Posts Tagged Paul Ryan

11/22/16The beginning (end?) of Trump

(NOTE: it has been four months since I posted here. I am truly concerned for our country and my children’s and grandchildren’s future. We just finished a very contentious election and it will not be over until December 19th when the electoral votes are talleyed. In the meantime I am going to point out my concerns about our new president’s qualifications.)

This is not meant to be mean-spirited, it is about whether this man is qualified (mentally) to be the President of the United States. It is all the more imperative since he will have both houses of Congress, most governorships, and soon the Supreme Court all aligned. This is not, and never has been good for the people and the country.

It is not over…yet. First, the electoral count is 290 to 232 for Trump. In 2008, Obama had 330 and in 2012 303. Yet, the Trump team, Speaker Ryan, and others believe they have a mandate. The last ‘mandate’ was Obama in 2008 when he won by over 5 million votes, but by declaring a mandate, the Democrats set themselves up for failure and just two short years later, thanks to the Tea Party, the House turned Republican, where it has remained ever since. So Mr. Trump and the GOP: you DO NOT have a mandate, not when Clinton is leading in the popular vote by 1.7 million, and Michigan and Florida are up for grabs.

Did you know that since 2000, the average margin of victory, in either direction, in Florida is less than 11,500 votes? I am not a spoiler but I have written to the Office of the Federal Registry which every four years becomes the electoral college. While they are committed in most cases to vote with the popular vote in their state, the college exists to keep the people from making a grave mistake. Only once has the vote swung the other way and the candidate was still elected by the House of Representatives. That year, an entire state, Virginia voted against its citizen for all 25 votes. This year it would only take 21 electors to revolt and turn the election (although I am not advocating it or even believe it will happen, but it could). With 1.7 million voters disagreeing with the state tallies, why not?

The way it works is this:

“The Certificates of Ascertainment, which contain the names of the appointed Electors and the vote counts for each political party on the state’s ballot, are signed by the Governor and contain the state seal.  These are prepared before the meeting of the Electors, which is December 19 this year.  At the meeting of the Electors, the Electors each vote and that vote is recorded, so both the identity of the Electors and how they voted is public record.  Each Elector signs the Certificate of Vote.  We will post both Certificates on our website once we receive them from the states, but we currently haven’t begun to receive the Certificates of Ascertainment yet.” (Source: Office of the Federal Registry)

A further question is the all or none method in some states and proportionate in others. The Constitution set no rules on how votes were to be apportioned. The Office of the Federal Registrar informed me that it would require a Constitutional Amendment.

As you know, Donald J. Trump is the first candidate in recent history to refuse to release his tax returns (during the campaign he said he was not allowed to during an audit – denied by the IRS – but would release them as soon as it was completed – not yet!). Now he is refusing with his staff saying that his financial statement supplied was enough. It is not! Especially for a man with so many interests globally to avoid (multiple) conflicts of interest. Now we have learned from the IRS that his foundation has engaged in self-dealing, which they have admitted to. These issues include paying fines levied against Trump and I am sure when it is looked into there will be many more.

Ah, but what about the Clinton Foundation? They are accused of using her office as Secretary of State to obtain foreign donations. So long as it only increases accessibility and no value was received (same goes for Congress), that is not illegal. It has been reported in the past that one thing the Clinton’s are scrupulous about it their taxes. Obviously, they saw the risks and from what accountants have said they have been very conservative, to the point of not taking deductions when they were advised they could – could you do that?

I just sent the following message to my representative, both Minnesota U.S senators, Paul Ryan, and Mitch McConnell. Feel free to use it if you agree with me on this subject:

Congressman/Senator, you have a duty to demand that Donald Trump release his tax returns. it is unthinkable with his conflicts of interest that he do so. This is now imperative in light of the IRS release on the Trump Foundation’s self-dealing.
The GOP blundered in even letting this man run as a Republican, and Mr. Priebus has been amply rewarded for it.
Respectfully,

That is enough for today. Think about it. This could be a big turning point for our nation and its future. Based on his cabinet selections so far, I am very concerned about where we are headed.

Thanks for reading,

Trader Bjll

 

 

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6/25/14…IRS scandal…TB can help!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If law school is so hard to get through, how come there are so many lawyers?” – Calvin Trillin…and how come they teach conflicts of interest but all lawyers seemed to have missed those sessions?

Bloomberg Quote of the Day: “One’s destination is never a place but rather a new way of looking at things.” – Henry Miller…THE Henry Miller? Not a single name for female anatomy in the quote!

Bloomberg Top Stories:
*Economy in U.S. Shrank in First Quarter by the Most Since Last Recession – shocking!!!
*Orders for U.S. Capital Goods Increased Last Month as Investment Picked Up
*Stocks Fall With S&P 500 INces Futures on U.S. GDP Data as Treasuries Jump – very strong!
*Citigroup’s Anna Raytcheve Is Volcker Rule Survivor With Prop-Trading Team – shut it down!
*Banks May Lose $4.5 Billion Annually From Swaps Revolution, McKinsey Says – bring it on!
*RBS CEO McEwan Tells Shareholders Bank’s Returns Have Been ‘Unacceptable’ – duh!
*Charles Munger’s Daily Journal Lacks Accounting Controls, Auditor Reports – oh oh!
*Cochran Survives Mississippi Republican Runoff as Tea Party Suffers Defeat
*Merkel Warns of More Sanctions Against Russia as U.S. Said to Plan Steps – baby steps?
*Lankford Wins Oklahoma Republican Senate Primary Race for Coburn’s Seat – Tea Party loses

Tuesday’s Market Summary:

Not a good session with only Dow Utilities up – jut 0.1%! The rest down from 0.2% (NDQ 100 y -3:1) to -1% (Russell 2000), followed closely by Transports -0.9%! Volume was 3.06B shares, down from 4.22B on Friday’s options expiration. Bad news is volume higher on a down session! Another incredibly boring session…not even bonds or commodities showed us anything. A/D’s and Breadth were both solidly negative! Compare to the wimpy positives of late! NYSE Financials were down 0.8%: Brokers -1.5%! KBW Banks -0.8%; Nasdaq Banks -0.7%. Most active stock was BofA falling 1% vs +1.2%???

Total NYSE Volume plunged from Friday’s option expiry induced 4.22B shares to a more typical 2.7B shares – about 300M below the long-term average! Aside from Friday, the highest recent volume was 3.17B at monthend. Real trades on the floor of the NYSE were slashed by two-thirds to a very weak 572M shares from Friday’s 1.72B – highest since 2B on 3/21 and an amazing 41% of the total volume!!! It has been running at 22% of the total with high frequency trading running as high as 24.6% of total which triggered the SEC investigation – finally!!! Before you get all excited though note that the volume just before the close was 970M with another 750M AT THE CLOSE!!! That, folks, is not retail buying!!! The 12-month average rose by 3k on the volume to 717M shares! But since 4/30 the average has been a pathetic 668M shares – boosted by 30M on Friday’s volume! and THAT was only due to 150M shares on the close!!! We are not only in the summer doldrums but retail buyers doldrums!

A/D’s were negative after being dull for more than a week: NYSE -1.7x vs -1.01x vs +1.3x vs +1.3x vs +2.7x; Nasdaq -2.4x vs -1.3x vs +1.3x vs -1.2x vs +1.7x. Breadth was similar: NYSE -3.5x! vs +1.05x vs +1.1x vs +1.3x vs +4.3x; Nasdaq -2.3x vs +1.06x vs +1.3x vs 1.3x vs 1:1x. New 52 Week Highs fell sharply to a mediocre 369 vs 469 vs 425 vs 328 vs 255 – recent range 71-515!!! New Lows fell by a third to 42 vs 60 vs 42 vs 40 vs 38 – recent range is 24-214.
S&P VIX was little changed again at a bullish (overly???) 10.98 +.13 but with ‘11’ prints again at the top of the range: 10.92-11.35 – inching higher, Are you a bull? Well, good for you!

Overnight markets:

Bonds closed strong more than reversing Monday’s mild selloff! 10 yr closed at 2.58%! +7/16. 30 yr closed 3.40% +1-1/16! The long TIP, which hit a low of 0.978% on 5/29, closed 1.03%!!! +1-9/16!!! Overnight they are climbing again: 10’s 2.54% +5/16; 30’s 3.37% +1/2; and long TIP 1.01%! +5/8. 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: 0.234% 3 mos.; 0.326% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and remains at 0.09% -0.10%. Foreign bond yields lower, ex-Spain and Greece: Germany 1.29% -3; UK 2.68% -5!; France 1.73% -3; Italy 2.88% –; Spain 2.67% +2; Portugal 3.43% -1; Greece, which took out the old lows remains strong at 5.73% +2. The recent high on selloff was 6.75%. Highly volatile!!! Recent range is 5.42% to 12.57%. Japan: 0.56% -1.

Gold traded strong hitting $1325.60 intraday – still highest since 4/15 when it swooned. It closed at $1321.30 +$3.300 – its fourth straight close above $1300 since 4/14! Six days ago the high was $1285.10 – highest since 5/27 when it began its devastating plunge. 6/9’s $1240.20 was lowest since 1/31/14!!! It remains above all three key moving averages which are very tight: 200 day $1289, then the 50 day $1285, and the 40 day $1282 – key is the psychological $1300 level It has fared poorly since the ‘key reversal’ on 3/17, after printing the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight is lower at $1313.80.80 -$7.50 with a low of 1305.40.

Crude took another hit to $105..25, lowest since 6/12 – just two days after a run to $107.73 – highest since 9/19/13, a huge down session. It closed at $106.03 -.14 – still with just one close below $106 since rally began more than a week ago over Iraq. 6/5’s low of $101.60 was lowest since 5/16. 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. It remains well above all three moving averages: 40 day $103.08, 50 day $103.01, then the 200 day $100.09. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $106.43 +.40.

Global equity markets weak! UK -0.5% vs -0.1% vs -0.2% vs +0.3% vs +0.7%; France -0.7% vs +0.1% vs -0.3% vs – vs +1%! Germany -0.4% vs – vs -0.3% vs – vs +0.9%; Japan -0.7% vs +0.1% vs +0.1% vs -0.1% vs +1.6% vs +0.9%; Hang Seng -0.1% vs +0.3% vs -1.7% vs +0.1% vs -0.1%; Korea -0.6% vs +1% vs +0.4% vs -0.9% vs +0.1%; India -0.2% vs +1.4% vs -0.3% vs -0.4% vs -0.2% vs +1.3%; U.S. Stock Index Futures slightly weaker in quiet trading: DOW -6 (range 26); SPX +0.60 (5!); NDQ -1 (19).

Some random thoughts:

…several readers have written asking my take on the IRS investigation. No doubt, to TB that is but is that significant? Possibly…despite the rants of Paul Ryan and others on the panels…not to mention John Boehner’s irresponsible comments…though emerge two facts:
1. During the period in question, the majority of PAC filings were for conservative causes (remember these are supposed to be for social good…have you ever seen a positive PAC ‘infomercial’ – not even close!). This would of course cause more conservative groups to be investigated
2. Of the $210 million in the filings more than HALF came from two sources: PAC’s formed by …the Koch brothers!!!, AND by Karl Rove (the biggest one!)

With that amount of money possibly dodging taxes the IRS would be derelict if they did NOT investigate…or would they? You decide!

As for the missing emails: why not ask NSA for them…obviously they have them somewhere? We paid for them, let’s put the data to good use!

Lastly, James Kwak in today’s Baseline Scenario raises the issue of donors of corporate funds serving the CEO NOT the shareholders – concept! Furthermore, some activists are now demanding to know what monies were spent and for what causes! Damned right! Here is the link: Baseline Scenario – as always…you decide!

Have a great day!

TB

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6/11/14…life without Cantor…Eric, not Eddie!

Quote of the Day from the Friars Club Encyclopedia of Jokes: Every man has it in his power to make one woman happy…by remaining a bachelor.” – anonymous…but of course!

Bloomberg Quote of the Day: “If you don’t drive your business, you will be driven out of business.” – B.C.Forbes

Bloomberg Top Stories:
*Siemens Said to Consider Alstom Energy bid With Mitsubishi to Challenge GE
*Stocks in Europe Drop With S&P 500 Futures as Pound Rallies, Wheat Rises
*U.K. Jobless Rate Falls More Than Forecast to Lowest Level in Five Years
*Fed Ready to Keep super-Sized Balance Sheet for years to Preserve Recovery – ???
*OPEC Leaves Oil Production Target Unchanged at 30 Million Barrels a Day
*Tax Breaks for Apple to Starbucks to Be Probed by EU Competition Regulator – !!!
*Iraq Bonds Tumble Most in Year as Al-Qaeda Offshoot Takes Control of Mosul
*Family Dollar Traders Bet Carl Icahn Is the One to Get Sale Done
*Junk Loan Rally Shows Mutual Fund Redemptions No Deterrent – amazing reach for yield!
*Switzerland’s $381,000 Directors Brace for Activism as Board Rules Change – do it here too!
*Even Toilets Aren’t Safe as Hackers Start Targeting the Internet of Things – Target???
*Cantor Loss in Virginia Upends Republican Hierarchy, Dims Immigration Bill – they nailed him!
*Al-Qaeda Offhshoot Threatens Iraq Oil Sites After Taking Control of Mosul–what say you, GWB?
*Bergdahl-Taliban Swap Makes Obama Vow to Close Guantanamo Harder to Keep – Aarrgghh!!
*Spanish Lawmakers Debate Juan Carlos’s Abdication Amid Calls for Republic – !!!

Tuesday’s Market Summary:

The summer doldrums continue…boring!!!! How about this: all indices up except Dow Utilities which plunged 0.8% (but they can afford it). A mixed session where the biggest mover was the Russell 2000 -0.3% vs +0.9%! The rest ranged from -0.1% to +0.1% – incredible! Volume plunged again, especially floor trades! Nothing to see here!

Total NYSE Volume got even weaker falling to 2.69B shares vs 2.8B vs 2.84B vs 3.1B vs 2.78B vs 2.83B. Real trades on the floor of the NYSE plunged again to 557M shares vs 608M vs 640M vs 629M vs 592M vs 657M. The 12-month average declined by another 2k to a very weak 715M shares!!!!
A/D’s were negative for the first time in four sessions: NYSE -1.4x vs +1.6x vs +2.9x vs +3.5x vs +1.1x; Nasdaq -1.2x vs +2.2x vs +2.5x vs +3.6x vs +1.2x. Breadth mixed but barely budged: NYSE -1.01x vs +1.7x vs +2.3x vs +2.9x vs +1.3x; Nasdaq +1.3x vs +1.5x vs +2.4x vs +2.4x vs +1.7x. New 52 Week Highs were halved to 256 vs 515 vs 532 vs 436 vs 262 – recent low 71!!! New Lows about even but another near record (?) low of 24 vs 25 vs 36 vs 66 vs 96 vs 93 – recent range now 24-214.
S&P VIX moved back below 11 to 10.99 -.16 with a tight range of 10.93-11.66. This could be a setup for a very volatile options expiration on 6/20! There has been just one close above ‘12’ in 11 sessions and this was the 3rd time in five sessions that there was no ‘12’ print!

Overnight markets:

Bonds closed weak – a third straight and bigger decline: 10 yr closed at 2.64% -3/8. 30 yr closed 3.48% -3/4. The long TIP, which hit a low of 0.978% on 5/29, closed 1.17% -15/16. Overnight, slightly better: 10’s 2.64% +1/32; 30’s 3.47% +1/8; and long TIP 1.16% +1/4. 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: 0.230% 3 mos.; 0.320% 6 mos., both remain just off their record lows, set recently: 0.227% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond yields little changed: Germany 1.42% +1; UK 2.73% +1; France 1.76% +1; Italy 2.80% -1; Spain 2.64% –; Portugal 3.30% –1; Greece, which took out the old lows is now 5.48% +1 after plunging nearly 70 basis points in THREE sessions!!! – Translate that from basis points to $!!! The high on selloff was 6.75%. Highly volatile!!! Range is now 5.42% to 12.57%. Japan: 0.59% –.

Gold closed higher at $1260.10 +$6.60 with an intraday high of $1262.30, highest since May 28th – still, it is meaningless. Last Tuesday’s $1240.20 was lowest since 1/31/14!!! It hit $1304.10 on 5/22 – the last time it saw $1300! It remains way below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1284, then the 50 day $1287, and the 200 day $1295 – note convergence and thus formidable resistance! It has fared poorly since the ‘key reversal’ on 3/17, after printing the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher at $1262.40 +2.30.

Crude, while taking out Monday’s surge to $104.57, and probing higher yesterday to $105.06, highest since 3/3, failed, closing at $104.35 -.06. 6/5’s low of $101.60 was lowest since 5/16. 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. It is now well above all three moving averages: 40 day ($101.53) then the 50 day ($100.99), and 200 day $100.41. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is $104.55 +.20.

Global equity markets mostly weaker: UK -0.5% vs -0.3% vs +0.3% vs +0.4% vs +0.1%; France -0.8% vs +0.1% vs -0.1% vs +0.5% vs +0.6%; Germany -0.9% vs +0.2% vs +0.1% vs +0.3% vs +0.3%; Japan +0.5% vs -0.9% vs +0.3% vs – vs +0.1%; Hang Seng -0.3% vs +0.9% vs +0.7% vs -0.7% vs -0.2%; Korea +0.1% vs +1.1%! vs -0.3% vs closed vs -0.7%; India -0.4% vs – vs +0.7% vs +1.5%!!! vs +0.9%; U.S. Stock Index Futures sharply lower after gapping down on the open: DOW -67! (range 64); SPX -9 (9); NDQ -16.75 (15).
Some random thoughts:

…one of the most contentious figures in Congress went down to defeat last night…and as late as the 6 o’clock news he was seen as a winner with ease. That would be Eric Cantor, who was the spearhead for driving a wedge between the two parties…not to mention his own party. Paul Ryan, on the other head was firm but not inflammatory as Cantor was.

Now perhaps, John Boehner can return to acting as the House Speaker instead of adding fuel to the fire. That remains to be seen, but clearly the Tea Party was not pleased with Cantor (who seems to have modeled himself after his predecessor under Gingrich, Tom DeLay, which history proved was acting in his own self-interest).

Will this change things? No, especially with Benghazi and now Bergdahl still rearing their ugly heads. Politics at the ‘new normal’…but for how long? November? One can hope…

Have a great day!

TB

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3/5/14…making a living…wage?

There was no commentary yesterday so you can give up looking for it. TB

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Why are builders afraid to have a thirteenth floor, but book publishers aren’t afraid to have a Chapter Eleven?

Bloomberg Quotes of the Day: “Do one thing every day that scares you.” – Eleanor Roosevelt…TB does! He writes this blog!…and…

“If I see an ending I can work backwards.” – Arthur Miller…aka: reverse engineering!

Bloomberg Top Stories:

*Putin’s Ukraine Gambit Stings Russian Economy as His Allies Lose Billions – !!! Still not over…what will the oligarchs do? Robert Gates warns Obama to use caution!

*Emerging-Market Stocks Advance With Spanish Bonds as Natural Gas Retreats

*BOE Suspends Employee as notes Show Currency Manipulation Raised in 2006

*First China Offshore Default Looms as Chaori Solar Can’t Pay Bond Interest

*Smart Beta ETF’s Squeezing 256% From S&P 500 Get Record Cas From Investors

*U.S. Companies Added Fewer-Than-Forecast 139k Jobs Last Month ADP Says – !!!

*China Retains 7.5% Growth Target for 2014 as Challenges to Economy Mount

*JPMorgan Repeats at Top in Fees as Investment Banks Anticipate More Deals

*Frigid U.S. Weather Causing Highest Electricity Prices Since 2008 – do tell!

*Saturdays Off Can’t Beat Cash as Buyout Firms Speed Up Young Banker Hiring

*Russia Defies West’s Pleas on Crimea Occupation as EU Offers Financial Aid

*Israel Says It Seized Ship From Iran Carrying Syrian Arms Bound for Gaza

*Qatari Support for Muslim Brotherhood Roils Gulf Union as Envoy Withdrawn

(Due to a bout of jet lag no blog was published Monday. Publishing both days for reference.TB)

Monday’s Market Summary:

War is hell: on equities! Bonds rallied…but note Dow Utilities were down as much as the Dow 30 (0.9%!), in a tie for the ‘goat’ (Boch in German) award despite their income producing characteristics!  Total NYSE Volume was about average but floor trades were about 35M below average. Both Advance/Declines and Breadth were negative. New 52 Week Highs plunged to 162 from 446 while New Lows rose modestly to a still weak 43 from 37.  Note that the subset NYSE Financials fell by 1.2% (BofA most active falling 1.8%!): NYSE Brokers -1.4%!; KBW Banks -1.1%; Nasdaq Banks -0.7%!!!

Lastly Volatility Surged to 16.00 +2 ro 14.3%!!! with a range of 15.38-16.78 and there is a now BIG GAP up from 14.79-15.38!!! Bearish indicator…but what the hey, right? Will the Ukrainian situation go away soon…not if what TB read in Robert Gates book is correct! (Duty: Memoirs of a Secretary of War – a chilling and ‘must’ read!!! Truth!!!

Bonds as might be expected had a good day, led by the 30 yr TIP 1.26% +1-7/8!!!’ 10’s 2.60% +3/8; 30 yr 3.55% +1/2! Giving back much of that overnight!

Tuesday’s Market Summary:

 Not going to dwell on it but Friday turned out to be a mixed bag. Best performer? DOW UTILITIES UP 0.6%!?! Dow, S&P, Dow Transports and Nasdaq Composite all up 0.3-0.4%…that’s it!  Meanwhile the NDQ 100, Russell 2000 and NYSE Financials were all off 0.3-0.4%! Narrow range, eh what? Well…had the market closed around 2pm EST it would have been a completely different story…Dow was up nearly 120 points and a new high!…followed by a plummet to -50 (like Minnesota temps!). As TB said in the last commentary before leaving: aren’t we running out of reasons to rally yet?

One thing TB was wrong about was options expiry…not only did stocks continue to climb but volatility ROSE? from 13.57 (and 14.14 on 2/13) to 15.47 (Weds before options expiry!), and ended the month at 14.00…rising even as Dow rose 1% for the two weeks, S&P +1.3% – and a record high close?; but Transports up just 0.6%; NDQ 100 +0.9% and closed just 3 points below Thursday’s record high close??? The Nasdaq Composite rose 1.5% and closed just 9 points below Thursday’s record high close. Freaky huh? Dow Utilities, which are the best performer ytd (+5.8%) and barely in 2nd for the last three months at +6.3%, were FLAT for the two weeks? Question: why are income producing stocks doing so well…even for 12 months, 7.8% is nothing to sneeze at although eclipsed by all the others double digit gains…but the year is young…no?

A note on volume: unimpressive and weak for the most part, with a NYSE low for the period of 3.09B shares on Valentine’s Day and a high of 3.99B shares on Friday’s monthend! Not even an average 3.5B shares on options expiry. Real Volume on the floor was generally weak…about 100M below average with three exceptions: most notably last Friday’s 960M shares – highest since 12/20 but again it was monthend; 808M on options expiration;  and 845M shares on the following Monday. Average is about 723M shares! It has been above 700M just 18 times since 12/20 and the average is just 694M shares. Last year there were just TEN 1B+ share sessions! There have been 48 800M+ shares since 12/31/12: 20 up, 24 down, 4 mixed.

GOLD closed sharply higher with a session high of $1355.00 highest since 9/23/13 and settled at $1350.30 +$28.30! Crude rose sharply too $105.22, highest since 9/20/13, and settled at $104.92 +$2.43!!! Both are weaker overnight giving back half their gains.

As for bonds, the 30 year yield declined by 12 basis points to 3.58%, and the 10 yr by TEN. Both of these are stronger by 3-5bp’s overnight too!!! TIPS performed similarly.

Here is the scoreboard thru Monday:

 

Index

March

YTD

3 mos.

12 mos.

Returns

3/4/14

3/4/14

3/4/14

3/4/14

Dow 30

+0.5%

-1.1%

+3.2%

+16.1%

Transports

+1.6%

+0.9%

+4.3%

+23.5%

Dow Utilities

+0.0%

+5.7%

+6.1%

+6.8%

S&P 500

+0.8%

+1.4%

+4.5%

+22.9%

NASDAQ Comp

+1.0%

+4.2%

+7.8%

+36.8%

NDQ 100

+0.6%

+3.6%

+6.8%

+34.8%

Russell 2k

+0.8%

+1.9%

+7.8%

+31.9%

NYSE Fin

+0.6%

-0.4%

+1.8%

+16.7%

 KBW Banks

+0.9%

+0.5%

+3.7%

+27.1%

 NDQ Banks

+1.8%

+0.9%

+4.3%

+30.0%

Comments:

  1. Dow Utilities continue to be the best performer ytd and only lag the Nasdaq indices and Russell 2000 for the three months. 12 mos is respectable too
  2. Note the Nasdaq Composite is outperforming the NDQ 100!
  3. Transports are lagging ytd along with the S&P 500 while the Dow is still negative this year as are NYSE Financials!
  4. Remember the year is young…and fraught with RISK! Especially Russia!!!

Overnight Comments:

Bonds: Friday closed little changed and mixed. Monday closed up solidly and finally below the mid-Oct. levels, when the storm hit. Yesterday, gave back all of those gains and then some in correction on Russia…don’t even think this is over…not yet! 30 yr 3.65% vs 3.55% – the high was 3.97% on 12/31; the 10 yr 2.70% vs 2.60% – recent high 3.03%! Long TIP 1.34% vs 1.26%! – recent high was 1.64% The (record?) low of 0.36% was set on 4/5.  OVERNGHT: mixed with minor changes: 10 yr 2.71% -3/32; 30 yr 3.64% +1/16; TIP 1.33 +5/16.

Libor update: 0.234% 3 mos, 0.331% 6 mos. –  record lows set recently: 0.329% 6 mos! 3 mos  0.233%!!!). NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.07-0.09%!!! Foreign bond mixed, Greece and Portugal yields PLUNGING!!! Germany 1.62% +2; UK 2.73% +4- recent high 3.03%! France 2.18% +1; Italy 3.38% -4; Spain 3.37% -6; Portugal 4.68% -13!!! Greece 6.69% -14!!! – another new low taking out  6.83%! Recent range now 6.69% to 12.57%. Japan: 0.60% +1.

Gold closed lower following Monday’s big rally but still retaining more than half the gain, closing at $1337.90 -$12.40 on an ‘inside’ session. It has closed above the psychological $1300 every day since 2/12! It has also been above the 200 day since 2/14! That is major support at $1306. Monday’s high was $1355.00  – highest since 9/23/13 before the selloff began!!! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. Psych levels: $1200 and $1300 support, with support at the 200 day, $1306! Critical support at the 40 day ($1277) and the 50 day ($1263).  Overnight high is $1350.50 replacing the 2/26 high and is currently $1336.80 -$1.10.

 

Crude closed lower but still retained almost half of Monday’s big gain and highest close since 9/20/13, closing at $103.33 -$1.59 also on an ‘inside’ session but well above the $100.30 on 2/14! It has held ‘par’ since 2/12 which was the first time since 12/27/13! 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. Distant support is at the 40 day m/a ($98.09), and the 50 day m/a ($98.14), both starting to climb! FIRST SUPPORT at the 200 day ($99.97). The recent range is $85.61-$112.24 since March 1, 2012. It is currently $102.97 -.36.

Overnight global equity markets mixed: UK -0.6% vs +1% vs -1.6%! France -0.1% vs +1% vs-2.3%!!! Germany -0.2% vs +1% vs-2.9%!!!; Japan +1.2% vs +0.5% vs -1.3%!Hang Seng -0.3% vs +0.7% vs -1.5%!!! Korea +0.9% vs -0.5% vs 0.8%; India +0.3% vs +1.3% vs -0.8%. U.S. equity futures little changed: Dow -3 (range 45); S&P -0.40 (6.60); Nasdaq +2.50 (8)   

 

Some random thoughts:

TB alluded on Monday to a conversation on unemployment with the owner of the shuttle company we used to the airport. He said far too many people are collecting unemployment in France and that led to a discussion on wages. Have been doing a lot of thinking since and that gave me a block yesterday which is why none was produced.

Explained to him how our unemployment works and how Congress cancelled the extended unemployment program using the under 7% rate as cover. Actually over 10% when you adjust for discouraged workers and over 12% when you add-in part-time for economic reasons – two statistics not to be proud of. Add to this Congress’s inability to even consider raising the minimum wage to a still below the poverty level which is why some states are using a ‘living wage’ instead.

Tb is sick and tired of Paul Ryan and other ‘conservatives’ complaining about welfare costs…well if people could earn more than they collect on unemployment (assuming that is they can find a job which is near impossible if you have been out of work more than six months and don’t have a college degree…even that doesn’t help when there is long term unemployment! Doesn’t basic economics say if it is more profitable to work than collect benefits that is what you will do? Or should you content yourself to flipping burgers and having one or two other part time jobs…and oh, yes, many of us paid into our unemployment for decades! That is not being on the dole!

We have let the Tea Party and others convince us we are spending too much…so we are sacrificing our infrastructure while we have troops in Iraq, Afghanistan, and South Korea. At what cost??? Where is the benefit from that. Strongly urge you to read Robert Gates book and learn the facts of the military-industrial complex and it will shock you (just like the Congress-financial sector complex and the revolving door for congressmen and staffers to becoming lobbyists…fix it!), it is the most honest and revealing book on what really happens in government…and there are few good guys…Gates excepted…and he doesn’t build himself up and is very self-deprecating and plainly discusses his failures.

The griping about paying people an honest wage makes me ill. Consider that at WalMart, a company who proudly says their employees are their best customers, would only have to raise the price of a $20 item ONE PENNY to allow for a living wage. The sick part of this is that the family and other insiders are in the top ten of Americans in terms of wealth. Merde!!! Shit du merde!

Have they no faith that those employees will then spend more money at the company? Does the Tea Party really not see that 100% of unemployment and welfare (food stamps, disabled, etc.) is returned to the economy. True, that is aside from the ‘moral’ issue but so is sending kids to school hungry and that is where most food stamps go!

TB was reading again where Henry Ford declared he was going to pay his workers $5 an hour…double the going rate. Everyone said he would go bankrupt…oh yeah??? Those workers were then able to buy HIS cars! Also, he didn’t lose the good ones to his competitors. Gratuitous…no, just sound business!

How can any company have the unmitigated gall to tell you they can’t pay more…or even claim that they are being overtaxed when several of the biggest pay NO federal taxes and at least nine pay an average rate of just NINE percent! This while they pay their CEO’s tens of millions for – lets face it, mediocre performance due to targets based on earnings growth after we just came from a slump! At least hedge funds tie their bonuses to the ‘high water market’ – so that to get that extra 20% it is only on the amount above the previous high! That is also why many of them shutter after a market plunge.

We figure our average cost of a dinner in Paris was about 60 Euros ($80 or so). BUT there is no tipping…and obviously it isn’t hurting for the restaurant to pay it. Take our average tab here and add 20% and there isn’t much difference. I can tell you without hesitation that the service was as good or better than here…and no, they weren’t rude!

TB is not a liberal freak, but he knows when something is wrong and getting wronger! How can any sane person deny and not be concerned with the wealth gap…even as the cost of a college education increases and many companies aren’t paying new hires as much as they were in 2007, while those student loan tabs start coming due…imagine!

How can a CEO who cost his shareholders $20 billion even consider taking a $20 million bonus from a bunch of other CEO’s who are doing likewise (that is ignoring all of the fines JPMorgan has had to pay and you had better believe that morality starts at the top!).

How about we FIRE all the male CEO’s and replace them with women (but not Carly Fiorina). Did you know that Ina Drew who was held accountable for JPMorgan’s loss despite being out with Lime Disease for much of the year turned back her $5 million bonus…why not Jamie? Why not others? Just heard of an actual CEO who did so: IBM’s Virginia Rometty. Yep, she turned back her $9 million bonus because she didn’t feel the company performed well enough! How many of you would have the courage to do that? A sum that most people won’t earn in their lifetimes. But that is acting responsible and there is far too little of that in business today…the same business that has bought of our elected officials.  

You may not agree with any or all points but you had better think about what made this country great and strong: the middle class and it is rapidly disintegrating…you decide.

Have a great day!

TB

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8/5/13…to the GOP: it’s later than you think!

From The Friars Club Encyclopedia of Jokes: “A guilty conscience is the mother of invention.” – Carolyn Wells

Bloomberg Quotes of the Day: “Children learn to smile from their parents.” – Shinichi Suzuki…is that how Paul Ryan’s parents smile??? TB

Labor market trends are slowly improving with modest gains in nonfarm payroll employment. Moreover, the unemployment rate dropped as the participation rate slipped.  GDP growth accelerated in Q2, however, real consumer spending growth weakened compared to Q1. Meanwhile, consumer confidence, durable goods, factory orders and new home sales rose while construction spending and motor vehicle sales fell. Inflation remains subdued. Next week’s economic calendar is fairly light. The highlight of the week will be the July ISM Non-Manufacturing Survey (Monday). We will also get June International Trade and June Job Openings (Tuesday), June Consumer Credit (Wednesday) and June Wholesale Trade (Friday). Courtesy of Economic Advisory Service.

Bloomberg Top Stories:

*Treasuries Proving Safer Than AAA Sovereigns Two Years After S&P Downgrade – !

*Stocks Rise in Europe for Sixth Day as Oil Drops; U.S. Milk Futures Gain

*HSBC Falls After Missing Profit Estimates as Gulliver Says Growth Slowing – !!!

*U.K. Services Accelerate More Than Forecast to Fastest Pace in Six Years – ?!?

*Tourre Case Buoys SEC’s Enforcement Credentials as Congress Weighs Funding – oh yeah…they nailed a ‘lieutenant’ …what about the BIG DOGS: Blankfein and Co.?

*No Detroit Fallout Across U.S. as General Obligations Rally – what about pensions?

*Topix Best Friend Seen in Bernanke’s Taper as Abe-Inspired 66% rally

*Zimbabwe Stocks Tumble by Most Since 2009 After Mugabe’s Election Victory

*Swiss Housing Market Risks Continued Increase in Second Quarter, UBS Says

*Rusal Says Aluminum Premiums Poised  to Stay High as LME Tackles Backlog

*Hidden New Hampshire Billionaire Cohen Delivers Fortune in Unmarked Trucks

*Tale of Bond Salesman Who Wasn’t Reveals RBS Human Error at Several Levels

*Al-Qaeda Terrorism Threat Extends Closure of Some U.S. Embassies by a Week

*Turkish Court Imprisons Army Chief With Dozens of Generals on Coup Charges

*Assad Rules Out Political Solution to Syrian Civil War Seeking to Oust Him

 

A rally for the wrong reasons…worse it was yet another ‘low volume’ rally that only had momentum due to the payrolls report which, following Thursday’s strong rally, created some big trading opportunities.

The Nasdaq 100 was best performer at +0.6%, gaining 17 points…all of which was contained in just SEVEN stocks which gained more than one point: APPL +4.8 vs +3.6; QCOM +2.2; VIAB +1.9, and BIIB/MSFT/CSCO/FOXB/BIDU/DELL. There were no loser of one or more points. Note that gainers beat losers by just 1.1:1!

The VIX trading range slumped to 11.98-12.74 – a new recent low and it closed AT the low, down 0.96! A/D’s were barely changed and mixed while Breadth was slightly positive (Nasdaq best at +1.6x)..

…here’s the book:

* Dow 30 +0.2% vs +0.8% vs -0.1% vs flat vs -0.2% vs +0.5%; Dow Transports DOWN 0.3% vs +3.3%!!! vs +0.6% vs +0.3% vs -1.1%!!!; Russell 2000 FLAT vs +1.4%! vs +0.3% vs +0.3% vs -0.8%; Dow Utilities -0.1% vs +1% vs -0.7% vs +0.3% vs +0.3%; S&P 500 +0.2% vs +1.3% vs flat vs flat vs -0.4%. Nasdaq Composite +0.4% vs +1.4% vs +0.3% vs +0.5% vs -0.4%; NDQ 100 +0.6% vs +1.2% vs +0.2% vs +0.5% vs -0.2%.

*NYSE Volume slumped to a below average 3.13B shares from an average 3.78B vs 3.81B vs 3.31B vs 2.82B vs 2.74B vs 3.31B vs 3.07B vs 2.42B (3rd weakest of 2013…1.96B is the lowest of 2013). REAL NYSE Volume fell sharply to a below average 678M shares vs 798M vs 904M vs 678M vs 579M vs 596M (562M is lowest since 7/3). The 12-month average is 715M shares. The average since 6/30 is now 685M shares, ranging from 482M to 906M, 482M being the 2013 low! There have been just SEVEN 1B+ share sessions! There have been 30 800M+ shares in 2013: 12 up, 17 down, and one mixed, but on trades of less than that 92 have been up and 35 down …there have now been 30 mixed sessions.

*New 52 week highs have ranged from 33-864. They plunged again to 458 vs 730 vs 307 vs 257 vs 209. New lows also declined to 80 vs 108 vs 111 vs 69 vs 76 – 27 is the low.  

  1. Advance/Declines were nearly unchanged: +1.1x vs +1.6x vs +1.1x vs +1.1x vs -2.2x (recent range -17.5x to +4.4x) on NYSE and -1.1x vs +2.6x vs +1.2x vs +1.1x vs -2.2x (recent -3.5x to +3x). Breadth was similar but Nasdaq higher: +1.1x vs +3.3x vs +1.2x vs -1.1x vs +2.8x (recent -18.6x!!! to +6.9x!!!) on NYSE and +1.6x vs +3.2x! vs +1.1x vs +2.2x vs -1.6x (recent -12.8x to +6.2x)  
  2. NYSE Financials were slightly higher for only the 2nd  time in six sessions by +0.2% vs +1.5% vs -0.2% vs -0.3% vs -0.7%. BofA was most active but fell 0.2% after rising 2.4%, closing at $14.84 -.11 after hitting $15.03 7 days ago – highest since Jan. 14 and now major res. Brokers +0.2% vs +2% vs +0.5% vs -0.1% vs -0.9%; KBW Banks -0.1% vs +1.9% vs +0.5% vs +0.1% vs -0.9%; Nasdaq Banks -0.2% vs +1.8% vs +0.1% vs flat vs -1%! vs -0.5% USB +03% and a new high…so did GS/MS and UBS which rose 2.3%???.  
  3. Volatility (S&P VIX) declined again to 11.98 -.96 with a new lower range of 11.98-12.74 with last Tuesday’s high being 14.14!!!  This takes out 12.07 as the lowest since April 12th! VIX peaked at 20.49, plunged to 18.90 on June options expiry then closed at 20.11 on 6/24 and has been down below 14 since! 6/24’s session high of 21.91 was highest since 12/31/12 (22.72)!!! The range since April ‘12 is 11.05 (multi-year low o n 3/14/13) to 21.9. It is well below the 40/50 day (15.65/15.34) and the 200 day (14.95)!!!…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks mixed and little changed ex-Japan: UK -0.4% vs -0.2% vs +0.1% vs +0.7% vs +0.3%; France +0.1% vs flat vs +0.5% vs -0.4% vs +0.5%; Germany -0.2% vs +0.1% vs +1.2% vs -0.4% vs +0.4%; Japan -1.4%!!! vs +3.3%!!! vs +2.5%!!! vs -1.5%! vs +1.5%! vs -3.3%!!! vs -3%!!! vs -1.1%!;  Hang Seng +0.1% vs +0.5% vs +0.9% vs -0.3% vs +0.5%; Korea -0.4% vs +0.1% vs +0.4% vs -0.2% vs +0.9%; India +0.1% vs -0.8% vs -0.2% vs flat vs -1.3%. U.S. equity futures slightly weaker in what has become the norm – a very narrow trading range: DOW -21; SPX -2.70; NDQ -1.25.

Bonds had a big rally Friday – especially 10’s which rose 1 point while the 30 yr rose 1-1/8, and the long TIP also a point – all back in lower half of old trading range, but slightly weaker overnight: 10 yr Treasury 2.63% -5/16 (recent range 2.74% to 1.63%!!!), and the 30 yr range of 2.82% to 3.77%, currently 3.72% -9/16. The long TIP is 1.35% -5/8. The (record?) low of 0.36% was set on 4/5. Recent high 1.53%! Libor update: 0.265% 3 mos, 0.396% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields modestly higher across the board – ex Japan – after a nice rally following Friday’s U.S. payrolls: Germany 1.67% +2; UK 2.45% +3; France 2.23% +4, Italy 4.25% +1; Spain 4.56% +1; Portugal 6.44% +1; Greece 9.65% +4 vs 9.69% vs 9.64% -18!!! vs 9.80% vs 9.79% vs 9.81% vs 9.81% -10 vs 9.91% vs 10.02% +19 vs 9.81% vs 9.95% +17 vs 9.86% vs -13 vs 9.93% vs 10.07% vs 10.02% -16!!! vs 10.27% -19!!! vs 10.33% -25!!! vs 10.69% vs 10.85% +28!!! vs 10.52% vs 10.54% +40!!! vs 10.85% -37!!! vs 11.22%. Recent range: 8.04% to 12.57%.  Japan 0.77% DOWN 4.

Gold closed slightly lower for a second session but remains above the critical $1300 closing at $1310.50 -.70. 7/23’s session high was $1349.20 – highest since 6/20! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and now critical support. $1300 remains psychological support, and it remains between the 40 day $1305 and the 50 day $1324 – both still falling. lt is way below, the 200 day – $1548!!! Overnight it is weaker but $1300 has held…so far. Friday’s low was $1282.40 – lowest and first time below $1300 since 7/19!!! It is currently $1305.80 -$4.70. Crude also closed lower at $106.94 -.95 – following Tuesday’s session low of $102.67. It remains above the 40/50 day m/a’s (101.47/99.92), both rising. The 200 day ($93.79) is distant support. MAJOR SUP is $104.21 -36 – a triple bottom from 7/10-7/12….it traded below it for five straight sessions before rallying last Weds. 4/18’s low of $85.61 was lowest since 12/11! It is weaker overnight at $106.06 -.88. The high of $108.93 on 7/19! The range is $85.61-$109.32 since March 1, 2012.

Some random thoughts:

Hope you got out on Friday – like the big traders did – why waste a nice day? One has to wonder what on earth is keeping both the Dow and S&P at those record highs…it sure isn’t fundamentals.

It will still take FIVE years at the current employment levels to get us back to early 2008, but that is only a smidgeon of the problem: full time with benefits jobs have DECLINED while part-time/no benefits jobs are on the rise with many people holding two jobs just to make ends meet…or at least get close. Meanwhile, business…and the Grand Obstructionist Party continue to fight an increase in the minimum wage. Isn’t that simply amazing? By keeping wages down, increasing hours and adding machines they are increasing productivity – but at what cost to the economy…and our society? The Wealth Gap continues to soar…led by CEO compensation…ask yourself this: how long can this continue?

What is wrong with the GOP? Have they gone mad? The former ‘party of Lincoln’ would have him turning over in his grave…he died for this??? Shut it down is the watchword but unlike the Newtster, there is no cohesive plan…just cut spending and taxes…what a ship of fools!  Today TB will focus on two points which show what the true Tea Party agenda…as defined by the Koch brothers…two of the greediest men on the planet!

First, they are willing to shut down the entire government just to stop Obamacare. They say they want to repeal and reform it. If they get their way though it will disappear and you can be there will be NO new legislation…this from what was originally a GOP idea until the Dems seized on it.  We are a disgrace as a nation…the only industrialized nation that doesn’t take care of its citizens…what ever happened to life, liberty, and the pursuit of happiness? Doesn’t health fall within those categories? Here are the problems: health insurance must be regulated at the federal NOT the state level, doctors fees and hospital costs must be contained (you can go to Brussels and get hip replacement for a fraction of the cost here…and they have less complications…some insurers are even paying for people to do just that!). Then we have to take control of prescription drugs in two ways: first, let Medicare negotiate prices and stop advertisements (again) on TV for prescription drugs which would reduce the people going to the doctor and putting pressure on them to prescribe something they don’t need…yet we all pay for!

Second, is immigration…the GOP ‘path to citizenship’ is a really bad joke. First, those living here (who have been paying social security by the way), must pay back taxes, and then…and only then…can they go to the back of the line and apply for citizenship? In other words: no way, Jose! It ain’t gonna happen…which suits them just fine.

This is a party bent on self-destruction and for what? They took a moderate, Mitt Romney who had created a state health program and made him run as an unelectable conservative. You have to wonder at the mentality of the ‘leaders’ of the party…especially when respected members of the party are mocked…like McCain, even Graham, McConnell and others…have they gone  mad???

Not telling you what to think or believe…TB has never, and never will, do that! But you had better decide what is best for the future of this country and you had better do it fast.

…it’s later than you think…thanks for that Charles Dickens (and so much more).

TB

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3/13/13…volatility speaks volumes

From the Friars Club Encyclopedia of Jokes: “There are two million interesting people in New York City and only seventy-eight in Los Angeles.” – Fred Allen

Bloomberg Quote of the Day: “Your attitude, not your aptitude, will determine your altitude.” – Zig Ziglar

Bloomberg Top Stories:

*Retail Sales in U.S. Increased 1.1% in February, theMost in Five Months

*U.S. Stock Futures Erase Loss, Treasuries Fall on Retail-Sales Data

*London Gains First-Mover Advantage in Europe’s Race to Start Yuan Trading – !!!

*Pound Corporate Bonds Fall to Worst From First in Cash Flight From Britain – !!!

*Jamie Dimon’s Extra $1.4 Million Payout Hangs on Fed’s Dividend Decision

*Iran Oil Exports to Increase 13% Even With Wider Sanctions in IEA Forecast

*Fidelity Turns to BlackRock’s IShares Line for Expansion Into ETF Business

*Oil Riding Rails Jumps to Record as Buffett Urges Chest-Pulling Freight

*DeLong Says Now Isn’t Time to Cut U.S. Budget With Rare Free Lunch Offered

*American Tax Cheats Picked Off One by One After Swiss Advisor Mails It In

*No Pope Elected Yet as Cardinal Are Looking Beyond Europe to Vote Again

*Democrat’s Budget Plan Gives Obama Room for Grand Bargain Fight With Ryan

*Europeans Are World’s Biggest Smokers-Drinkers as WHO Urges Rise In Prices

*Could Paul Ryan Be An Inflation Nutter?     

A down day…finally…not an interesting session. Oh yeah, the Dow eked out another record high, but by just 30 points this time. By the close it was FLAT…ok, a 3 point gain. Volume rose slightly as did the VIX and Apple dragged the NDQ 100 down yet again. NYSE Financials were also weak with some big losses for the top banks. Gold and Crude were up but not impressively but both had the highest intraday high since 2/27/13.

TB is sticking with ‘sell in May and go away’ – IF we make it that far…when else have you been able to buy puts so cheaply???

Total NYSE total volume rose slightly to 3.22B shares vs 2.98B vs 3.64B vs 3.62B vs 3.67B vs 3.57B vs 3.38B vs 3.76B vs 3.53B vs 2/28’s 4.2B (highest of 2013 by about 400M shares). Real NYSE volume was also slightly higher but remains WEAK! It ran 622M shares up from 599M shares (lowest since 2/11’s 497M!!!) vs 690M vs 708M vs 684M vs 683M vs 693M  – vs 2/28’s (monthend) 1.01B shares!!!(second only to 1/18’s 1.07B and third best to 12/21’s 12 mo. high of 1.88B shares). Note that 700M occurred just once last week while the average volume since 2/15 is a weak 740M shares!!! Ave vol. 12 mos. 744M, ytd 710M. There have been just eight 800+M shares in 2013. THIS produced a Dow rally of 11.6% since the 12/28 low???…and now SIX consecutive record highs (ave 52 points, 371 total and since the rally began 7 days with the gain just 2.4% higher). Also, since the last options expiry on 2/22 the Dow is up 3.2%, S&P +2.5%. This on a very thin-based rally which is unbelievably getting weaker! Yesterday could have been the beginning of a correction ahead of Friday’s options expiry! ALSO, the VIX which surged to 19.28 on 2/28 fell to an incredibly low 11.56 Mondayday – with a low of 11.50 – lowest since 3/2/07, rose slightly to 12.29.

  1. new 52 week highs which had ranged from 121-680 (2/19), before falling to just 121, fell again to 413 vs 560 vs 630 vs 447 vs 539 from a very high 709 vs 418 vs 274 vs 326 vs 268 vs 145 vs 273 vs 214. New lows rose slightly to 36 vs 26 vs 24 vs 64 vs 73 vs 98 vs 93 vs 59 vs 49 vs 74 vs 52. Puts remain incredibly cheap!
  2. Advance/Declines were modestly negative after 10 straight positive sessions at -1.4x vs +1.2x vs +2x vs +1.4% vs +1.3x vs +2.8x vs +1.3x vs +1.3x vs +1.1x vs +3.2x vs +2x on NYSE and -1.4x vs +1.1x vs +2.1x vs +1.6x vs +1.2x vs +2.4x vs +1.2x vs +1.3x vs -1.1x vs +2x vs +1.5x vs -4.4x on Nasdaq. Breadth was similar at -1.3x vs +1.6x vs +2x vs +1.8x vs +2.2x vs +4.1x vs +1.5x vs +1.2x vs -1.1x vs +6.2x +2.4x vs -9.7x on NYSE and -1.7x vs +2.1x vs +1.9x vs +1.9x vs +1.4x vs +3.4x vs +1.8x vs +1.7x vs -1.1x vs +4.4x vs +1.6x vs -4.5x on Nasdaq.
  3. Both Nasdaq indices fell by about 0.4% vs +0.4%, with the NDQ 100 losing 11 points – 9.5 of them from Apple!!!  Only 40 advanced, 60 decliners. The Russell 2000 small cap which had been the only impressive index slipped 0.2% vs FLAT vs a 0.9% gain vs 0.5% vs +0.3% vs +1.2% vs +0.2% – that is still up 3.4% in 9 sessions! Don’t look down!
  4. NYSE Financials FELL 0.7% vs +0.6% for three days vs +0.3% vs +0.9% vs +0.5% vs +0.1% vs -0.2% vs +1.4% vs +0.6% vs -2.5%. BofA still most active and fell 1.2% to close at $12.01 (low $11.91!) vs +0.7% vs +1.6%, coming back from $11.11, lowest since 12/17, and still above the 40/50 day m/a’s from the lowest close this year – from $12.42 high on 2/13. Note: 11 cents is a 1% change!!!  Citi FELL 1.3% vs +2% vs +3.7%. No other financial most actives!
  5. Lastly volatility (S&P VIX) which had back to back lows going back to 2006 – 12.13 then back to 18.99 (with an intraday high on 2/28 of 19.28, highest since 12/31 – highs on 12/30-31 were 22.72 and 22.19 respectively, highest since 6/15. It rose after plunging to 11.56 closing at a still very complacent 12.27. Monday’s low of 11.50, had not occurred since 3/21/07 (11.21). Given all the world’s headlines and lack of income gains how can we be so complacent? Ah, in ’07 we were near the record high…you know…the one we just broke! For what reason???

Global equity markets are weaker – ex-Korea: UK -0.8% vs +0.1% vs +0.2% vs +0.7% vs +0.4%; France -0.4% vs +0.1% vs -0.3% vs +1.2% vs +0.6%; Germany -0.1% vs flat vs -0.2% vs +0.8% vs +0.3%; Japan -0.6% vs -0.3% vs +0.5% vs +2.6% vs +0.3%; Hang Seng -1.5%! vs -0.9% vs FLAT vs +1.4% vs flat; Kospi UP 0.3% vs -0.5% vs -0.1% vs +0.1% vs -0.8% vs +0.2%; India -1% vs -0.4% vs -0.2% vs +1.4% vs +0.8%. U.S. stock futures also weaker in narrow range: DOW -27; SPX -3; NDQ -5.50. Opening down slightly following Retail Sales.

Despite the equity minor weakness, bonds rallied from their recent lows with the 10 yr closing at 2.02% +3/8 vs 2.06%, and the 30 yr at 3.21% +7/8 vs 3.26%, higher overnight too: 10 yr Treasury range of from 2.06% to 1.85% last 16 sessions, now 2.00% +1/8, and the 30 yr’s 3.26% to 3.05%, now 3.20% +1/4. The long Tip also came back from 0.66% – a new high – to close at 0.63% +13/16. now 0.62% +1/4. Libor update: 0.241% 3 mos., 0.446% 6 mos, steady. Foreign bond yields mixed with problem credits weaker: Germany 1.45% -3; UK 1.93% -3; Italy 4.70% +10; Spain 4.74% +3; Portugal 5.80% +1; Greece 10.46% +6.

Gold closed solidly higher and along with Crude had the highest close since 2/27/13. It had been little changed for four sessions, still near support with the loss from the 1/17 high of $1699.90 at $115! It closed at $1591.70 +$13.70, still down -$57 in 11 sessions but also above a week ago Thursday’s low of $1554.30 – not seen since May 2012! Overnight it is $1594.60 +$2.90. The total breakdown through the 40/50/200 day m/a’s, has major resistance $1634-1668, with first resistance at $1600, a double bottom from 8/14-15, also a psychological level. Last time it was below $1500 was Sept. 2011!!! Crude rose slightly yesterday, six days after setting another new low of $89.33, lowest since 12/26, and way below the 40 day ($94.67), AND $94.31, the 50 day. It closed at $92.54 +.48. Overnight it is $92.76 +.22.

Some random thoughts:

First Paul Ryan and his not-so-grand ‘bargain.’ Here is a Bloomberg article challenging his premises…also, if we adopt HIS budget and head into a deep recession, what does he plan to do about it? Bloomberg  Opinion/Ryan

Next, electing a Pope. What a mess…first while the percent of Americans who are Catholic is steady at 25%, that is due to more Hispanics coming here. One in three Americans who were raised Catholic have left the church…can you blame them? That doesn’t include those who believe the dogma is seriously flawed and hypocritical. For a very troubling story read this: Catholic Church Denial/Father Macias

Those two stories should keep you busy for the day…

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4/13/12…Friday the 13th AND Dow 13k?

Bloomberg Quote of the Day: “Any informed borrower is simply less vulnerable to fraud and abuse.” – Alan Greenspan…now you know why they preyed on the uninformed and vulnerable!

…and:

“Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” – John D.Rockefeller. To TB that is one sad statement, yet one many of our millionaires and billionaires share today. Guess his handing out dimes to people in foodlines was just for show. TB

 

TB’s Quote of the Day: “You can fool some of the people all of the time, and some of the people some of the time, but you can’t fool all of the people all of the time.” – Abraham Lincoln. But Abe can you fool just enough of them to get elected or create a financial crisis? TB  

 

Bloomberg Top Stories:

 

*Stocks Fall in Europe as Commodities Decline on China GDP; Won Strengthens

*Biggest Banks in Europe May Need to Hold 17% Core Capital in EU Draft Plan

*Spanish Bank Borrowing From ECB Soared Almost 50% in March to Reach Record

*Spanish Bonds Tumble as Draghi’s Debt Panacea Found Wanting – carrot/stick!

*JPMorgan Earnings Exceed Estimates on Mortgage-Loan Profits; Shares Climb

*Dimon Said to Transform JPMorgan’s Treasury for Prop Trading Under Macris – not good!  

*Frugality Fatigue Spurs Americans to Trade Up as Consumer Optimism Grows – then what?

*Wal-Mart Loses Fourth Senior China Executive After Market Share Declines

*North Korean Rocket Disintegrates in Setback for Kim’s Four-Month-Old Rule – great news!

*Iranians Decry Nuclear Double Standard as Military Threats Loom Over Table – ahem, China?

*Syrian Cease-Fire to Be Tested on Prayer Day as Protests Challenge Assad – taking bets?    

There are two consistencies to stocks: higher volume days are on declines and magnitude of moves is lower on up sessions…read into that what you will. Yesterday we offset most of the losses from Tuesday less than half the losses since April 2, so technically still a dead cat bounce. Worse the Dow and S&P have come back to or near the 40/50 day moving averages so we better have some good news today for a continuation, especially since next Friday is options expiry for April.  Volume was slightly lower at 3.59B shares vs 3.77B shares on NYSE listed stocks (compare to 4.66B on Tuesday’s downdraft). NYSE stocks executed on the Big Board slipped for a third day to 741M shares from 790M after the surge to 972M on the selloff, and 200M below the falling 12 month average (972M)! Since 2/29 there have now been just THREE ‘average’ days, including 3/16’s high for 2012, and the average has fallen to 798M shares. Since 11/1 there have been just eight 1B share days…only three in 2012! Since 2/6 there have been FIVE sessions less than 700M shares. 100 of the last 110 sessions have been less than the 12 month average! Advance/Declines were positive for a second day: +4.6x vs +3.8x vs -5.8x!!! vs -4x! vs -1.4x vs -4x! on NYSE and +2.1x vs +3.6x vs -4.5x! vs -2.4x vs -1.1x vs -5x! on Nasdaq. Breadth was better especially on NYSE: +9.5x!!! vs +3.7x vs -12.9x!!! vs -8x!!! vs -2x vs -6x! on NYSE but +4.5x vs  +4.3x vs -11.7x!!! vs -5.2x! vs -1.2x vs -8x!!! on Nasdaq. New 52 week highs were higher but remain weak: 122 vs 76, high was 420 on 3/26, while new lows were about halved to 43 vs 74. The ratio was positive by about 3x but…vs 1:1 vs -3x!!! vs -2x vs +1.2x vs -2x. The S&P VIX plunged back to the convergence of the 40/50 day m/a’s (16.93-17.30) after gapping up Tuesday with a high of 21.06, highest since March 6! It closed at 17.20 -2.82! This closes the gap from the long weekend 4/5-4/9 but will options expiry next week alter things? March 16’s intraday low of 13.66 was lowest since 6/20/07’s 12.75!!!

Here are the results of the last seven sessions – 5 of 7 down. Dow +1.4% vs +0.7% vs -1.7% vs -1% vs -0.1% vs -1%! vs -0.5%; Transports +2.2% vs +0.9% vs -2.1%! vs -1.7%! vs +0.2% vs -0.4% vs -0.2%; Dow Utilities +0.5% vs +0.3% vs -1.3%??? vs -0.6% vs -0.5% vs  flat vs flat; S&P 500 +1.4% vs +0.7% vs -1.7%! vs -1.1% vs -0.1% vs -1% vs -0.4%; Nasdaq Composite +1.3% vs +0.8% vs -1.8%!!! vs -1.1% vs +0.4%? vs -1.5%! vs -0.2%; Nasdaq 100 +1.2% vs +0.5% vs -1.6% vs -0.8% vs +0.6% vs -1.4%!! vs -0.1%; Russell 2000 +1.5% vs +1.6% vs -2.4%!!!! vs -1.8%!!! vs -0.3% vs -1.7%!!! vs -0.7%; NYSE Financials +1.9% vs +1.6% vs -2.2%!! vs -1.4%! vs -0.3% vs -1.6%!!! vs -1%. NYSE Financial Leaders: BAC +3.4% vs +3.8% vs -4.4%!!! vs -3.3%!! vs +0.3% vs -3.1%!! vs -2%! Citi not a leader but since peaking at $38.40 on 3/19, it is still off 9.2% after closing up for a second day at $34.63, from Tuesday’s close of $32.86 (-14.4%)!!! !

European equity markets down, Asia up, for  second session  FTSE -0.4% vs -0.3% vs +0.7% vs -0.9% vs closed; CAC40 -1.1% vs -0.5% vs +1.4% vs -1.6% vs closed ; DAX -0.9% vs -0.1% vs +1.5% vs -1.1% vs closed; Nikkei +1.2%! vs +0.7% vs -0.8% vs -0.1% vs -0.81%; Hang Seng +1.8%!! vs +0.9% vs -1.1% vs -1.2% vs closed; Korean KOSPI +1.2% vs -0.4% vs closed vs -0.1% vs -1.6%; Indian Sensex DOWN 1.4% vs +0.8% vs -0.3% vs +0.1% vs -1.5%. U.S. stocks futures weaker: DOW -65; SPX -7.20; NDQ -12! Bonds rallying with 10’s once again near 2% but 30’s lagging 3%.10 yr 2.01% +3/8 vs low Tuesday of 1.98%! RECORD low 9/23 of 1.6855%; 30 yr 3.17 +13/16; Long TIP 0.75% +15/16. It was 0.57% at high. The 5 yr TIP yields MINUS 1.31%; 10 yr -.29%. Bills 0.07% 1 month; 0.08% 3 months, 6 months 0.12%. Reverse Repo 0.25%. 3 mo. Libor 0.47%, and 0.73%; steady.

Gold closed below $1700 for a 22nd straight session, but gained $20, making the hit $107 since 2/28, closing $1680.60 +$20.30.. 2/28’s $1792.70 intraday high was not seen since 11/16! It has been above $1600 since Jan. 31, which remains below major support!!! The record high is $1923.70, a buying climax on 9/6. Res is $1694, the 40 day and $1696, the 200 day, then $1703, the 50 day. It is now $1673.30 -$7.30. Crude rallied again, closing at $103.64 +.94. Tuesday’s low of $100.68 was worst since 2/15/12! It remains well below the range of $105-110 which had held since 2/21!!! RES still at the 50 day (104.11), the 40 day (105.49), and major support at $95.76, the 200 day, all still rising. Slightly weaker overnight, now $103.16 -.48. $101.08, the April 4 low is still minor support – Tuesday’s low $100.58!!! – lowest since 2/15/12!.

TB believes yesterday’s rally was due to the volatility and strong down move since the selloff. While we recovered about half the loss since the selloff began on 4/5, positions may have been squared already ahead of next Friday’s options expiry. Still, anything can happen between now and Tuesday, but expect a return to the downside before expiry.

As for Dow 13000, it finally hit it on 2/21, the day CNBC was throwing a celebration party (on the second time around?), but failed to close above it until 2/28! Then it dropped below from 2/29-3/12 (while VIX soared), before climbing back from 3/13-4/5 as money managers caught the fever and hedgies and high frequency traders outpaced them. Then it plunged again, but without the urgency of buying, TB does not believe the pattern will be replicated. You decide.

The VIX plunged, falling a big 2.82 to17.20 – about neutral and adding credence to positions being squared ahead of next weeks expiry. Tuesday’s intraday high of 21.06 – was highest since March 6 but that was before the quarterend rally and TB is betting no rational managers wants to add to positions this early in the quarter, especially if lagging due to not holding Apple (which has been in a modest decline of late. TB wrote to a client that owns Apple:

 

Apple has MAJOR support at $600…funny, this shows how algorithmic trading is driving it with the hedgies. Look below: $575. caused by gapping up on 3/14, then $550, $516, $500, $486, $450, $420, $422, $400, $377, $363 – where latest rally began! Not saying this will happen…more likely $575 is low on a big market sell-off. Remember: they sell what they can sell in a plunge…fundamentals go out the window.

 

TB believes Apple should declare a 10:1 stock split (just now Google announced a 2:1 split). Despite analysts and Warren Buffett’s admonishments that it is meaningless, both stocks are over $600 a share, they say it doesn’t matter since the dollar amount is the same. TB believes this to be false due to small buyers not wanting to concentrate that much of their portfolio in a single stock, so you widen your audience. That is why Google should also have done at least 5:1 or 10:1 and Apple the same. Not to mention dividend reinvestments which would end up buying more shares quicker.

TB recommends either staying sidelined or setting trailing stops…you decide.

. . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)

…what is Friday the 13th without Freddie? …or will he mastermind an intraday high above Dow 13k then begin yet another swoon? This time it could be worse without Apple to drive the rally. Don’t forget next Friday’s options expiration and given the sharp drop in volatility (VIX) yesterday, we could see 13k followed by a selloff as early as today.

To prove TB is not an ideologue, he believes the statement by Dem strategist, Hillary Rosen that Ann Romney “never worked a day in her life,” was not only stupid but had no bearing on her husband’s drive for the presidency. Unlike, Rush Limbaugh on the more serious calling a woman who testified for birth control a ‘slut’ and ‘prostitute’, she apologized before sponsors threatened to cost ole Rush money. Also, unlike the GOP, and Romney (“I wouldn’t have used those words” without condemning the statement), the Dem leadership countered (that is leadership, not being afraid to offend some extremist supporters).

But the more important issue is what has happened to our civility. What have we Americans become…un-American? American’s don’t do this! …or didn’t. But you haven’t seen anything yet. Wait until the presidential campaign goes into high gear.

Some of you may not like Tom Friedman but he wrote the first intelligent column TB has seen on solving the deficit. Also, unlike the extremists he blames Obama for not adopting Simpson-Bowles while condemning Paul Ryan’s claims that it is Simpson-Bowles. You can’t accept half of a plan and then claim it as cover. Here is the link: Friedman

The day that the Simpson-Bowles report was delivered to the White House, Obama beat a retreat leaving it to Obama. This was a fatal error. Had he endorsed it, as Friedman says, he would have set the stage for a debate over how to solve the budget crisis sensibly, over the strenuous objects of their idol, and extortionist, Grover Norquist. Instead, the money spoke and as if Main Street hasn’t suffered enough, the tax increase side of the solution was not only ignored but ridiculed (only $55 billion would be collected over the next ten years by raising taxes on the top 1% – TB would bet you that figure is low but to sneeze at that sum is ludicrous if in fact there is a crisis!).

For God’s sake people put your ideology aside and think about your children and grandchildren (an about kids and families of others, who would be torn apart by the Ryan Plan). All on a promise to close to the tax loopholes, but as Friedman points out they have not named a single specific one they would close. Why? Because of the extortionist, that’s why! It is time for the GOP leadership to start acting as adults and for the Dems to become realistic, but as long as ideology controls the right, it will not happen. This even as there is only a slim chance that the GOP can win the presidency (this from their own leadership). So now they are betting on controlling both houses and neutralizing Obama, a bad idea in a second term, but when people are uncertain they love splitting power between Congress and the presidency. TB concurs, so long as they start doing their job and compromising to find a fair, real, and lasting solution. So far, that is not in the cards.

How did we stoop so low as to allow superpacs and the candidates themselves to make politics a bloodsportby attacking anyone or anything that stands in the path of victory? Like most true Americans, TB is sick!

Lastly, the Best Buy saga continues. Today we learn that the company has hired two high-powered attorney’s, one a former SEC enforcement official, to pursue the investigation which at the least involves a female employee, and at worst is another Mark Hurd (HPQ) scandal. We have to wake up CEO’s to their responsibility..and it isn’t just to themselves. Moreover, we have to wake up the faux boards who are failing miserably to represent shareholders…Best Buy may be an exception…hopefully.

Have a great weekend! Monday will be a discussion of banking and the Volcker Rule.

TB

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