Uncategorized

Wednesday, August 15, 2012 – I’ve Never Been to Spain and I’ve Never Seen a Flash Flamenco

I’ve Never Been to Spain and I’ve Never Seen a Flash Flamenco– by Sinclair Noe DOW – 7 = 13,164SPX  + 1 = 1405NAS + 13 = 303010 YR YLD +.08 = 1.80%OIL -.07 = 94.26GOLD + 4.10 = 1604.10SILV un = 27.93PLAT un = 1400.00 JPMorgan Chase, Barclays, UBS,  Deutsche Bank, Royal Bank of Scotland, HSBC Holdings, and Lloyd’s are the seven banks subpoenaed in the past week in New York and Connecticut’s investigation into alleged manipulation of Libor. Citigroup and UBS received subpoenas earlier this year as part of the investigation. New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating alleged manipulation of the London interbank offered rate, or Libor.  Meanwhile, HSBC has handed over details of current and former employees to the US authorities as part of a tax probe that almost sank rival bank UBS in 2009. As a result, the bank may be sued by the former employees claiming banks infringed the criminal code and Swiss privacy laws. HSBC claims it has avoided breaching strict Swiss banking secrecy laws by redacting from the documents any information that could lead to the identification of clients. Yesterday, I told you that Standard Chartered had reached a settlement with New York State regulators. There will be no criminal prosecutions as a result of the settlement, mainly because the New York state regulator doesn’t have prosecutorial powers. You may also recall that when this story broke last week, one of the first things …

READ MORE →

Tuesday, August 14, 2012 – Go Figure

Go Figure– by Sinclair Noe DOW + 2 = 13,172SPX – 0.18 = 1403NAS – 5 = 301610 YR YLD +.07 = 1.73%OIL +.60 = 95.30GOLD – 10.90 = 1600.00SILV un = 27.93PLAT + 12.00 = 1403.00 I have always been fascinated with Pi; not the apple or blueberry pie (although that’s good), rather Pi, the ratio of a circle’s circumference to its diameter. Pi is considered a transcendental number; you can’t square the circle. It is an irrational number which cannot be expressed as a ratio of two integers. The number is 3.141, but that’s just the beginning. It is a number that cannot be fully expressed. People have tried. Mathematicians have used computers to extend the decimal out to 10 trillion digits, and then they give up; the decimal representation never ends and it never repeats; the number appears random but there has never been proof of the randomness. As best we know, Pi is infinite, and yet the definition of Pi relates to the circle, which is a closed loop. There are links to Pi in music and in the pyramids and in scripture and most likely in all sorts of things we haven’t yet begun to understand. Go figure. The US Census Bureau population clock hit 314,159,265; which is 100 million times Pi. Beyond the obvious conclusion that there are more births than deaths, I don’t know what it means. Maybe the world is more inscrutable; maybe it has always been so.  The next time you’re …

READ MORE →
Uncategorized

Monday, August 13, 2012 – The World Slows Down but Refuses to Admit or Deny Slowing

The World Slows Down but Refuses to Admit or Deny Slowing– by Sinclair Noe DOW – 38 = 13,169SPX – 1 = 1404NAS + 1 = 302210 YR YLD +.01 = 1.65%OIL +.01 = 92.74GOLD – 10.60 = 1610.90SILV – .30 = 27.93PLAT – 13.00 = 1391.00 The S&P 500 closed slightly negative, but the interesting part was the volume, or the lack thereof on the New York Stock Exchange. It was the lowest non-holiday-trading day volume in over a decade; only 380 million shares changed hands. You’ve got to wonder if the problems with Knight Capital last week have exposed a problem. Clearly something broke with Knight’s algorithm software glitch. Could it be that the volume on the exchange has been artificially inflated? Yep. And what did we get for having a company like Knight Capital scalping with High Frequency trades? We all lost a little.  The S&P 500 and Dow have risen every week for the past five weeks. The S&P 500 last wrapped up a five-week climb in mid-March. The Dow hasn’t done so since last October. The Dow has fallen for 10 out of the past 11 Mondays, and the S&P 500 has finished down five of the last six. Japan’s economy grew in the second quarter at a 1.4 percent annual rate, slower than expected. Last week, China released dismal figures on retail sales and exports in July. There was some speculation Beijing would roll out stimulus measures over the weekend. That did not happen. …

READ MORE →
Uncategorized

Friday, August 10, 2012 – The Case for Silver and a Few Odd Notes

The Case for Silver and a Few Odd Notes-by Sinclair Noe DOW  + 42 = 13,207SPX + 3 = 1405NAS + 2 = 302010 YR YLD- .04 = 1.65OIL – .15 = 94.69GOLD + 3.50 = 1621.50SILV -.01 = 28.23PLAT – 14.00 = 1404.00 The case for silver:  April last year, silver peaked just shy of $50 an ounce, and then fell back hard. Since then, silver has been either off the radar or hated. It has been hovering around $27 since May, testing people’s patience. As a rule, silver prices usually follow the direction of gold. But as long time silver investors recognize, the moves are amplified both on the downside and the upside. Silver prices are simply more volatile than gold prices. Already in this decade, silver has risen by a factor of 12 from its ten-year low ($48.70 vs. $4.07), while gold has seen about a sevenfold climb ($255.95 vs. $1,895).  The three biggest silver corrections in the current bull market average to 42.1%. Silver corrections are deeper and nastier and take longer for recovery. The average 42.1% correction took 98 weeks and 4 days to recover; using the same ratio, a 46.3% correction would take 108 weeks and 3 days. Counting from the previous peak of April 28, 2011, we wouldn’t break the $48.70 high until May 26, 2013. Based on this same correlation of corrections to recovery in the gold market, we can expect gold to challenge old highs in the October to November time frame. …

READ MORE →
Uncategorized

Thursday, August 09, 2012 – Rogue Regulators, Media Manipulators. What to Do? Turn on the AC and Chill Out While You Still Can

Rogue Regulators, Media Manipulators. What to Do? Turn on the AC and Chill Out While You Still Can-by Sinclair Noe DOW – 10 = 13,165SPX  + 0.58 = 1402NAS  + 7 = 301810 YR YLD + .05 = 1.69OIL -.11 = 95.16GOLD + 4.40 = 1618.00SILV + .10 = 28.24PLAT + 2.00 = 1418.00 So, you’re Standard Chartered Bank and you know you’ve got a problem with money laundering for the Iranians, but you charged a pretty pence and you’ve had you’re people talking to the US regulators and they seem to have it under control, and then some up and comer from New York state jumps in and threatens to revoke your charter.  What do you do? Well, first step is to return from vacation in the south of France, next step is to hire Sullivan and Cromwell and act contrite and surprised that there is any problem at all; next step is to hire Promontory Financial Group, a Washington D.C. consulting firm run by Eugene Ludwig, who served as US Comptroller of the Currency. Promontory reviews Standard Chartered’s transactions tied to Iran and informs regulators that the maximum amount of possible improper transactions might at the outside be $14 million, not the originally reported $250 billion, and seriously, what is all the fuss about a measly $14 million. You can’t expect a bank to keep track of every dollar.  Promontory has created a specialty niche business conducting independent reviews in rogue trader cases. And it turns out that …

READ MORE →
Uncategorized

Wednesday, August 8, 2012 – Rogue Regulators, Central Bank Enablers, and a Jolt of Profit for Morgan Stanley

Rogue Regulators, Central Bank Enablers, and a Jolt of Profit for Morgan Stanley-by Sinclair Noe DOW + 7 = 13,175SPX + 0.87 = 1402NAS – 4 = 301110 YR YLD +.01 = 1.64%OIL +.07 = 93.42GOLD + .30 = 1613.60SILV – .06 = 28.14PLAT + 3.00 = 1414.00 The Dog Days Rally on Wall Street extended to day 4 but the dog is looking tired. The S&P 500 closed above 1400. The Nasdaq Composite closed above 3000 but finished slightly lower on the day. The volume was very light, so it’s hard to find strong conviction in the rally; still it is a rally, or it was. The main driver seems to be the idea that the ECB will, in fact, do whatever it takes to prop up the Euro-union. Today, the Bank of England gave little indication that it would rush to pour in further stimulus even as it cut its forecast for medium-term economic growth in Britain. France’s central bank forecast a contraction in growth going into the third quarter, citing weak demand from the periphery and Britain. The strange case of Standard Chartered Bank just keeps getting stranger. The British bank has been accused by a regulator from New York state of doing business with Iran in violation of sanctions. The regulator has threatened the bank’s charter in New York. The bank denies it did the dirty with the Iranians, or at least they deny they did as much as accused, maybe just a few million in …

READ MORE →
Uncategorized

Tuesday, August 7, 2012 – Stay Dry My Friends!

Stay Dry My Friends!-by Sinclair Noe DOW + 51 = 13,168SPX + 7 = 1401NAS + 25 = 301510 YR YLD  +.07 = 1.63%OIL – .22 = 95.23GOLD + .70 = 1613.30SILV + .22 = 28.20PLAT + 6.00 = 1413.00 The head of the Federal Reserve Bank of Boston, Eric Rosengren, wants the Fed to undertake “an aggressive, open-ended bond buying program” that would stop only when the economy’s growth rate accelerates and unemployment begins dropping. Last week, following the FOMC meeting, the Fed said it would “closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability. So, that means the Fed will do something we just don’t know what or when, but things would have to get much much better, otherwise the Fed is somewhat obligated to do something. The Fed’s counterpart in Europe, the ECB is obligated to do “whatever it takes”. Mario Draghi, former Goldman man and now head of the European Central Bank, promised to do “whatever it takes” to save Euroland. Whatever it takes, Mario Draghi didn’t seem to have it. Or maybe he did. The situation in Europe is so complicated it’s hard to tell. So, investors have been fearful one day and cheerful the next. At the beginning of last week they thought all was lost. Then, by the end of the week, stocks were rallying again. Draghi …

READ MORE →
Uncategorized

Monday, August 6, 2012 – Front Running and Money Laudering – All in a Day’s Work

Front Running and Money Laundering – All in a Day’s Work – by Sinclair Noe DOW + 21 = 13,117SPX + 3 = 1394NAS + 22 = 298910 YR YLD -.02 = 1.55%OIL -.10 = 93.86GOLD + 8.00 = 1612.60SILV +.08 = 27.98PLAT – 5.00 = 1407.00 A couple of weeks ago I said we had entered the Dog Days of Summer; technically that was correct, however the Economic Dog Days officially start this week; there is almost nothing on the calendar, trading volume has dried up; today was the lightest volume of the year, excluding holidays. Knight Capital was trading again but not with the same vigor of last week. Knight managed to find a consortium of investors to pony up $400 million to allow the company to continue to scalp trades. High-frequency trading algorithms have flourished in the past few years, as under-regulation made way for non-regulation.  The mega banksters and their attendant trading firms figured out a way to  make huge trading profits virtually every day, off of their customers, by front-running, which means  they inserted themselves as middle-men into every trade. The high frequency traders set up computer rooms right next to the exchanges to assure they get super fast trade information, just a few milliseconds is enough. The high frequency trade algorithms submit bids-to-buy and offers-to-sell hundreds of times per second, and the computer programs determine exactly what price sellers and buyers are willing to accept. The bids and offers would be near-immediately canceled, because …

READ MORE →
Uncategorized

Friday, August 3, 2012 – The Jobs Report Explained, Plus a Few Charts

The Jobs Report Explained, Plus a Few Charts-by Sinclair NoeDOW + 217 = 13,096SPX + 25 = 1390NAS + 58 = 296710 YR YLD + .10 = 1.58%OIL + 3.77 = 92.96GOLD + 15.30 = 1604. 60SILV + .67 = 27.90PLAT + 21.00 = 1411.00The first Friday of each month is when the Labor Department reports on jobs for the previous month. Today, the report showed the economy added 163,000 net new jobs. It was the best monthly jobs report since February. Estimates had ranged from gains of 95,000 to about 110,000. The payrolls count over the prior two months was revised lower by a cumulative 6,000. Private-sector payrolls rose by 172,000 in the month.Still, the unemployment rate increased from 8.2% to 8.3%.  An alternate measure of employment, known as U-6, which includes discouraged workers and those forced to work part-time because of the weak economy, ticked up to 15% from 14.9%.Employment gains by sector include 49,000 net new positions in professional and business services, a broad category that includes high-paying computer systems companies and lower-paying temporary-help firms. Manufacturing employment accelerated, adding 25,000 new jobs in July despite reports of falling export orders. Education and healthcare services rebounded from a drop in June, adding 38,000 jobs in July; actually, education and healthcare should be broken down and separated because I’m pretty sure education has been losing jobs and healthcare has been a big jobs gainer. If you want to see confirmation that the housing market is bottoming out or even …

READ MORE →
Uncategorized

Thursday, August 02, 2012 – ECB Does Nothing – Jobs Tomorrow – Dust Bowl Today

ECB Does Nothing – Jobs Tomorrow – Dust Bowl Today– by Sinclair NoeDOW – 92 = 12,878SPX – 10 = 1365NAS – 10 = 290910 YR YLD -.06 = 1.48%OIL – 1.58 = 89.27GOLD – 11.80 = 1589.30SILV – .31 = 27.23PLAT – 12.00 = 1391.00So, last week, you might recall the stock market had a nice little two day rally based largely upon European Central Bank President Mario Draghi claiming within his mandate, he would do whatever it takes to preserve the euro; which turns out to be not so much. Draghi doesn’t have a bazooka, or even a pea shooter.  Yesterday, the Federal Reserve did nothing as they concluded their FOMC meeting. Today the ECB and the Bank of England did nothing. Perhaps Bernanke did not want to take center stage away from Draghi today. Could the Fed be playing it close to the vest, keeping their fingers crossed hoping for good employment numbers on Friday? For whatever reason, Bernanke is unwilling to try to kick start the economy with more stimulants. Why is he hesitating?  Maybe he’s more scared that additional Fed maneuvers won’t have any real effect than he is scared of a deflationary depression. Maybe he’s more scared that new twisting will have no economic effect. The last thing Bernanke wants is the point of recognition where the Fed is seen to no longer have any effective tools.If Bernanke actually unleashed QE3 and the market didn’t rally or worse, sold off, he would lose face.  Maybe …

READ MORE →