Bear Mountain Bull

Last wrap of the year:

Internals were negative, with volume very light, as it has been all week. Advances/declines were 1 to 2 on the NYSE and 7 to 12 on the Nasdaq, with up/down volume 1 to 4 on the NYSE and 2 to 7 on the Nasdaq. New highs/lows were 177/2 on the NYSE and 108/13 on the Nasdaq.

Leaders — Gold/Silver (+0.08%), Disk Drives (-0.14%), Banks (-0.21%), Airlines (-0.29%), Semis (-0.41%), Broker Dealers (-0.55%), Telecoms (-0.62%), Oil Services (-0.65%)
Laggards — REITs (-1.89%), Transport (-1.79%), Paper (-1.79%), Hospitals (-1.66%), HMOs (-1.57%), Natural Gas (-1.47%), Utilities (-1.46%), Chemicals (-1.44%)

Treasury Yields — 6-Month: .19%,  2-Year: 1.14%,  5-Year: 2.68%,  10-Year: 3.84%,  30-Year: 4.64%

Energy Prices — Crude oil: $79.58/barrel,  Gasoline: $2.0600/gallon,  Natural Gas: $5.573/mmBTU

US Dollar Index — 77.938

Precious Metals — Gold: $1095.50/ounce,  Silver: $16.87/ounce,  Platinum: $1468.00/ounce

BMB Note:  
To be honest, I nearly forgot the market was even open today. A bit surprising to see the size of the drop, and it looks like most of it took place in the final 30-40 minutes. S&P is now back to that 1115-1120 area, back near the top of the recent range it had snuck out of — we’ll see what happens from here.

Have a great New Year’s Day!

Today’s free Chart of the Day:

As the zeros decade concludes, today’s chart presents the price performance of the Dow for each decade since 1900. So how do the 10 years just passed rank? As today’s chart illustrates, the performance of the Dow from the close of 1999 through 2009 was the second worst performance on record. Only the Great Depression decade of the 1930s was worse. The current zeros decade also shares an unfortunate outcome with the 1930s in being a decade during which the Dow actually ended lower than where it started. Happy new decade.

Gag me:

The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt.

If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.

Nuggets Gleaned

Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:

– For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.

– Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

– Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.

More Bailouts

– The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy — there are more bailouts to come.

– The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.

– Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.

– This group, among its many powers, can restrict the ability of a financial firm to trade for its own account. Perhaps this section should be entitled, “Yes, Goldman Sachs Group Inc., we’re looking at you.”

James Kunstler offers his ‘Forecast 2010′. Excerpts don’t really do it justice, so we present his intro. You’ll have to read the rest on your own.

There are always disagreements in a society, differences of opinion, and contested ideas, but I don’t remember any period in my own longish life, even the Vietnam uproar, when the collective sense of purpose, intent, and self-confidence was so muddled in this country, so detached from reality. Obviously, in saying this I’m assuming that I have some reliable notion of what’s real. I admit the possibility that I’m as mistaken as anyone else. But for the purpose of this exercise I’ll ask you to regard me as a reliable narrator. Forecasting is a nasty job, usually thankless, often disappointing – but somebody’s got to do it. There are so many variables in motion, and so much of that motion is driven by randomness, and the best one can do in forecasting amounts to offering up some guesses for whatever they are worth.

I begin by restating my central theme of recent months: that we’re doing a poor job of constructing a coherent consensus about what is happening to us and what we are going to do about it.

There is a great clamor for “solutions” out there. I’ve noticed that what’s being clamored for is a set of rescue remedies – miracles even – that will allow us to keep living exactly the way we’re accustomed to in the USA, with all the trappings of comfort and convenience now taken as entitlements. I don’t believe that this will be remotely possible, so I avoid the term “solutions” entirely and suggest that we speak instead of “intelligent responses” to our changing circumstances. This implies that our well-being depends on our own behavior and the choices that we make, not on the lucky arrival of just-in-time miracles. It is an active stance, not a passive one. What will we do?

Internals were mixed, on sickly volume. Advances/declines were 4 to 5 on the NYSE and 10 to 9 on the Nasdaq, with up/down volume 3 to 5 on the NYSE and 11 to 8 on the Nasdaq. New highs/lows were 144/2 on the NYSE and 96/9 on the Nasdaq.

Leaders — Semis (+1.46%), Comp. Hardware (+1.25%), Steel (+1.11%), Disk Drives (+0.76%), Biotechs (+0.39%), Comp. Tech (+0.36%), Broker Dealers (+0.35%), Network (+0.32%)
Laggards — Gold/Silver (-0.80%), Hospitals (-0.70%), Retailers (-0.53%), Telecoms (-0.50%), Natural Gas (-0.49%), Homebuilders (-0.46%), Banks (-0.26%), HMOs (-0.22%)

Treasury Yields — 6-Month: .18%,  2-Year: 1.08%,  5-Year: 2.61%,  10-Year: 3.79%,  30-Year: 4.61%

Energy Prices — Crude oil: $79.31/barrel,  Gasoline: $2.0592/gallon,  Natural Gas: $5.719/mmBTU

US Dollar Index — 77.911

Precious Metals — Gold: $1091.10/ounce,  Silver: $16.77/ounce,  Platinum: $1455.00/ounce

…working for the government.

It looks like a happy new year for you — if you’re a public employee.

That’s the takeaway from a recent Rasmussen poll that shows that 46 percent of government employees say the economy is getting better while just 31 percent say it’s getting worse. In contrast, 32 percent of those with private-sector jobs say the economy is getting better, while 49 percent it is getting worse.

Nearly half, 44 percent, of government employees rate their personal finances as good or excellent. Only 33 percent of private-sector employees do.

It sounds like public- and private-sector employees are looking at different Americas. And they are.

Private-sector employment peaked at 115.8 million in December 2007, when the recession officially began. It was down to 108.5 million last November. That’s a 6 percent decline.

Public-sector employment peaked at 22.6 million in August 2008. It fell a bit in 2009, then has rebounded back to 22.5 million in November. That’s less than a 1 percent decline.

This is not an accident; it is the result of deliberate public policy. About one-third of the $787 billion stimulus package passed in February 2009 was directed at state and local governments, which have been facing declining revenues and are, mostly, required to balance their budgets.

The policy aim, Democrats say, was to maintain public services and aid. The political aim, although Democrats don’t say so, was to maintain public-sector jobs — and the flow of union dues to the public employees unions that represent almost 40 percent of public-sector workers.

So there really are “two Americas”…

Link from Instapundit.

I guess it grows on trees — or seems like it when you can just take it out of the taxpayers’ pockets:

“Treasury plans GMAC cash infusion”

CR says “Just a few billion more. Nothing compared to AIG, Freddie and Fannie.” Yeah, sure. Just loose sofa change. Again, and again, and again…

Or so they think:

Wow, I know things are better than they were one year ago but are they so dramatically better with little downside risk? According to stock market newsletter writers the answer is yes. The level of Bears in today’s Investors Intelligence reading fell to 15.6% from 16.7% last week and is now at the lowest level since April 1987. Back then the bulls were right for another 6 months and then something bad happened. Combine this sentiment reading with the VIX at 20 and 2010 will be interesting, especially with the very likely prospect of higher interest rates. Bulls are at 51.1% and those expecting a correction but are long term bullish total 33.3%.

If you’ve got a spare minute or two, a couple of posts from The Big Picture:

Fannie, Freddie, Heading to Zero

The Place Where Reform Goes to Die

A late wrap for those three people that are bothering to pay any attention to the markets this week:

Internals were slightly negative, on very light volume. Advances/declines were just below flat on both exchanges, with up/down volume 2 to 3 on the NYSE and 4 to 5 on the Nasdaq. New highs/lows were 256/0 on the NYSE and 118/14 on the Nasdaq.

Leaders — Transport (+0.58%), Software (+0.32%), Chemicals (+0.17%), Defense (+0.10%), Network (+0.09%), Insurance (+0.01%), Broker Dealers (-0.04%), Health Care Products (-0.07%)
Laggards — Steel (-1.42%), Metals (-1.40%), REITs (-1.39%), Gold/Silver (-1.06%), Disk Drives (-1.06%), Comp. Hardware (-0.90%), Oil Services (-0.87%), Natural Gas (-0.86%)

Treasury Yields — 6-Month: .20%,  2-Year: 1.08%,  5-Year: 2.57%,  10-Year: 3.80%,  30-Year: 4.64%

Energy Prices — Crude oil: $78.79/barrel,  Gasoline: $2.1081/gallon,  Natural Gas: $5.814/mmBTU

US Dollar Index — 77.843

Precious Metals — Gold: $1095.90/ounce,  Silver: $17.07/ounce,  Platinum: $1463.00/ounce

…that you get to foot the bill for. If you’re not pissed about it, you should be.

The Enterprise blog:

It’s a favorite government trick to announce bad news on a Friday afternoon, so it appears in Saturday’s paper, the least likely edition to be read. By Sunday and Monday, it’s old news. The Obama Treasury just went one better, announcing on Christmas Eve that they were uncapping the amount they believe will have to be invested in Fannie and Freddie. The Bush Treasury first estimated the government-sponsored enterprises’ (GSEs) losses at $100 billion each. The Obama administration, which has been using the GSEs to stabilize the housing market by reducing their underwriting standards, upped the ante to $200 billion each. Now the administration has thrown in the towel completely, and dropped a large lump of coal in each taxpayer’s stocking—it won’t even try to estimate the total losses of Fannie and Freddie.

This is the culmination of an unprecedented policy disaster, inflicted on the American taxpayer by congressional supporters of Fannie and Freddie who refused over many years to approve new and tougher regulations for the two GSEs. Now that many of these folks are in charge of the House and Senate committees that deal with financial reform, they have suddenly found new respect for regulation and are trying to apply it to the entire financial system. Perhaps the American taxpayers, acting as voters in 2010, will decide that one disaster per career is all they should be allowed.

Link from Instapundit.

Update: Wonder why we have to bail the GSEs out, and take a bath in the process? Take a look at this chart… And the politicians won’t shut ‘em down. Matter of fact, they ask them to take on even more. It’s criminal.

The Big Picture quotes Barron’s/Stephanie Pomboy:

…she warns, the game is far from over. “As the clock starts on the New Year, the likes of exotic mortgage recasts, small-biz failures and state and local tax hikes will take the field. And the realization will dawn that none of our fundamental problems — most notably excess leverage — have been solved…And just as one could argue that markets were overly aggressive in discounting the end of existence as we knew it back in March, so, too, they may be guilty of anticipating our imminent arrival at Nirvana today.”

The agent of the great awakening will be gathering pressures on the credit market, as banks are “forced to re-provision, and resurgent delinquencies find Fannie and Freddie (and everyone else) putting ill-made mortgages back to lenders.”

Credit will grow dear and do so precisely as the demand for it from borrowers looking to roll over maturing obligations swells.

The numbers, Stephanie exclaims, are unbelievably big. Uncle Sam must roll over $2.5 trillion in debt during the next two years, banks worldwide have some $7 trillion due in the same stretch and commercial real estate will weigh in with another $750 billion.

For those that may care:

Internals were mixed on very light volume. Advances/declines were just better than flat on the NYSE but 4 to 5 on the Nasdaq, with up/down volume 5 to 4 on the NYSE but flat on the Nasdaq. New highs/lows were 439/4 on the NYSE and 211/16 on the Nasdaq.

Leaders — Hospitals (+0.75%), Chemicals (+0.69%), Oil Services (+0.49%), Health Care Products (+0.45%), Drugs (+0.44%), Health Care (+0.42%), Biotechs (+0.40%), REITs (+0.38%)
Laggards — Airlines (-1.79%), Homebuilders (-1.42%), Metals (-1.08%), Semis (-0.95%), Steel (-0.87%), Broker Dealers (-0.87%), Banks (-0.74%), Comp. Hardware (-0.55%)

Treasury Yields — 6-Month: .19%,  2-Year: 1.04%,  5-Year: 2.59%,  10-Year: 3.84%,  30-Year: 4.69%

Energy Prices — Crude oil: $78.71/barrel,  Gasoline: $2.0203/gallon,  Natural Gas: $5.995/mmBTU

US Dollar Index — 77.649

Precious Metals — Gold: $1106.10/ounce,  Silver: $17.51/ounce,  Platinum: $1480.00/ounce

A ‘happy holidays’ note to Ben Bernanke from Ron Coby:

Dear Mr. Bernanke,

Now that you’ve been referred to as an “overlord” and made “person of the year” by Time magazine, I wanted to be quick to congratulate you. From what I read in Time, you’ve apparently “saved the world” from a systemic collapse. In your own words “we came very, very close to a depression.” For me it’s simply history repeating itself all over again, but on two fronts. First, we’re repeating the Greenspan years, but with you as the new “Maestro” and the second repeat is that of the 1930s.

n reference to the Greenspan years, Time apparently has a very short memory. I know you remember your predecessor was hailed as the greatest Fed Chairman in world history only to be completely discredited during the financial crisis right in front of Congress. I guess Time didn’t know that you were Alan Greenspan’s co-captain of the US Titanic that steered the global economy into a gigantic economic iceberg in 2008. It would appear that you’re now a co-captain with Mr. Tim Geithner, steering our economy right into the biggest iceberg of all — a United States fiscal funding crisis. It certainly is a good thing we have you at the helm to monetize the insanity in Washington. You better get those printing presses ready to purchase much of the $1.8 trillion in government debt needed to be refinanced next year and the $2 trillion of newly issued debt in order to keep the insanity in Washington alive.

—

Apparently this moral hazard has spread to Congress as they just raised the government debt ceiling to nearly 13 trillion dollars. The good news is that Congress can depend on you to continue bailing them out. That number may not be scary to you but it’s scaring the heck out of our government’s creditors — like China. The first evidence of that was the US dollar getting sold down hard. Now it’s the bonds that are being dumped, and after that, stocks will follow.

—

The second repeat of history is simply that of the 1929 crash in 2007-2009, but in slower motion. The gigantic rally since March is also repeating the huge rally after the 1929 crash. Fortunately we have a Fed Reserve chairman like you who will monetize any declining asset in his way to prevent a 1931-1932 89% stock market collapse. However, this repeated grand experiment of mass money creation as well as the moral hazard on Wall Street will be very interesting to watch unfold over the next few years. The ramifications of your actions and those in Washington DC will either be a coming US dollar crash or a bond market crisis from multiple failed treasury auctions.

In summary, as Time said, you certainly “put the punch bowl on the table” and you’ve also spiked the heck out if it with ultra-low interest rates and unconventional means of mass money creation. Now that you’ve forced everyone into the stock market, you better make sure we don’t repeat the collapse that happened after that giant Wall Street rally in early 1930. Unfortunately for you, Dr. Bernanke, a choice will have to be made in 2010. Will you continue to juice the stock market at the risk of an imploding bond market, or let the stock market fall by hiking rates to save the bond market from 1970s-like inflation?

Happy holidays,

Ron

…but “not to be applauded”. You can say that again:

“What the average citizen doesn’t explicitly understand is that a significant part of the government’s plan to repair the financial system and the economy is to pay savers nothing and allow damaged financial institutions to earn a nice, guaranteed spread,” said William H. Gross, co-chief investment officer of the Pacific Investment Management Company, or Pimco. “It’s capitalism, I guess, but it’s not to be applauded.”

Mr. Gross said he read his monthly portfolio statement twice because he could not believe that the line “Yield on cash” was 0.01 percent. At that rate, he said, it would take him 6,932 years to double his money.

C’mon Bill. You’re the “bond king”. Don’t tell me you couldn’t believe yields were at zero — like you had no idea. And yeah, it sucks.

Link from Instapundit.

From Barry at The Big Picture:

I do not agree with everything Austrian Economics preaches — but I believe they are dead right when it comes to the way to handle insolvent banks.

This week’s Barron’s has a short interview with Kevin Duffy and Bill Laggner of Bearing Asset Management.

I really like Kevin’s quote on the bank rescues:

“Any healthy system needs a way to correct error and remove waste. Nature has extinction, the economy has loss, bankruptcy, liquidation. Interfering in this process lengthens feedback loops. Error and waste are allowed to accumulate, and you ultimately get a massive collapse.

Capitalism is primarily attacked by two groups: utopians who wish to impose a more “compassionate” system, and political capitalists who want to enjoy the fruits of success without bearing the pain of failure. They use the coercion of the state to gain privileges, at the expense of everyone else.

As a country we’ve become less tolerant of economic failure. The result has been a series of interventions, such as meddling in the credit markets, promoting homeownership and creating a variety of safety nets for investors. Each crisis leads to an even greater crisis. The solution is always greater doses of intervention. So the system becomes increasingly unstable. The interventionists never see the bust coming, then blame it on “capitalism.”

-Kevin Duffy, Bearing Asset Management.

Good stuff . . .

Spot on. Couldn’t have said it better myself. No really, I couldn’t have.

Notes on the latest moves in the industry groups:

• The year-end market sprint has sent some groups into mini-meltup mode, while others still struggle, mainly the financials, precious metals and some energies.
• You can have a look at all of the group charts here: set #1 — set #2 — set #3 — set #4.
• For a more detailed breakdown of group movement over various time periods, try Prophet.net’s Industry Rankings page., the Industry Group Tracker at WSJ Online, or the industry group tools at Finviz.com.

Mark Steyn on health care ‘reform’:

In Canada, once the wait times for MRIs and hip surgery start creeping up over two years, the government distracts the citizenry with a Royal Commission appointed to study possible “reforms” which reports back a couple of years later usually with recommendations to “strengthen” the government’s “commitment” to every Canadian’s “right” to health care by renaming the Department of Health the Department of Health Services and abolishing the Agency of Health Administration and replacing it with a new Agency of Administrative Health Operations which would report to a reformed Council of Health Policy Administrative Coordination to be supervised by a streamlined Public Health Operations & Administration Assessment Bureau. This package of “reforms” would cost a mere 12.3 gazillion dollars and usually keeps the lid on the pot until the wait times for MRIs start creeping up over three years.

The other alternative is what the British did earlier this year: They created an exciting new “Patient’s Bill of Rights,” promising every Briton the “right” to hospital treatment within 18 weeks. Believe it or not, that distant deadline shimmering woozily in the languid desert haze can be oddly reassuring if you’ve ever visited a Scottish emergency room on a holiday weekend. And, if the four-and-a-half months go by and you still haven’t been treated, you get your (tax) money back? Ah, no. But there is a free helpline you can call which will give you continuously updated estimates on which month your operation has been rescheduled for. I mention these not as a preview of the horrors to come, but because I’ve come to the bleak conclusion that U.S.-style “health” “reform” is going to be far worse.

We were told we had to do it because of the however many millions of uninsured, yet this bill will leave some 25 million Americans uninsured. On the other hand, millions of young fit healthy Americans in their first jobs who currently take the entirely reasonable view that they do not require health insurance at this stage in their lives will be forced to pay for coverage they neither want nor need. On the other other hand, those Americans who’ve done the boring responsible grown-up thing and have health plans Harry Reid determines to be excessively “generous” will be subject to punitive taxes up to 40 percent. On the other other other hand, if you’re the member of a union which enjoys privileged relations with Commissar Reid you’ll be exempt from that 40 percent shakedown. On the other other other other hand, if you’re already enjoying government health care, well, you’re 83 years old and, let’s face it, it’s hardly worth us giving you that surgery for the minimal contribution you make to society, so in the cause of extending government health care to millions of people who don’t currently get it we’re going to ration it for those currently entitled to it.

Looking at the millions of Americans it leaves uninsured, and the millions it leaves with worse treatment and reduced access, and the millions it makes pay significantly more for their current health care, one can only marvel at Harry Reid’s genius: government health care turns out to be all government and no health care. Adding up the zillions of new taxes and bureaucracies and regulations it imposes on the citizenry, one might almost think that was the only point of the exercise.

—

There is no reason on earth why Nebraska should be the only state in this Union to have every dime of its increased Medicare tab picked up by the 49 others. So either that privilege will be extended to all, or to favored others, or its asymmetry will be balanced by other precisely targeted lollipops hither and yon. Whatever happens, it’s a dagger at the heart of American federalism, just as the bill’s magisterial proclamation that the Independent Medicare Advisory Board can only be abolished by a two-thirds vote of the Senate strikes at one of the most basic principles of a free society — that no parliament can bind its successors.

These details are obnoxious not merely in and of themselves but because they tell us the truth about where we’re headed: Think of the way almost every Big Government project bursts its bodice and winds up bigger and more bloated than its creators allegedly foresaw. In this instance, the stays come pre-loosened, and studded with loopholes. Because the Democrat operators — the Nancy Pelosis and Barney Franks — know that what matters is to get something, anything across the river, and then burn the bridge behind you.

Update — And this from Jay Ambrose:

About all advocates can do is tell you what’s wrong with the present system even though the legislation we’ve seen does not even try to address some of those issues and is, at the same time, so massive and clumsy that its unintended consequences could go every which direction – including the direction of human tragedy. To the elderly in particular, I say: Watch out.

How in the world did we get so close to something like this? Part of it has to do with what the French writer Alexis de Tocqueville warned about when visiting this fledgling democracy in the early 19th century – that this “American republic will endure until politicians realize they can bribe the people with their own money.” We’ve already created a welfare state with programs about to go bankrupt, and this will take us even closer to that denouement as still more freebies are extended across a wide swathe of Americans. Deficits will increase and taxes will go up, and many will see higher premiums than they’ve previously seen as their insurance policies take care of others beside themselves, even though some of those “others” are richer.

All of the Sector SPDRs enjoyed a little ‘holiday cheer’ this week — the Financials are still the worst of the bunch:

The numbers as we bring down the curtain on ‘09:

Charts courtesy of StockCharts.com

I saw this at NRO, and it was presented as ‘liberal vs. conservative’, but I don’t see it that way so much as being “politically correct” vs. just being real.

The PC message:

Please accept with no obligation, implied or explicit, my best wishes for an environmentally conscious, socially responsible, low-stress, non-addictive, gender-neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasion and/or traditions of others, or their choice not to practice religious or secular traditions at all. I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2010, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make America great. Not to imply that America is necessarily greater than any other country nor the only America in the Western Hemisphere. Also, this wish is made without regard to the race, creed, color, age, physical ability, religious faith or sexual preference of the wishee.

But to heck with that baloney — here’s the message from BMB:

MERRY CHRISTMAS AND A HAPPY NEW YEAR!

Enjoy the holidays!

I know we said we wouldn’t be posting for a couple of days, but when this kind of news is slipped out after the market closes on the day before Christmas, it bears mentioning.

Our gov’t says that their support for the mortgage market has no bounds, for all practical purposes:

The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.

The Treasury Department said Thursday it removed the $400 billion financial cap it will provide to keep the companies from failing. Already, taxpayers have shelled out $111 billion to the pair.

Treasury Department officials said the $400 billion limit would be replaced with a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors.

—

The news follows the announcement Thursday that Fannie’s and Freddie’s chief executives could get paid as much as $6 million for 2009, despite the companies’ dismal performances this year.

Notice how the Treasury seems to do whatever it wants, whenever it wants, without any oversight or approval from anyone else.

So our fearless ‘leaders’ are taking over the car business, the health care and insurance business, and the mortgage business. What’s next?

For what it’s worth:

Internals were positive, with volume ‘holiday weak’. Advances/declines were 7 to 3 on the NYSE and 13 to 6 on the Nasdaq, with up/down volume 5 to 3 on the NYSE and 3 to 1 on the Nasdaq. New highs/lows were 375/1 on the NYSE and 210/11 on the Nasdaq.

Leaders — Gold/Silver (+3.27%), Metals (+3.03%), Steel (+2.57%), Commodities (+1.73%), Internet (+1.63%), Disk Drives (+1.61%), Oil Services (+1.54%), Airlines (+1.46%)
Laggards — Banks (-1.13%), Health Care Products (-0.43%), Defense (-0.09%), Health Care (-0.07%), Drugs (-0.04%), HMOs (-0.03%), Telecoms (+0.01%), Utilities (+0.05%)

Treasury Yields — 6-Month: .17%,  2-Year: .92%,  5-Year: 2.48%,  10-Year: 3.75%,  30-Year: 4.61%

Energy Prices — Crude oil: $76.53/barrel,  Gasoline: $1.9845/gallon,  Natural Gas: $5.841/mmBTU

US Dollar Index — 77.912

Precious Metals — Gold: $1086.60/ounce,  Silver: $17.09/ounce,  Platinum: $1419.00/ounce

BMB Note:  
Just a couple of weeks ago, I didn’t think there was any way we’d see the Russell back at new highs. Yet there it is now, along with the Nasdaq and the S&P, with the Dow now lagging — but only by a bit. Go figure.

Volume this week has been predictably pathetic. As such, with only a half-day of trading tomorrow and Friday off, BMB will be going silent for a couple of days.

Enjoy the holiday, and best wishes to you, your family and friends.

In the housing market, between existing sales and new sales:

“Existing Home Sales up Sharply in November”
“New Home Sales Decrease Sharply in November”

Arguments on both sides of the tape, according to Michael Kahn:

I cannot quantify it but there are as many reasons – technically – to buy stocks now as there are to sell them. From good reactions to economic news (GDP revised down) and nagging problems around the world with debt to crappy volume and lack of momentum. Cycle A says we are at a low. Cycle B says we are at a high. COT reports are scary bearish. Sentiment perhaps is neutral. Flight to safety in T-bills, T-bonds and big cap stocks is over.

Pick your poison because relying on any one of them will kill you. If I were not in the advice game I’d have closed my PC – save for waiting to buy my gold back – last week. I could use the rest, that is for sure.

And of course, there’s the sudden strength in the dollar…

Internals were positive, with volume dwindling. Advances/declines were 12 to 7 on the NYSE and 3 to 2 on the Nasdaq, with up/down volume 3 to 2 on the NYSE and 7 to 3 on the Nasdaq. New highs/lows were 303/5 on the NYSE and 181/24 on the Nasdaq.

Leaders — Airlines (+4.56%), Homebuilders (+2.25%), Biotechs (+1.73%), Paper (+1.72%), Disk Drives (+1.39%), Metals (+1.30%), Broker Dealers (+1.17%), Hospitals (+0.99%)
Laggards — Utilities (-0.79%), Oil Services (-0.29%), Comp. Hardware (-0.07%), Internet (+0.04%), Banks (+0.12%), HMOs (+0.14%), Gold/Silver (+0.31%), Health Care (+0.35%)

Treasury Yields — 6-Month: .16%,  2-Year: .90%,  5-Year: 2.46%,  10-Year: 3.75%,  30-Year: 4.61%

Energy Prices — Crude oil: $74.03/barrel,  Gasoline: $1.8873/gallon,  Natural Gas: $5.724/mmBTU

US Dollar Index — 78.271

Precious Metals — Gold: $1082.60/ounce,  Silver: $16.95/ounce,  Platinum: $1395.00/ounce

BMB Note:  
A few items of note:

• US indices edging to marginal new highs.
• Euro still tanking, dollar rallying. Hasn’t caused stocks to come apart yet.
• Shanghai composite failed to match summer highs, now back below the 50-day. Chinese stock inverse ETF (FXP) pausing after coming up off lows, moving avgs turning up.
• Bonds struggling again, yields higher. Continued higher interest rates could throw a real monkey wrench into the works.