NYSE negative: NYSE -1.6x vs -1.5x vs -1.3x vs -1.9x vs -1.1x; Nasdaq +1.4x vs +1.03x vs -1.7x vs -2.1x vs -1.2x. Breadth was similar: NYSE –1.2x vs -1.8x vs -1.4x vs -2x vs +1.2x; Nasdaq +1.7x vs +1.2x vs -1.5x vs -1.7x vs +1.2x. New 52 Week Highs dipped to 149 vs 181 vs 152 vs 150 vs 280 – recent range is 71-580!!! New Lows were steady at 115 vs 118 vs 141 vs 55 vs 70 – recent range is 24-214. S&P VIX closed at 13.33 +.05 but with a range of 12.53-14.07…now in bear territory!

Bonds traded even in the Asian session but then opened weak with just a blip higher as the Fed statement was released then it was down and downer, a day after setting new 12-month highs: 10 yr closed at 2.56% vs 2.46% -13/16. 30 yr closed 3.31% vs 3.23% -1-5/8! The long TIP closed at 0.94% vs 0.87% -2-1/8!!! Overnight tanking again: 10’s 2.60% -5/16; 30’s 3.35% -3/4; and long TIP 0.99% -1-1/8! 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: 0.237% 3 mos.; 0.330% 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 are currently 0.06-0.8% – 2 basis points below where they have been for weeks! Foreign bond yields higher across the board, they too had risen late yesterday so it is worse than it looks: Germany 1.19% +2; UK 2.64% +4; France 1.56% +1; Italy 2.70% +1; Spain 2.51% –; Portugal 3.61% +5; Greece 5.93% +12! The recent high on selloff was 6.75%. Highly volatile!!! Recently 5.42% to 12.57%. Japan: 0.53% +1.

Gold traded down to $1291 before closing at $1296.90 -$3.60, first close below the psychological $1300 a day after a negative key reversal (higher high, lower low and close below prior days low!) Sitting on psychological support level of $1300! Now 4 closes below $1300 in 26 sessions since plunging on 4/14! 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! It remains below all three moving averages which remain near locked and CRITICAL…40 day $1300, the 50 day $1294 with final support still at the 200 day $1287. 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 weaker again at $1290.50 -$6.40 with a low of $1285.90, lowest since 6/19.

Crude traded down to $99.42, lowest since 7/15 before settling at $100.27 -.70! Last 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21 – SIX handles since 6/30! 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – put it in freefall and now just above critical support at $99.90 – 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. RES at the 50 day ($103.79), then the 40 day ($103.92), and barely above critical support at the 200 day $99.89!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it plunged to $99.09 just .08 above 7/15’s low and is now $99.61 -.66…ouch!
.
European equity markets slammed, Asia mixed: UK -0.3% vs -0.1% vs +0.6% vs -0.2% vs -0.2%; France -1.1%! vs +0.1% vs +0.9% vs – vs -0.8%; Germany -1.2%! vs +0.1% vs +0.8% vs -0.8% vs -0.5%; Japan -0.2% vs +0.2% vs +0.6% vs +0.5% vs +1.1%; Hang Seng +0.1% vs +0.4% vs +0.9% vs +0.9% vs +0.3%; Korea -0.3% vs +1% vs +0.6% vs 0.7% vs +0.4%; India -0.7% vs +0.4% vs closed vs -0.5% vs -0.6%. U.S. equity futures TANKING and at session lows!!! Dow -123; SPX -15.30; NDQ -34…is this the beginning of the big correction?

Some random thoughts

…TB watched the Frontline episode last night, Losing Iraq on PBS. Frontline is one of TB’s favorite sources and this one is well done as it shows just how badly we planned and executed the war. If there was one criticism it would be that Paul Bremer was let off the hook. It was he, who when sent by Bush (he was a close friend of Cheney), declared himself ‘Viceroy’ (bet you thought that was a cigarette?), which Bush tried to stop him from using…after all it translates to: assistant king. But the worst thing was his first order over the objection of the generals and senior staff that all Baathists were to be expelled from the government (many were teachers who joined the party because they had to), and worse when the Red Guard came and offered to serve he sent them home…with their weapons and many of this elite corps are haunting us in the conflict today. Nice job, Paul!

Still, overall it is a very good summary with commentary by Gen. Patraeus, Colin Powell, and others…we clearly screwed up big time. You have to love Rumsfeld’s comments, reminiscent of the old Kremlin in creating disinformation.

Rajiv Chandrasekaran, an editor at the Washington Post is interviewed too. They would have done well to spend more time with him as his book, Imperial Life in the Emerald City is a much a ‘bible’ as Thomas Friedman’s From Beirut to Jerusalem, published just before the invasion of Kuwait. TB’s favorite line is when Rajiv called Henry Kissinger, who Bremer served under, to ask what the man was like. Kissinger replied, “he’s a control freak.” – quite a strong statement from one control freak about another.

If you missed it, here is the link: http://video.pbs.org/video/2365297690/

Ending on a humorous note (unless you are or admire Sarah Palin), courtesy of the Huffington Post:

Sarah Palin just learned a valuable lesson about starting your own web channel: make sure to buy up any similar domain names, such as, say, one that simply puts “The” in front of your URL.
On Tuesday, after taking a look at Palin’s new project, SarahPalinChannel.com, “a safe space where like-minded folks can hear things they already agree with from someone whose opinion they already know,” Colbert gleefully announced that he had purchased TheSarahPalinChannel.com earlier that day.
So far, the channel is sparse on content, featuring only a photo of the former half-term Alaska governor-turned-grifter and a description: “The only Sarah Palin Channel on the internet with a definite article in the address!”

The page also links to an older segment of “The Report” in which Colbert roundly mocked Palin’s “ringin’ those bells” description of Paul Revere’s famous ride.
Perhaps most importantly, TheSarahPalinChannel.com is free, whereas SarahPalinChannel.com costs a whopping $9.95 a month. But, as Colbert explained, Palin’s channel is worth every penny: “Sure, that’s more than Netflix, but it’s just as good as ‘House Of Cards,’ with even more threatening monologues into camera.”

Have a great day!

TB

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