9/9/14…leave it to Dubya…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Eternity is a terrible thought. I mean, when’s it going to end?” – Tom Stoppard

Bloomberg Quote of the Day: “A man cannot be comfortable without his own approval.”

– Mark Twain, aka Samuel Clemens

Bloomberg Top Stories:

*Bonds Retreat With Commodities as S&P Index Futures Trade Little Changed – yes, bonds are weaker, especially Europe BUT coming off New Lows! Stocks gapped down on open for 2nd day!

*Apple’s Cook Shakes Doubters as Stock’s Historic Rise Precedes New iPhones – now just a minute…that’s old news…it PEAKED on 9/2 at $103.74, a record but then plunged to $98.31!!!

*FX Traders Said to Be Surprised by Narrow Scope of Questions in BOE Probe – nail ‘em!

*Carney Sees U.K. Rate Increase in Spring as Recovery Fuels Growth in Wages – sure he does!

*Spanish Bonds Tumble as Scotland Poll Swing Spurs Catalonia Comparisons – sure they did…from 2.04% on Thursday (a new low!) to 2.20%…brut from a high of 2.93% on 7/10 – hello?

*Pound Futures Positioning Signals Further Decline Ahead of Scotland Vote

*U.S. Economy Benefits From Draghi Dividend as Easing Talk Lifts Treasuries – who writes this?

*JAB’s Jimmy Choo Said Close to IPO to Value Luxury Shoemaker at $1 Billion–dotshoe bubble?

*Soybean Yields Poised to Reach All-Time High as August Rains Fatten Pods – fat pods?

*Fashion Week chick Geeks Shake Up $250 Billion Market to Widen Garb Appeal – not to TB!

*Most Influential 50 are Banker, Billionaires, Investors Who Move Markets–speaks volumes!

*EU Delays Russia Sanctions for Several Days on Hope Cease-Fire Will Hold

*Quebec Lesson for Scotland Is Even When Answer Is No the Question Returns

*Single Americans Now Account for More Than HALF the U.S. Adult Population – no way!

*Columbia Follows Piketty Plan in Raising Wealth Tax on Richest Citizens – it can’t happen here!

Monday’s Market Summary:

A 50% rally…yep, about half the major indices closed higher (3 of 7 actually or if you add in NYSE Financials 3:8! Even within Financials look: Brokers +1.3%; KBW Banks flat; Nasdaq Banks +0.4%)-Those up had puny gains too). The two Nasdaq’s and the Russell 2000 were all up about 0.2%, while the Dow, Dow Transports, and the S&P 500 were all off about 0.3%. The loser this time was Dow Utilities -0.8% but that is vs +1.2% – kind of interesting as that is how bonds usually show in long term performance: either the best of show, or the worst…but TB has never seen such a long period where lowly Utilities have outperformed with spotty days as goat. YTD they are up 14.9% with only Dow Transports at +15.9%, the NDQ 100 +14% making it a contest. The best sector however is Semiconductors where the Philly index is up 22%! The other two computer indices are both up 16.4%+! Speaking of Philly how about the Gold/Silver Index which is still up 10.2%??? Almost forgot Biotech +20.5% (led by Gilead – GILD – up 70% over that last 12 months…117% since March 31st! As for the S&P 500, it bottomed out on 8/ at 1910, then came a steady march up until it broke 2000 for its first time on 8/25 at 2002. Since then it has ‘waffled’ with its’ first ever’ 2000 close the next day – a weak 2000.02! It cannot gain traction which having set a new record is not a good sign if you are a bull, with a high of just 2011 on 9/4, two closes just below 2k (1997’s), and ended the day yesterday at 2001.54. U pick ‘em!

NYSE VOLUME at another ‘dull’ 2.78B shares while those traded on the NYSE floor remained lethargic at 602M shares – once again thanks to 37M at the closing bell! A/D’s and Breadth were mixed again: negative on NYSE and positive on Nasdaq, while new 52 week highs bounced back to 225 from a weak 164 while new lows slipped to 71. VIX rose to 12.66 and following the decline to 11.47, has been >12 for 6:7 sessions – options expiry is almost two weeks away…caution!

Total NYSE Volume doing nothing at 2.78B shares vs 2.81B vs 3.06B vs 2.77B vs 2.8B vs 2.23B. Real NYSE Volume slightly lower at 602M shares vs 610M vs 607M vs 616M vs 593M vs 617M from the new 12-month low of 491M. The average for the week ended 8/29 was 522M shares (highly unusual for a monthend, but it was Labor Day weekend – a new 2014 low – average volume at the closing bell was also a new low for the year of 387M shares! Note that the average for the final week of 2013 was 424M! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 698M shares. Since 4/30 the average volume has been just 650M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were mixed? NYSE: -1.6x vs +1.6x vs -2x vs -1.1x vs -1.1x; Nasdaq +1.3x vs +1.2x vs -1.6x vs -1.8x vs +1.5x. Breadth was similar:: NYSE -1.9x vs +1.6x vs -1.6x vs -1.1x vs -1.2x; Nasdaq +1.5x vs +1.7x vs -1.3x vs -1.4x vs +1.7x.. New 52 Week Highs bounced bak to 225 vs 164 vs 265 vs 374 vs 288 – recent range is 46-580!!! New Lows fell back to 71 vs 87 vs 80 vs 56 vs 41 vs 52 vs 26! – recent range is 24-260! S&P VIX rose to 12.66 +.57, its 5th straight close above ‘12’ with a tighter range of 1240-13.09.

U.S. bond market was slightly weaker again: 10 yr 2.47% -1/8; 30 yr 3.23% -1/32, the long TIP 0.96% -1/8. Overnight weaker: 2.50% -1/4; 30’s 3.25% -3/8; and long TIP 0.97% -1/2.

Libor update: 0.232% 3 mos.; 0.327% 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 remains 0.08%-0.10%, where it has been for weeks! T-Bills back above ZERO where they went following the ECB rate cut, and now yield from 0.01+0.09% out to one year!!! Foreign bond yields higher after plunging Friday afternoon following U.S. payrolls (note: benchmark is the 10yrs): Germany 1.01% +6; UK 2.50% +3; France 1.35% +7; Italy 2.38% +8; Spain 2.22% +14!!!; Portugal 3.16% +10; Greece 5.49% +3 – back from the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.53% +1. Bonds are dangerous here!

Gold broke from its lethargy falling to $1251.10, lowest since 6/10, before closing at $1254.30 -$13.00 – this marks it’s 15th straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 200 day $1285, then the 40/50 day at $1294-1300! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is barely positive in another inside session at $1256.00 +$1.70.

Crude closed weak for a third day at $92.66 -.63 – with a new recent low of $91.80, lowest since 2/5/14. There have been FOURTEEN handles since 6/30! 7/22’s high was $105.20, highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 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 40 day ($97.80!), then the 50/200 day ($99.00/99.78) – 40/50’s still falling! The range is $85.61-$112.24 since March 1, 2012. Overnight it is rallying with a high of $93.94 and is now $93.58 +.93.

European equity markets weaker, Asia mixed: UK – vs -0.9% vs -0.6% vs +0.4% vs +0.8%; France -0.2% vs -0.5% vs -0.5% vs +1.5% vs +1.3%; Germany –0.3% vs -0.2% vs -0.3% vs +0.8% vs +1.4%; Japan +0.3% vs +0.2% vs -0.1% vs -0.3% vs +0.4% vs +1.2%; Hang Seng closed vs -0.2% vs -0.2% vs -0.1% vs +2.3%; Korea still closed vs -0.3% vs +0.3% vs –; India -0.2% vs +1.1%! vs -0.2% vs -0.2% vs +0.5%. U.S. equity futures weaker, gapped slightly lower on open again: Dow -33 (range 56); SPX -4.40 (7); NDQ -3.25 (11). Tenuous at best! U.S. stock market opening WEAK!

 

Some random thoughts:

Look at those two highlighted headlines from Bloomberg Top Stories today! Speaks volumes about what is wrong with our country! In the first one, have any of these people done anything – one thing – of value? …but we sure ‘value’ them as if they are the quintessential Americans! As for the second…add to it the percentage of Americans, including college graduates still living at home, and we have a problem. This is not sustainable. As Kwarting said in War and Gold, the book TB cited yesterday and other times lately, the Bush Administration, 43 not 41, squandered an opportunity, not just with the blessing of the GOP Congress, but by failing to ‘wield’ the veto pen he so proudly proclaimed he would. Worse, a la Johnson and Carter, he gave us ‘guns and butter’ but unlike the former two, who fought a war without raising taxes, he fought TWO wars AND cut taxes three times…including an ill-thought out reduction of the estate tax to ZERO…a time ‘picked’ by George Steinbrenner and at least two other billionaires to die to escape taxes…isn’t that the goal after all?

Ah but there’s more…the so-called ‘war on terrorism’ wasn’t even the big cause of our deficit problems (cited yesterday when Greenspan was concerned about there not being enough government bonds to maintain liquidity…not to worry Alan, Dubya had a way!

Want more? Read the book! But here are a few more snippets:

*a one-year 10% discretionary spending increase after adjusting for inflation – the biggest real rate of growth since 1967!

*the CBO estimated spending on the War on Terror and invasion of Afghanistan (recall we were just going in long enough to get Bin Laden), at $17 billion in 2002 – less than one quarter the overall spending increase.

*in 2002 he proudly declared, “I’ve got a tool and that’s called a veto.” – mustn’t have been able to find his pen, which dismayed many of his GOP supporters.

*by 2006, the federal budget had grown by 27% – more than twice as fast as during Clinton’s entire eight years!

*Bush ‘browbeat’ Congress into creating the biggest expansion of the welfare state since Lyndon Johnson!

*heh, heh. Bush called himself a ‘compassion conservative’ when he ran for the presidency, a term TB cited by Arthur C. Brooks, of the American Enterprise Institute for himself in why he opposed raising the minimum wage…

*A traditional conservative like Eisenhower would be inclined to ‘raise taxes to balance the budget; a supply-side advocate like Jack Kemp whould have cut spending while cutting taxes at the same time; while Bush increased spending AND cut taxes.

*Bush shunted aside the outspoken administration hawk Paul O’Neill for using common sense, with John Snow who never disagreed on anything with Bush and his handlers.

*In September 2006 the CBO projected the national debt at $1.2 trillion for the end of the fiscal year…actual? $4.8 trillion – four times…this is unconscionable by a president

Much more there but one thing for sure: Obama has taken the rap by a politicized GOP and big business for the mistakes of his predecessor. One question remains” why didn’t the Democrats broadcast this loud and clear when he was being castigated? Dunno. TB is not defending Obama, who has failed to lead as president, most notably in the field of defense, (Syria and the ‘line in the sand’ and now Iraq (but once again, who got us into Iraq…and for the wrong reasons…and without knowing who their leader would be. Nice job, Rummy, Cheney, and Dubya!)

Sorry for the rant…and one other thing…Obamacare is working (not the plan TB would picked), and would be a huge success if the states with GOP governors had done their citizens a favor and set up insurance exchanges…like Minnesota!.

Vote GOP…the ones who want to ‘fix it’ for the working class…well…the ‘fix’ is in!

That’s enough ranting for today…sorry this is so late…stock market still in decline!

TB

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