Interdum stultus opportuna loquitur...

Saturday, June 04, 2005

USRant: Breasts or Bombs - Which Is Obscene?

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Over the last two nights, I have seen two media outpourings that - taken together - form the perfect critique of our current situation. The first was the use of Lateline on the ABC to attempt to pre-empt War Crimes charges against an Australian SAS troop who engaged with non-combatants, killing a bunch of civilians. Lateline trotted out some bloke from the Irish Guards who had previously been convicted of War Crimes, and had him tell the viewership that civilians aren't in any position to understand the vicissitudes of the battlefield... to paraphrase: "bad shit happens in battle... things get pretty hard to differentiate, and when bad guys are trying to do bad things to you, you often have to do bad things back".

Well, the ABC's little Irish Guards chum is probably aware (he was an officer), there was a little kangaroo-court event in Nuremberg after WWII at which it was decided that his equivocation is just not acceptable. The Allies got all high and mighty about how war was to be waged (after they slaughtered way more civilians than the Axis did). Hypocrisy aside, they held their little Stalinesque mock-trial and pontificated about how bad War was.

Then, they wrote down what they thought, codifying some principles that are now Law. You can't say "I was just following orders", you cant say "Those civvies were in the road" or "They had guns". If they're not combatants, they are sacrosanct. In law, they ought to have the run of the battlefield without getting shot at.

I know, it's silly to assume that someone could walk through a battlefield in the middle of a conflict and expect to remain unharmed... but in Warsaw and Stalingrad during WWII that used to be called "going to the shops". You see, the Wehrmacht used routinely to execute their own men if they fired on non-combatants. You have to give the Germans one thing: they are sticklers for rules.

The Yanks - who led the prosecution at Nuremberg - now think that their Marines can shoot unarmed injured enemy in the head, in the middle of a religious building, and get away with it... the 'man' who did that did not get charged with anything ... on the basis that the graphic footage of the War Crime constituted 'insufficient evidence'.

So that's 'Media event #1' - the use of a government-funded station to attempt to justify a war crime. It's something we might expect to see in a History Channel story about the Nazi regime's use of public broadcasting for propaganda purposes.

Media event #2: some jerkwad radio jocks on Ray Martin (or was it Naomi Robson... I forget) complaining that "Big Brother" is 'offensive' because it shows the odd dick-or-boob shot after dark.

These two assholes think it's offensive to see perfectly normal, young, healthy bits of humanity strewn across the TV screen, and ACA (or TT) think it's newsworthy. What is their view of sending our most highly trained personnel to tear bits of humanity off of their normal attachments using high-powered projectiles, in ways that violate the Laws of War?

What is their view of the fact - now not in dispute - that the conflict was decided upon months in advance and all the 'UN inspections' bullshit was just for show? Where is their outrage about the fact that the little monkey-faced shitbag in the Lodge had his tongue so far up George Bush's sphincter that he couldn't tell the truth about the underlying motives for war, and let the war be debated on its merits? In fact, that same monkey-faced shitbag tried to have Andrew Wilkie's reputation destroyed when Wilkie resigned in protest (the mark of a man with some principles - a word so foreign to John Howard that it may as well be in Pashtun). In short, where is the outrage about our dying democracy?

I would much rather be bombarded with commercially-funded images of Janet Jackson's tit, or the mindless wankfest that is 'Big Brother', than have taxpayers money used to try and justify the fact that 'our boys' shot a bunch of civilians. When they do that', they're not 'our boys' any more - they are War Criminals. Either that, or we shut the fuck up when anyone performs a reciprocal violation of the Geneva Conventions (say, beheading a captive soldier or Western non-combatant).

It's the old hypocrisy - having some poor uneducated jerk charged for writing "Fuck You, Ho Chi Minh" on the side of a bomb, but giving a medal to the guy who drops the bomb on a village.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $2.5billion, overnight repurchase entirely in T-backed collateral. That was never going to be anything like enough, given the rather awful eco data.

The Jobs Report was awful: to recap -

  • only 78k new jobs compared with consensus for 190k;
  • unemployment rate dipped to 5.1% (due to discouraged jobseekers leaving the labour force); and
  • hourly earnings growing 0.2% (slower than inflation).

What was it that I mentioned yesterday about what happens when wages grow faster than productivity? Oh yes.... hiring falls.

So wages are in the 'horror zone' - growing faster than productivity, but slower than inflation. So fewer people get employed, and those that are employed are going backwards. What fun it is to live under centrally-planned crony-capitalism...

In addition, the ISM Non-Manufacturing survey slowed to 58.5 (expectations were for 61).

Major US Indices

The market didn't like the bad data, since it was unaccompanied by a half-pound of repo crack. The Dow Jones Industrial Average lost 92.52 points (0.88%), closing out the day at 10460.97 points - which means that for the week it lost just under 80 points. The index hit an intraday high of 10553.19 (at the open - and retested it twenty minutes later), and fell as low as 10448.41 with the low set at about 3:30 NY time.

Within the blue-chip index, only 2 stocks rose. The gainers were Boeing (BA, +0.43% to $64.66) and Hewlett Packard (HPQ, +0.18% to $22.72), which accounted for 2 Dow points between them Verizon was unchanged, and the other 27 Dow stocks fell, by International Business Machines (IBM, -2.02% to $75.79) and Mcdonalds (MCD, -1.96% to $30.51), with these two stocks contributing -16 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 302.2m shares to 11.4m.

The broader S&P500 declined 8.27 points (0.69%), to end the session at 1196.02. Within the index, gainers numbered 128, while 361 S&P500 stocks fell for the day. Volume was tilted 3.9:1 in favour of the losers with 1.20 billion units traded in the losers as compared with 307.29 million traded in the winners .

Over at Times Square, the Nasdaq Composite declined 26.37 points (1.26%), to close at 2071.43, while larger-cap technology issues fared worse with the Nasdaq100 losing 24.48 points (1.56%), to end at 1544.48 points. Within the tech benchmark, gainers numbered 14, while 84 Nasdaq100 stocks fell for the day. Volume was tilted 10.0:1 in favour of the losers with 602.61 million traded in the losers compared to 60.38 million in the winners.

NYSE Volume was chunky, with 1.63 billion shares changing hands, while Nasdaq Volume was reasonably solid, with 1.68 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Index Close Gain(Loss) %
Dow Jones Industrial Average 10460.97 -92.52 -0.88%
S&P500 1196.02 -8.27 -0.69%
Nasdaq Composite 2071.43 -26.37 -1.26%
Nasdaq100 1544.48 -24.48 -1.56%
NYSE Volume 1.63bn - -
Nasdaq Volume 1.68bn - -


My 9-stock "bellwethers" group fell by an average of 1.44%

  • General Electric (GE) -$0.20 (0.54%) to $36.70;
  • Citigroup (C) -$0.15 (0.31%) to $47.56;
  • Wal Mart (WMT) -$0.87 (1.8%) to $47.35;
  • I.B.M. (IBM) -$1.56 (2.02%) to $75.79;
  • Intel (INTC) -$0.26 (0.94%) to $27.33;
  • Cisco Systems (CSCO) -$0.48 (2.41%) to $19.40;
  • eBay (EBAY) -$1.25 (3.2%) to $37.80;
  • Fannie Mae (FNM) -$0.95 (1.6%) to $58.61; and
  • Freddie Mac (FRE) -$0.08 (0.12%) to $66.00.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 1827 to 1434, for a single-day A/D reading of -393; and Nasdaq losers exceeded gainers by 1915 to 1108. The 10-day moving average of the A/D line fell to 458.2 on the NYSE, while the 10dma of the Nasdaq A/D fell to 80.1.

On the NYSE declining volume was greater than volume in advancing issues by 1038.6 to 562.3 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1225.2 to 381.2 million shares.

198 NYSE-listed stocks rose to new 52-week highs, and 24 posted fresh 52-week lows, while on the Nasdaq there were 83 stocks that hit new 52-week highs, and 28 which fell to fresh 52-week lows.

Market Breadth Statistics

NYSE Nasdaq
Advancers 1434 1108
Decliners 1827 1915
Advancing Volume (m) 562.31 381.19
Declining Volume (m) 1038.57 1225.18
New Highs 198 83
New Lows 24 28

Market Sentiment Statistics
Index Close Gain(Loss) %
CBOE Volatility Index 12.15 0.31 2.62%
CBOE Nasdaq Volatility Index 15.59 0.64 4.28%
Equity Put-Call Ratio 0.79 0.05 6.76%
10-day PCR 0.70 0.02 3.5%
SPX-VIX Ratio 98.4 -3.28 -3.22%

Bond Market Analysis

After a truly massive spike following the jobs report (where the June T-bond futures contract hit 119&30/32), bonds fell throughout the session, with the 30-year finishing at 117&26/32... that is, the intraday range was over 2 points. You don't get that often, even when the spike high (or low) is generated by the hunting of stops after some data.

The yield on the benchmark 30-year Treasury bond rising 5.2 bps to 4.281%.

The middle of the yield curve was broadly lower in price too: five year yields rose to 3.731%, and ten-year yields rose to 3.979%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at 4.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 70.0 bps for 10-year AAA, and 98.0 bps for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly wider with the AAA-A spread on 20-years 6.0 bps tighter at 60.0 basis points and the 10-year AAA-A spread 8.0 bps tighter at -13.0 bps. So in answer to yesterday's little question "is the 10-year credit spectrum returning to sanity", the answer is a resounding 'No'.

Treasury Yields
Index Close Gain(Loss) %
UST 13wk (yld) 2.93 0 0%
UST 2Y (yld) 3.55 0.05 1.43%
UST 5Y (yld) 3.731 0.089 2.44%
UST 10Y (yld) 3.979 0.089 2.29%
UST 30Y (yld) 4.281 0.052 1.23%

The Banks Index slid 0.66 points (0.66%), to end the session at 98.62; within the index,

  • North Fork Bancorp (NFB) -$0.65 (2.34%) to $27.15;
  • Fifth Third Bancorp (FITB) -$0.88 (2.05%) to $41.97;
  • Golden West Financial (GDW) -$0.86 (1.39%) to $60.92;
  • Suntrust Banks (STI) -$0.91 (1.23%) to $73.32; and
  • Mellon Financial (MEL) -$0.33 (1.17%) to $27.80.

The Broker-dealer Index dipped 0.77 points (0.52%), at 146.68; the ticket clippers lined up as follows -

  • Jeffries Group (JEF) -$0.61 (1.68%) to $35.65;
  • E*Trade (ET) -$0.17 (1.35%) to $12.40;
  • Merrill Lynch (MER) -$0.62 (1.13%) to $54.15;
  • Legg Mason (LM) -$0.95 (1.09%) to $85.82; and
  • Bear Stearns (BSC) -$1.02 (1.03%) to $97.96.

The Philadelphia SOX (Semiconductor) index shed 5.81 points (1.32%), to 434.26

  • KLA-Tencor (KLAC) -$1.44 (3.07%) to $45.43;
  • Teradyne (TER) -$0.38 (2.75%) to $13.44;
  • ST Microelectronic (STM) -$0.35 (2.2%) to $15.53;
  • Micron Technology (MU) -$0.23 (2.08%) to $10.82; and
  • Xilinx (XLNX) -$0.58 (2.01%) to $28.22.

Gold & Silver Markets

Gold rose $2 (0.47%) to close at $423.70 per ounce. It's still rangebound.

Gold Bugs Index advanced 1.54 points (0.82%), at 190.47

  • Golden Star (GSS) +$0.10 (3.53%) to $2.93;
  • Glamis Gold (GLG) +$0.34 (2.27%) to $15.34;
  • Randgold Resources (GOLD) +$0.28 (2.22%) to $12.90;
  • Kinross Gold (KGC) +$0.11 (1.96%) to $5.71; and
  • Goldcorp (GG) +$0.27 (1.92%) to $14.32.

Silver fell by $0.03 (0.4%) to close at $7.51 per ounce. The Gold and Silver Index (XAU) gained 0.8 points (0.92%), closing at 88.15 points.

  • Kinross Gold (KGC) +$0.11 (1.96%) to $5.71;
  • Goldcorp (GG) +$0.27 (1.92%) to $14.32;
  • Freeport McMoran (FCX) +$0.57 (1.57%) to $36.82; and
  • Placer Dome (PDG) +$0.21 (1.51%) to $14.11.
Precious Metals and Indices
Index Close Gain(Loss) %
Gold 423.70 2.00 0.47%
Silver 7.51 -0.03 -0.4%
PHLX Gold and Silver Index 88.15 0.8 0.92%
AMEX Gold BUGS Index 190.47 1.54 0.82%

Oil Market

Oil was firmer, rising by $1.45 per barrel, closing at $55.03 per barrel. During the session it never traded below yesterday's closing price - it was a runaway train. What was it that I said over the last month or so? That the upcoming 'driving season' always resulted in rising oil and gas prices, and that the pullback was a good time to reset longs. That said, my timing was off by more than two weeks.

The Oil and Gas Index (XOI) gained 1.79 points (0.21%), to 843.81

  • Occidental Petroleum (OXY) +$0.70 (0.94%) to $75.42;
  • Sunoco (SUN) +$0.96 (0.91%) to $106.23; and
  • Marathon Oil (MRO) +$0.43 (0.87%) to $49.99.

The Oil service stocks (OSX) Index advanced 1.11 points (0.82%), to end the session at 137.27

  • Schlumberger (SLB) +$1.21 (1.73%) to $71.12;
  • Noble Corp (NE) +$0.97 (1.7%) to $57.89; and
  • Tidewater (TDW) +$0.51 (1.46%) to $35.36.
Energy Complex
Index Close Gain(Loss) %
Reuters CRB 306.7 2.54 0.84%
Crude Oil Light Sweet 55.03 1.45 2.71%
Heating Oil 1.5995 0.06 3.84%
Natural Gas 6.88 0.05 0.81%
Unleaded Gas 1.5571 0.04 2.85%
AMEX Oil Index 843.81 1.79 0.21%
Oil Service Index 137.27 1.11 0.82%

Currency Markets

USD Exchange Rates
Index Close Gain(Loss) %
US Dollar Index 87.99 0.16 0.18%
Euro 1.2222 -0.0043 -0.35%
Yen 107.67 -0.59 -0.54%
Sterling 1.8152 0 0%
Australian Dollar 0.7563 0.0021 0.28%
Swiss Franc 1.2522 0.0003 0.02%
Canadian Dollar 0.8019 0.0013 0.16%