Quote of the Day from the Friars Club Encyclopedia of Jokes: “While playing golf today I hit two good balls. I stepped on a rake.” – Henny Youngman
Bloomberg Quote of the Day: “The greatest mystery of existence is existence itself.” – Deepak Chopra
Bloomberg Top Stories:
*Ruble Dives to Record Low After Brief Gain on Biggest Rate Boost Since ’90 – !!!
*Stocks Drop as Oil Rout Accelerates; Ruble Weakens to Record, Bonds Climb
*Pakistan Gunmen Kill 146 at School in Deadliest Terrorist Attack Since ’07 – SAD!
*Jefferies Fixed-Income Revenue Plunges 73% on Losses From Distressed Debt – WOW!
*Sweden Pledges Whatever It takes as Nordic Crisis Policies Are Reversed
*Russia’s Rate Increase Threatens to Weaken Economy on Brink of Recession
*Brazil Bears Sensing Bottom Hit Mexico as ETF Short Interest Reveals Turn – !!!
*Why 1998 Was Different and the Same, to Crisis Now in Developing Nations
*Norway Krone Falls to Parity With Krona as Oil Drops Damps Economic Outlook
*Leveraged-Loan Gains Erased With Debt on Track for First Loss Since 2008 – !!!
*Holidays Bringing Good Tithings to U.S. Charities Favored by Elite Donors – Koch’s?
Monday’s Market Summary:
If you jumped in on that early morning rally, don’t blame TB. You were warned and the same goes for today! In fact for the rest of the week…this is a voodoo (doo doo?) market. Volume surged to 4.38B shares – oops, it was a down day, sorry. A/D’s and Breadth were about as bad as Friday! New 52 week highs shrunk to a very weak 78 while there were 640 new lows…doesn’t that tell you anything, Mr. Bull? Strangely (perhaps not so with options expiry looming) the VIX set another new recent high of 24.83 then settled down slightly at a still very bearish 20.12 -.66? All indices were down from 0.6% (Dow 30) to -1.1% (Russell 2000), EXCEPT Dow Transports??? They were up 0.2%??? Dow Utilities couldn’t take advantage of stock weakness this time, -0.8%.
Ah, but everything, not just stocks were weak: bonds after putting in new 52 week lows Friday, were off modestly; Gold was hit hard closing at $1207.70 -$14.80 and with a low of $1198 – first sub-$1200 print since 12/2 – just when you thought it was safe; Crude tanked again this time through two more handles to another new 5-1/2 year low of $55.02, before closing at a WEAK $55.91 -$1.90!!! – it better support at $50!
Total NYSE Volume rose again to 4.38B shares vs 4.16B vs 3.93B vs 4.05B vs 3.95B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) higher at 980M shares – highest since 11/21 (options expiry!) vs 941M vs 824M vs 913M vs 834M. For comparison purposes, for the prior 12 months it is a historically weak 723M shares, but since 10/1: 822B shares – including a 1.22B (and two more 1B+ share sessions) – highest since 9/19,. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 22 – just one in Nov, and now EIGHT 900M+ days: that is now FOUR 800M days and THREE 900M day for Dec.
A/D’s were very negative for a 2nd day: NYSE: -3.1x! vs -3.8x!!! vs +1.4x vs -4.6x!!! vs +1.5x vs -2.3x; Nasdaq -2.5x vs -2.4x vs +1.5x vs -4.6x!!! vs +2.1x vs -2.9x. Breadth was worse again: NYSE -4.1x! vs -4.7x!!! vs +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! Nasdaq -3.3x!!! vs -2.6x vs +2.2x vs -2.5x vs +2.1x vs -3.3x. New 52 Week Highs shriveled to an extremely weak 78!!! vs 111 vs 201 vs 215 vs 207 vs 386! – their range for the year is 39-612!!! New Lows higher again at 640 vs 603!!! vs 364 vs 460 vs 467! vs 416. The 2014 range is 24-1043!!! S&P VIX surged again to 24.83, highest since 10/17 before closing lower (?) at $20..42 -.66, but back from the session low of 17.77??? Very bearish!!! During the ‘rally’ it only made it to 15.94 – this despite the early rally! We are now nearing those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), and now a big possibility with options expiry this Friday! The average of the past 12 months is 14.03, with a low of 10.28!…high close of 26.25 on 10/15/14!
U.S. bond market closed weaker but near those new 12-month lows! Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.74%! and long TIP 0.83%), 10’s closed at 2.12% -5/16; 30’s 2.75% -3/16, and the long TIP 0.83% -7/8. Overnight HELLO!!! 10’s 2.04%!!! +11/16; 30’s 2.69%!!! +1-1/4!!!; long TIP 0.78% +1-5/16…ALL NEW LOWS!!!
Libor update: 0.243% 3 mos.; 0.341% 6 mos. Both not far off their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.12%? – back from 0.13%, a 9-month high. T-Bills: 0.00%!!! one-month; 0.02% 3 mos; 0.19%!!! – why did it rise?
Foreign bond yields mixed, industrials lower, PIIGS higher reversing Monday’s gains? (Benchmark is 10yr): Germany 0.58%!!! -5!; UK 1.73%!!! -7!!!; France 0.86%!!! -3; Italy 2.05% +6!; Spain 1.82% +4; Portugal 2.93% +4; Greece 8.88% vs 8.58%! vs 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03%, +34!!! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.35%!!! -2.
Gold closed WEAK trading down to $1198 for the first time since 12/2 before closing at $1207.70 -$14.80! – $1200 in play again! Last week’s intraday high was $1238.00 – highest since 10/22/ This is its SEVENTH straight $1200+ close since 12/5 when the selloff began. Barely above the 40/50 day again for just the 7th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This ended just two times in 32 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day ($1198!), the 50 day $1204, RES at $1256, the 10/21 high, then the 200 day $1269 – all have bottomed! The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight it is slightly higher at $1210.80 +$3.20 – BUT with a session low of $1196.60! There have now been 16 highs above $1200 since 10/31. Silver cracking too – below $17 for a 2nd day at $16.31 -.25, following its $17.27 high! This after a $14.12 recent low, not seen in more than five years!
Crude cannot find a bottom…will it be at $50??? It plunged to $55.02, lowest since 5/18/09!, then closed at $55.91 -$1.90!!! – that is it’s 8th straight ‘lower low’ and close! Consider: 10/25’s high was $84.83. There have now been 49!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($73.83!), then the 50 day ($76.12!), and lastly the 200 day (93.98!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $55.02-$112.24 since 3/1/12. Overnight, it had yet another huge new low of $53.60 (now its 51st handle!!!), but bounced and is now $58.02 +.21. Ouch! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).
Overnight Global Markets:
Global equities TANKING, especially Asia led by Japan UK – vs -0.3% vs -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France -1%! vs +0.1% vs -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -0.6% vs +0.1% vs -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! Japan -2%!!! vs -1.6%!!! vs +0.7% vs -0.9% vs -2.3%!!!; Hang Seng -1.6%!!! vs -1%! vs -0.3% vs -0.9% vs +0.1% vs -2.3%!!! Korea -0.9% vs -0.1% vs +0.3% vs -1.5%!!! vs -1.3%!; India -2%!!! vs -0.1% vs -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures also weak: DOW -75 (34); SPX -8.20 (33); NDQ -26.25 (66!). U.S. markets opening in the red but off the opening lows.
Some random thoughts:
…a friend sent me an article trying to rebut much of what TB said yesterday. The author was Victor Davis Hanson. Here are the key elements (italics) and TB’s comments
U.S. used to be an ‘egalitarian’ country…with the Democratic Party exhibiting that the most. I googled him and was surprised on several accounts. He is a Democrat; a Hoover fellow?; a supporter of Bush 43 AND his policies as well as Rumsfeld!?! Writes for: The Wall Street Journal, Commentary, (right as you can get), City Journal, The American Spectator ( very conservative) Policy Review, the Claremont Review of Books, and The Weekly Standard (Kritstol – ‘nuf said), – pretty much all well right of center. Is he a Republican in sheep’s clothing. I just feel you have to know where someone is coming from before interpreting their words. His words, my analysis:
The U.S. government now owes more than $18 trillion in long-term debt. Even after recent income tax hikes for the very wealthy and huge cuts in the defense budget, the Obama administration will still run an annual budget deficit of nearly $500 billion. – you do know that this is less than when the man took office, right? Also, that like Johnson, Dubya cut taxes 3 times – almost exclusively benefiting the wealthy, while fighting TWO wars? How can this man say he believes in a ‘balanced budget’? Oh, by cutting social progarms that grew as a result of Wall Street excesses.
No government official dares to trim Social Security or Medicare. Everyone knows that both programs are fiscally unsustainable. – is this bad policy or a failure to collect taxes from hedge fund operators, and grant huge subsidies to big companies while they export jobs and keep money offshore to avoid taxes. Why doesn’t he say anything about this?
More than 11 million undocumented immigrants are residing in the U.S. as federal immigration law is reduced to a bothersome irritant. A record 92 million American citizens 16 and older are not working. – interesting as he is a farmer (read OWNS a farm), yet has no respect for the workers who would be here legally if we hadn’t closed the borders after 9/11 and thus had to return illegally to work HIS fields as well as the vineyards, orchards, etc. of the entire west coast and Arizona!
Red-state and blue-state animosities reveal a nation more divided than at any time since the 1960s — or perhaps the pre-Civil War 1850s. – on this we can all agree but no one wants to fix it.
BUT the black community cannot accomplish this unless they stop defending the perps…which started with O.J.
Student-loan debt has surpassed $1 trillion. Six years of college has become the new normal. Even then, more than a third of the students who enter college never graduate. – and this is the fault of??? How about the for profit colleges where less than half graduate, most on student
loans with over a 50% default rate? WTF???
The Michael Brown shooting illustrates seemingly irreconcilable racial divides not seen in 50 years. Al Sharpton once was seen as a social arsonist and tax delinquent. Now he appears to be the White House’s most influential advisor on racial matters. – no argument here! This is fact!
The permanent bureaucracy is awash in serial scandals. The IRS, VA, GSA,NSA, ICE and Secret Service have all deservedly lost the public trust. — he isn’t seriously trying to say that
this was Obama’s fault…this is a deep problem. As for the IRS, that was a sham…there were dozens more conservative pacs formed so yes, more of them were investigated…wouldn’t you?
Our new foreign policy could be characterized as managed decline. Three defense secretaries have retired or resigned under Obama. Two of them, Robert Gates and Leon Panetta, wrote memoirs in which they blasted the administration. From Russia to the Pacific to the Middle East, the world seems to be descending into the law of the jungle as the U.S. withdraws from
its traditional role as a global overseer of the postwar order. – this is true and I addressed this in my column yesterday. Obama could have been part of the solution instead he is part of the problem…Wall Street backed and in bed with the Daley’s and Emanuel.
Neither drought, nor needlessly cumbersome regulations, nor unfair trade practices have stalled American agriculture. The farms of the United States — where less than 2 percent of the population resides — have never turned out so much safe, nutritious and cheap food that is feeding the world and earning America hundreds of billions of dollars in foreign exchange. – and THIS man has a farm in the Central Valley? Must be a gentleman farmer who forgot what he learned growing up on a farm. Also, we are forcing Afghani’s and Iraqi’s to use hybrid seeds – which have to be purchased each season as they do not reproduce. Fact!
The U.S. military — in which fewer than 1 in 100 Americans serve – is facing record cuts. The Navy will have fewer ships than the American fleet of World War I. The Air Force and the Marine Corps are shrinking. Yet superb American forces continue to ensure that the United States and its allies remain safe. Neither Vladimir Putin’s Russia, nor the communist Chinese hierarchy, nor the Iranian theocrats are quite ready to take the on the U.S. military. All are rightly worried that to do so would be suicidal. – Note that he did not serve (born in 1953) and Congress just approved nearly $500 billion for a plane the military doesn’t even want???
Only in America can you find the sort of innovation, talent, legal framework and can-do attitude needed to invent and refine hydraulic fracking and horizontal drilling. Just a few hundred thousand scientists, engineers, entrepreneurs, oil riggers and skilled craftsman have revived the
once-ossified oil industry for 320 million Americans. – only in America???
The United States is not running out of fuels — as was predicted over the last 20 years. It instead has become the largest gas-and-oil producer in the world. – tell me…why did (and especially now) we need the Keystone Pipeline that dumps the oil where we DON’T need it???
America is not saved by our elected officials, bureaucrats, celebrities and partisan activists. Instead, just a few million hardworking Americans in key areas — a natural meritocracy of all races, classes and backgrounds — ignore the daily hype and chaos, remain innovative and productive, and dazzle the world. – yet he would ask that they not earn a living wage and have seen their incomes slashed while the wealthy earn more as the GOP induced wealth gap widens??>? Also, for 40 years we have destroyed the pension system that we had replacing
it with IRA’s/401(k)’s that benefit only the wealthiest?
The silent few of a forgotten America have given the entire country an astonishing standard of living that is quite inexplicable. – or is it the VOCAL few, like the Kochs, Wall Street (where most of the billionaires came from).
Gosh, it makes you proud to be American…doesn’t it?
Parents, think about the world ahead for your kids…which won’t be too bad if your money doesn’t run out. Neither party is doing us a service but to continue to put the blame on Obama alone is disgraceful. He is part of the problem…and that is our electoral system which rewards
those who do the bidding of the Kochs and their buddies. Watch Barbara Walter’s interview with David Koch and ask if HE is one of those ‘silent few’.
Sorry but this really got to me!
Hope you have a wonderful Christmas and new year…as TB does for everyone.