10/21/14…democracy or serfdom…it’s up to you!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Bigamy is having one wife too many. Monogamy is the same thing.” – anon

Bloomberg Quote of the Day: “I always find it more difficult to say the things I mean than the things I don’t.” – W. Somerset Maugham – what does he ‘mean’?

Bloomberg Top Stories:

*ECB Said to Buy Italian Bonds in Second Day of Purchases Under Draghi Plan

*Europe Stocks Rise With S&P 500 Futures as German Bunds Fall; Euro Weakens – sums it up

*Pimco’s Former Parent Pacific Life Switching Investment Accounts to Janus – good idea?

*Total CEO de Margerie Dies After Plane Strikes Snowplow on Moscow Runway – snowplow???

*JPMorgan, UBS, Credit Suisse Fined by EU After Libor-Manipulation Probes – when are we going to wake up and treat them as CRIMINALS…that is what they are and the worst kind!

*Greece Said to Seek Recycling of Bank Funds to Help Samaras Escape Bailout

*Whither Brazil Anxiety Widens Gap With Emerging Markets to Nine-Year High

*McDonald’s Profit Drops 30% as U.S. Sales Slump for a Fourth Straight Quarter – !!!

*Calling All Accountants After Valeant Earnings Prove Vexing – aren’t they all???

*Ebola’s Economic Fallout Spreads From Infected Countries to Rising Africa – very sad!

*Pistorius Starts Five-Year Jail Sentence for Killing Girlfriend – wait for the civil suits!!!

*Kobani’s Kurdish Fighters Say Iraqis Must Work With Them in Town Defense

*Stronger Ebola Guidelines to Protect U.S. Health Workers Released by CDC

*Forecasting Is Risky, Especially When You’re Predicting the Future Bloomberg View by Noah Smith but sounds like Yogi Berra, no?

Monday’s Market Summary:

All indices were up the entire session…except the Dow which plunged on the open and at the low was off 120 points, then came back to close +19. The obvious question being: why? After all, advancers beat by 4:1. The answer of course is ‘Big Blue’, IBM. Due to management withdrawing their earnings forecast for the entire year it cost the Dow 83 index points, making for an unremarkable day except for the disconnect it would have been up 0.6%. The rest ranged from the Nasdaq’s, both up 1.4%…and a strange bedfellow, Dow Utilities (?), followed by Dow Transports and the Russell 2000 +1%, and S&P 500 +0.9% – a closely bunched lot and you know how TB feels about that, right? Also the Volume plunged by a third to its lowest since 10/6, about when the volatility began – caution! A/D’s and especially Breadth were very positive but new 52 week highs declined by 25% to a weak 62, while new lows rose modestly to 82. Volatility dropped sharply to 18.57 -3.42 but still remains elevated and needs to get below 15 soon.

Total NYSE Volume plunged to near the old average at 3.3B shares vs 5.05B vs 6.06B : average volume for the first 13 trading days of October was 3.73B, or about 730M more than the recent average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: for October it is 920M shares!!! Yesterday’s plunged from 1.07B shares to 742M (595M at the closing bell). For comparison purposes, for the prior 12 months it was a historically weak 709M shares…but for the first 13 trading days of October, 933M shares including Wednesday’s HUGE 1.22B shared day – highest since 9/19. Yesterdday was the lowest since 10/6’s 696M share session. April 30 – September 30 we had just SEVEN 800M shares…for October so far? ELEVEN, including FIVE 900M+ share days. Will return to the volume of the summer doldrums?

A/D’s were solidly positive: NYSE: +2.8x vs +1.9x vs +2.3x vs -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq +2.2x vs 1:1 vs +2x vs +1.2x vs +1.6x vs -2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth very positive: NYSE +3.1x! vs +2.9x vs +1.7x vs -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +5x!!! vs +1.8x vs +1.4x vs +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs fell sharply and remain weak at 62 vs 83 vs 52 vs 49 – their range for the year is 39-580!!! New Lows rose and remain above average at 82 vs 67 vs 311 vs 1043!!! The 2014 range is 24-1043!!! S&P VIX is retreating from those bearish extremes with a high of 31.06 (highest since 11/28/11!!!) to 18.57 -3.42, but remains bearish and well above 9/18’s 12.03 The average of the past 12 months is 13.83, with a low of 10.32!

 

U.S. bond market was mixed in spite of the strength of stocks, and remain near their new 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closing at 2.19% +1/16; 30’s 2.96% +1/8; and the TIP 0.90% -7/16! Starting to slip again overnight: 10’s 2.21% -1/8; 30’s 2.98% -3/16; and long TIP 0.91% -3/16.  

Libor update: 0.231% 3 mos.; 0.323% 6 mos., both just above new record lows! The Fed Funds rate has averaged 0.09% and is now 0.08-0.10%. T-Bills range from 0.03%, one-month, to just 0.10% one year!!! Foreign bond yields mixed, Greece and other PIIGS rallying after slumping yesterday afternoon (Benchmark is 10yr): Germany 0.87% +3; UK 2.18% +3; France 1.30% -1; Italy 2.52% -7; Spain 2.22% -3; Portugal 3.39% -6; Greece 7.54% -27!!! from 8.69% last Thursday! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.48% –.

Gold closed higher at $1244.70 +$5.60 which places it right smack in the middle of the 40/50 day m’a’s, and very near Thursday’s $1247, highest since 9/11/13 ($1247). Ther have been just two prints below $1200 since 12/31/13 – 10/3 and 10/6 and soundly rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! SUP is the 40 day at $1237, RES at the 50 day $1249, and the 200 day at $1284. 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 rallying and at its session high of $1254.90 +$10.20. Silver still holding in the mid- ’17’s after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!

Crude closed little changed again at $82.71 -.04 in another narrow range session. Last Thursday’s high $84.83, low $79.78…lowest since 6/27/13!!! There have been 28!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($90.81), then the 50 day ($91.86), and lastly the 200 day (98.73) – all dropping again. The range is now $79.78-$112.24 since 3/1/12. Overnight slightly higher and tight at $83.11 +.40.

European equity markets STRONG, Asia mixed , the highly volatile Japan down big this time along with Korea: UK -0.9% vs +1% vs -0.7% vs -2.8%!!! France -1.3%! vs +2.1%!!! vs -1.1% vs -3.6%!!! Germany -1.4%! vs +2%!!! vs -0.4% vs -2.9%!!! Japan -2%! vs +4%!!! vs -1.4% vs -2.2%!!! vs -2.4%!!!; Hang Seng +0.1% vs +0.2% vs +0.5% vs -1%! vs -1! Korea -0.8% vs +1.6%! vs -1%! vs -0.4% vs -0.7%; India +0.6% vs +1.2%! vs +0.4% vs -1.3% vs closed. U.S. equity futures higher after gapping up again slightly for a 3rd day? Dow +42 (range 184 +7 gap); SPX +8.70 (20 +3); NDQ +29! (57 +12)

Some random thoughts:

…TB doesn’t know which is worse: Koch Brothers, U.S. Supreme Court, or Karl Rove. Doesn’t matter, all are hell-bent on destroying our system of government…i.e. democracy in favor of promoting the wealthy to the detriment of all others. Do GOP’er’s only get their info from FOX NEWS? If so, pity them…pity us…pity the young.

But the real blame lies with the Jamie Dimon-led financial sector. They control Congress and bought Obama the presidency: by throwing money at Obama’s campaign…how else did his fundraising surpass Hillary’s? …and they are getting their money’s worth – in spades.

Make no mistake, TB voted for Obama twice…first because the financial sector-controlled McCain (who chose Sarah Palin for his running mate – disaster!)…second because Romney was part of the financial sector as subsequent information has proved. Obama beat Hillary while a junior senator in his first term in which he avoided voting on key issues…which one has to do if one is to be elected.

Problem is, Obama is a great speaker…but where is the follow-thru? TB tuned him out years ago when the speeches proved to be just ‘feel good’ platitudes…that went nowhere.

Now that that disclaimer is in, let’s go back to Scotus and their ill-conceived (it had to be conceived as it wasn’t based on the Constitution – ask Sandra Day O’Connor!), decision in Citizens United. Yes, a corporation is an individual but it is not a person…you can’t put it in jail. Hell, we can’t even put the execs in jail when they nearly destroyed the entire world economy!

Enough on that though as you all know what a bad, politically motivated decision it was. It was an appeal over a law in Montana which banned outside contributions to political campaigns and Scotus overrode that too allowing the Koch brothers and other Rovian-spewing PAC’s to take control of the state…and many others. Of course, these PAC’s cannot support a candidate but only provide information to voters with no test as to accuracy…ergo disinformation! – of the worst sort which has driven the cost of campaigns to the moon and forced (encouraged?) candidates to go to the extremes for money…and then be beholding to them – mainly Wall Street!

Here are some examples:

*John Doe voted with O-Bama (definitely condescending) 96% (or more, some 99%) of the time.

– wait…how many times did GOP’er vote the party line…it is one and the same thing and assumes that to do so is always bad…gimme a break

*He voted for O-bamacare (for Sen. Franken, he cast the deciding vote – not true), now here is where it gets sick (no pun intended): they want to repeal it ‘first’ then replace – but the problem is they have shown NO plan and won’t – ever! Mitch McConnell in an interview said he would repeal Obamacare…but when asked about the popular Kentucky health care exchange he stumbled – badly: I have no problem with that…after all it’s just a website…talk about his time has went!

*Lies about condition of the state/district’s financial condition quoting stale data from think tanks…- and calling statements by other candidates ‘lies’ when they are basically correct

Enough…TB is feeling ill now…it is time for YOU to make a difference…but you won’t. We have lost the strength to be good Americans and now we and future generations will pay for the destruction of the greatest society in world history…we have thus destroyed over a hundred years of social reforms that created the middle class. Republicans preach Frederic von Hayek’s book The Road to Serfdom. This as the attempt to lead us to it while lining their pockets. Dems? Similar but not anywhere close.

Carpe Diem…enjoy it too!

TB

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