Friday, March 5, 2010

03.04.10 Cashin’s Comments AN ENCORE PRESENTATION $UBS

On this day in 1849, there occurred an event that gave rise to another of the twelve great barroom puzzlers - - "Was there ever a guy who was President of the United States for twenty-four hours?" Actually, it was an event that actually didn't take place that caused this oddity to happen.

Prior to FDR, Inauguration Day occurred on March 4th (due to longer travel times by horse and wagon). This particular March 4th fell on a Sunday and the newly elected President, Zachary Taylor, refused for religious reasons to take an oath on a Sunday. So, since the term of the former president expired at noon….and the new guy wouldn't take the oath till Monday....the oval office would be empty.

The Succession Act of 1792 had provided for just such a problem (gotta love those Founding Fathers). The vacancy was to be filled by the President ProTem of the Senate. Interestingly, the Senate had elected a Missouri Senator, David Rice Atchison, to that post only two days earlier.

The White House logs indicate that during his twenty-four hour term as President, Atchison did neither tax nor spend. Rather he slept through the day. Ah! For such a benign presidency these days.

Railroad buffs and song buffs will note that this "One Day Prez" lives on as a part of "the Atchison, Topeka and Santa Fe." (Made famous by Judy Garland in a film called “The Harvey Girls”.) Traders wondered and markets wandered as another trading day came to a close.

Yesterday’s stock market seemed as inconsequential as Atchison’s day in office. But,
that impression might be a bit deceiving.

Another Late Day Fade Stymies The Bulls – For the second straight day, an early rally in stocks evaporated in the afternoon. Again, the S&P climbed above the 1120 level, only to slip back below it by the close.

On Tuesday, I had told Carl Quintanilla that the bulls needed to close the S&P above 1120 in order to set up a possible retest of the January highs. The Dow also appears to be struggling with 10,425.

The TV pundits cited several potential reasons for the late day pullback. Many claimed it was the 2:00 release of the Fed Tan Book. A few even cited the President’s TV presentation on health care. In both cases, we think it was more coincidence than causality.

On Tuesday, the rally evaporated right around 2:00 also. In both cases it looked like exhaustion more than anything else. Whatever the cause, the late fade frustrated the bulls and gave the bears a little wiggle room.

An Experienced Perspective – Our UBS colleague, George Magnus, has an op-ed column in today’s FT. He opines on the on-going crisis and how it may play out in places like Greece and the U.K. We can’t fit the whole piece but here’s some of the opening:

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