9/11/14…a day of infamy…and where we are now…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “It makes no difference what it is, a woman will buy anything she thinks the store is losing on.” – Kin Hubbard

Bloomberg Quote of the Day: “If you want to understand today, you have to search yesterday.”

– Pearl S. Buck…I don’t get it?

 

Bloomberg Top Stories:

*First-Time Unemployment Claims in U.S. Climbed to Two-Month High Last Week

*RBS Joins Lloyds in Financial-Services Exodus If Scots Choose Independence – hmmm

*Ruble Slides on Russia Sanctions as Treasuries Rise, Commodities Retreat – rise and fall…

*Credit Agricole Said to Near Settlement in U.S. Sanctions Investigations

*Clues to Cynk’s Penny-Stock Mystery Found in Belize Money-Laundering Case

*RadioShack Says It’s Working With Creditors to Boost Cash as Losses Mount –hadn’t heard that

*Nine Out of Ten Hedge Fund Managers Are Overpaid With Fees, Unigestion Says – just nine?

*Scotland Claiming Bulk of Britain’s Oil in 40-Year Drive for Independence

*Tech Boom Turns Chicago Skid Row Into Surging Office Market – from rags to riches?

*Argentine Lower House Passes Bill to Pay Debt locally to Avoid U.S. Ruling

*Scotch Whisky Producers Say Single Malt Tastes Better in a Single Country – taxes is that it?

*Our Eight-Year Old Analyst Says Minecraft Is just Way Cool – but is Microsoft stupid? Are we in a game bubble? As a shareholder, do you think they should pay $2+ billion – for a fad? YES!!!

Minecraft’s draw? It isn’t just a game…you can create anything you want…just as with a pen!

 

Wednesday’s Market Summary:

 The rally that left Dow Transports behind…it did, and the other ytd leader Dow Utilities, +0.1% and -0.4% respectively. The winners were the two Nasdaqs – up 0.8%$ the pair…but before you put in your orders, this was a direct offset to Wednesday’ decline. The rest were up 0.3% (Dow 30) to 0.6% (Russell 2000). Volume was stagnant (not good on a rally); A/D’s and Breadth were positive but only half the negatives the prior session. New 52 week highs became even scarcer falling to 107 vs 121 vs 225 (a good number), while new lows rose again to 128 (high!) from 109 back from a weak 71! VIX however declined but just to 12.88 just .02 above the session low…but the intraday high was a bearish 14.66!

The Apple saga continues. This from yesterday: they made their big announcement and rallied – initially…remember it has been weak since hitting a record high of $103.74 on Sept. 2, falling to $98.12. THEN, because of their new ‘bigger’ IPhone the stock surged to $103.08 intraday – spitting distance from the record high, only to plunge to a new low of $96.14- lowest since 8/12 before coming back to close at $98.97 – definitely an ‘E’ ticket ride! Yesterday was more of the same: opened at $98.01, slipped back to $97.76 before climbing to $101.11, closing just 10 cents below. Remember…the new watch won’t be available until next year AND has to be near an IPhone to work! So much for Dick Tracy’s 2-way wrist radio! Who need it/them?

Oh and Microsoft rose to a record high of $46.94 and closed just 18 cents lower. On what, you ask? Oh, they are trying to buy a video gamer, Minecraft for $2 billion and change…as one rag said: buy like it’s 2006 all over again…TB would say like its 1998 all over again…you know, the dotcom boom/bust…er…bubble! What are they thinking? Dunno, but they may be late in the game…sorry, early in the bust, as Zynga…you do remember that one…peaked at $5.89 in March and is around $3 now. THAT IPO was at $11 on 12/16/11, traded up to $11.50, then fell to $7.97 less than a month later. From there it climbed back to $15.91 a year later, then down again to $2.09, and has traded no higher than $6 since then. Last is $2.99. Kids may know games but do they know or care about finance? Doubtful since they rank 12th in financial literacy…bet the same goes for adults! Soooo…do you want to go ‘all in’ on MSFT’s folly? Not TB!

Total NYSE Volume still doing nothing at 2.86B shares vs 2.87B vs 2.78B vs 2.81B vs 3.06B vs 2.77B. Real NYSE Volume also steady at 608M shares vs 603M vs 602M 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 697M shares. Since 4/30 the average volume has been just 649M shares, and slipping ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were weak but positive: NYSE: +1.1x vs -3.3x vs -1.6x vs +1.6x vs -2x; Nasdaq +1.6x vs -3.2x vs +1.3x vs +1.2x vs -1.6x. Breadth was similar:: NYSE +1.2x vs -3.4x vs -1.9x vs +1.6x vs -1.6x; Nasdaq +2x vs -3.9x vs +1.5x vs +1.7x vs -1.3x. New 52 Week Highs slipped to 107 vs 121 vs 225 vs 164 vs 265 vs 374 – recent range is 46-580!!! New Lows rose again to a strong 128 vs 109 vs 71 vs 87 vs 80 vs 56 vs 41 vs 52 vs 26! – recent range is 24-260! S&P VIX fell back to 12.88 -.62, its 8th straight close above ‘12’. Look at the range though: 1286-14.66! Options expiry a week from tomorrow!

U.S. bond market was weaker for a 4th session: 10 yr 2.54% -5/16; 30 yr 3.27% -3/4, the long TIP 1.02% (low was 0.87%!) -1-1/8!!! Rallying on new Russian sanctions overnight: 2.51% +5/16; 30’s 3.24% +9/16; and long TIP 0.99%! +13/16.

Libor update: 0.234% 3 mos.; 0.329% 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 at ZERO, on-month, where they went following the ECB rate cut, and yield from 0.00% to 0.09% out to one year!!! Foreign bond yields mixed – Greece lower (note: benchmark is the 10yrs): Germany 1.02% -2; UK 2.49% -2; France 1.37% +1; Italy 2.42% +2; Spain 2.28% +2; Portugal 3.19% –; Greece 5.48% -4 – waffling near the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.56% +2. Bonds are ‘risky business’ here!

Gold closed a tad lower at $1245.30 -$3.20 in a nothing session a day after falling to $1247.20, lowest since 6/10 – this marks it’s 17th 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 (now climbing), then the 40/50 day at $1291-1297! 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 changed in a narrow range at $1245.60 +.30.

Crude took a header again, falling to $91.67 – lowest since 1/9/14 – before closing weak for a fifth day at $91.67 -$1.08. 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. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 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 ($97.39), then the 50/200 day ($98.47/99.75) – all falling fast now! The range is $85.61-$112.24 since 3/1/12. Overnight it plunged to yet another new low of $90.43!!! its lowest since 6/28/13 before rebounding somewhat to $90.87 -.80!

Global equity markets weak, ex-Japan: UK -0.7% vs – vs – vs -0.9% vs -0.6%; France -0.8% vs -0.1% vs -0.2% vs -0.5% vs -0.5%; Germany -0.6% vs –0.3% vs -0.3% vs -0.2% vs -0.3%; Japan +0.8% vs -0.3% vs +0.3% vs +0.2% vs -0.1%; Hang Seng -0.2% vs -1.9% vs closed vs -0.2% vs -0.2%; Korea -0.7% vs 0.3% vs closed for 2 days vs -0.3%; India –0.2% vs -0.8% vs -0.2% vs +1.1%! vs -0.2% vs -0.2%. U.S. equity futures slightly weak and gapped down on the open: Dow -74 (range 81); SPX -8.10 (9); NDQ n/a?.

 

Some random thoughts:

“So those who are last now will be first then, and those who are first will be last.” – Mathew 20:16. Not like TB to quote the Bible but heard this recently and had to check from whence it came. Then came the Ten Commandments (aka Exodus 20): “Thou shalt not covet thy neighbour’s house, thou shalt not covet thy neighbour’s wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor any thing that is thy neighbour’s.” TB always got hung up on why you would covet his ‘ass’? Again, dunno.

Lastly, there are the Beatitudes, of which there are eight…must have run out of time: “Blessed are the poor in spirit, for theirs is the kingdom of heaven.” – ‘poor’ TB gets but in spirit? Does that mean if you are a slimeball but coincidentally rich you get the bounty? Dunno, requires further thought.

Anyone recall the late Reverend Ike? A pioneer televangelist who preached riches…along with you casting your bread upon his waters so it can come back ten fold…but don’t they all preach that? Oral Roberts, Jim Baker (who can forget Tammy Fay?). Here is TB’s fav: If you want your pie in the sky when you die, I’m not your guy but if you want your Cadillac now…praise the lord (paraphrased but you get the gist).

On the other hand if you are the Kochs, or Waltons, or Steve Schwarzman, or a host of others do you really care? Most likely not.

As for Obama’s speech last night…same old, same old: he speaks with authority but we no longer hang on the words…they are meaningless. BUT folks, in case you think TB wants him out…how about John Boehner, Mitch McConnell, Ted Cruz, oh and the affable John McCain (arguably the only man who would have gotten us into Afghanistan and Iraq sooner. Or how about Loser Numero Uno, Dick Cheney, who, now that daughter Liz lost on her bid for a Senate seat (too much like dear old dad, and clones), can’t stop flapping his jowls as if he knows what to do? Why if he were ‘king’, he and sidekick and former mentor Donald Rumsfeld would have in wars on at least four fronts! Shut up, Dick! We don’t need you…thought you figured that out by now.

Well, at least we now have a strategy…you doubt this? It’s true…Obama said so! Hope he isn’t following the GOP motto: do something…even if it’s wrong, do something! (Ok, so it wasn’t the GOP, it was a fire captain TB used to work with…Mickey Foster…may he rest in peace…no longer wielding his axe when he arrived on the scene.

 

Enjoy your day and remember, Blessed are the ——- for they shall —— (fill in the blanks)…and take time out to have fun!

TB

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