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Wednesday, April 17, 2024

Merry Christmas Eve

First of all, what are you doing here?

Why it’s Christmas Eve, Mr. Scrooge – Most global markets are having a half day so, if you are waiting for a Santa Clause rally on a half-day’s trading, you are very likely to be disappointed.

Remember Marley, who cried: "Business!  Mankind was my business. The common welfare was my business; charity, mercy, forbearance, and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"

Marley was a man who worked and worked until the day he died and regretted it every day after.  If you don’t believe in an afterlife and you don’t believe in leaving behind the World a better place than you found it, at least find some time for yourself so people don’t call you "a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner!" 

Those covetous old sinners in Congress passed the Health Care Bill in the Senate today with a 60-39 vote (Republican Jim Bunning did not vote against the bill but was too chicken to actually vote for it) so we can pretty much count on it moving through the House and on to Obama’s desk in the very near future.  While it’s a total botch-job of a bill, at least America has taken the first civilized strep to recognizing that health care is a right and not a privilege – Tiny Tim would be very proud!

We were told by Fox that Health Care reform would destroy the universe but the market has taken the December passage of the bill very much in stride so maybe we should have just gone for it with Universal Health Care after all…  Oh well, maybe next year!  Meanwhile, we’ll be looking for good investing opportunities once we get a handle on the final bill but I still favor the device space (IHI, MDT, BSX, JNJ, GE, ISRG) as well as big pharma (MRK, PFE), who will be able to serve tens of millions of new customers.  Hospitals (UHS, THC) should also start filling up and we always like our CELG as well as AMGN, who should also benefit from adding a population the size of England to the health care rolls right here in the USA.  I’m waiting for the final bill but home health care providers (AMED, ADUS, GTIV) also look like winners so lots of fun investing opportunities in one of the fastest growing markets on Earth – US citizens who have access to health care!

I’m also done being a grinch about the economy in general as we are over our technical levels and, despite the non-existent volume, if we do manage to hold up through the first week of January, there will be nothing to do but go with the flow in 2010.  For the moment, we’re still pretty darn bearish in anticipation of possibly worse than expected Jobs and Durable Goods reports today but a 20% miss in GDP Tuesday and a 25% miss in Housing Starts yesterday didn’t seem to bother the bulls so why should another 450,000 job losses and a few less washing machine sales?

Despite the total lack of home building in America, copper flew all the way up to $3.25 in overnight trading, erasing almost an entire month of losses all in a single, low-volume rally – yet no arrests will be made.  In fact, the Hang Seng rallied, led higher by metal producers and getting back over the 21,500 mark and the Nikkei broke their own 10,500 mark as the dollar held 91 Yen despite the sell-off yesterday.  That put Japanese exporters very much in the Christmas spirit, especially with rumors circulating in Asia that the US GDP will jump to 4.5% in Q4 based on yesterday’s petroleum inventories.

Bah, humbug you say?  Well maybe so but but oil jumped to $77.50 in overnight trading as news spread of a 4.9Mb draw in crude stocks last week.  I thought that number seemed like nonsense and I did a little research and found out it’s not nonsense at all.  It turns out the number you are being presented with is total unmitigated bullsh*t!  Without going into a big thing let’s just focus on one simple fact – America imports oil.  How much oil do we import?  Usually around 10Mb a day to supplement our own production.  How much oil was imported last week?  Why just 8Mb a day, 1.5Mbd less than the same week last year.

What happens when you fail to deliver 10.5Mb of oil during a week?  Well, oddly enough we don’t get a 10.5Mb draw in our record stockpiles (327.5Mb) but we did get a 4.9Mb draw and that allows the NYMEX crooks to pretend there is demand while Criminal Narrators Boosting Crude cut to the NYMEX at virtually every commercial break so Sharon can gush about how the market is roaring back.  This isn’t just poor journalism – this is a criminal deception of the American people and the $5 jump in crude since last week costs global consumers $430M a day – merrry friggin’ Christmas to us

Adding insult to grievous injury to our economy, the US refining cartel not only ran at just 80% capacity (after Katrina and Rita they were at 85%), depriving us of refined products but imports of refined petroleum products were also cut by 600,000 barrels a day from last year.  That’s another 4.2Mb a week that they short-changed us in order to jack up the prices!  Our total imports were down 2.2Mb a day, which is down 15.4Mb for the week – almost an entire day of American usage parked offshore in tankers so JPM and GS can put the squeeze on us for another few billion in bonus money – yet no arrests will be made…

Please take the time to send this information as a Christmas card to your Congresspeople, the official EIA PDF is simple enough to read and the damage that is being done to our economy is evident to anyone who has to fill up a tank of gas this weekend as once again they jack up the prices ahead of holiday weekend driving in order to rip off as many people as possible.  By the way, if you have a credit card that guarantees you a better price if the product you buy goes down in price after you buy it – use it to buy gas and demand a refund when these BS prices come down – maybe we can get AXP on our side in fighting this nonsense

Also boosting commodities this morning is Gang of 12 member BCS, who announced that Central Banks will avoid the dollar in 2010 to stop it from rallying.  And, of course, there is renewed speculation that our own Fed will keep rates near zero for at least another year.  There’s nothing like speculation about what Central Banks will do to take the steam out of a currency move and BCS managed, as I noted earlier, to push copper all the way back to $3.27 and gold touched $1,107, up $20 from yesterday’s low.  If this sounds like the same nonsense that was used to drive down the dollar this summer – it is – but it worked then and the IBanks will go back to the well again and again until investors wise up, which is often never…

Durable goods came in up huge at 2% ex-auto, way better than 1.1% expected but, including autos, we were up just 0.2%, way less than the up 1.2% expected.  Jobless claims for the week before Christmas came in right at 452,000, which is the lowest level since last September so yay, I guess.  

There’s a great story in the USA Today this morning about how Detroit is very concerned about our nation’s orphans.  No, not the poor children who have no parents – they couldn’t care less about them.  What they do care about is the 3M orphaned customers who either lost their dealer because of closings in 2009 or whose current car brand is going out of business.  Urban Science, a consultant firm in Detroit, says 1,467 dealers closed in 2009. The bulk were General Motors or Chrysler dealerships. They were forced out of business when the car makers filed for bankruptcy and could close weak dealers. GM is killing the Pontiac, Saab and Saturn brands. Its Hummer brand will likely be sold to a Chinese company. That leaves Pontiac, Saab and Saturn customers needing a new place to service their cars.  This will be an interesting marketing story to follow next year!

Have a very Merry Christmas – it’s been a wonderful 2009 for the markets and we’re fininshing up over 20% if this holds up.  Can we make another 20% in 2010?  I’m still a bit skeptical but the recovery has already been miraculous and we’ll be going over ways to protect ourselves over the weekend as we get ready for what will hopefully be a happy New Year!



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