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 →

Wednesday, August 1, 2012 – The Fed’s Gone Fishing – The Machines Take Control – The Check is in the Mail

The Fed’s Gone Fishing -The Machines Take Control – The Check is in the Mail-by Sinclair NoeDOW – 37 = 12,971SPX – 4 = 1375NAS – 19 = 292010 YR YLD +.05 = 1.54%OIL + .71 = 90.38GOLD – 14.80 = 1601.10SILV -.56 = 27.54PLAT – 20.00 = 1403.00The economy has slowed down over the past few months; I know it; you know it; the Federal Reserve knows it; anybody who can fog a mirror knows it. And so, it was widely anticipated the Federal Reserve would acknowledge the slowdown today as they wrapped up a two-day FOMC meeting. They did. They issued a statement saying:  “economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated.” And then they did absolutely nothing. The did not extend their Zero Interest Rate Policy into the next millennium and beyond; they did not cut the interest they pay member banks for not making loans; and they did not announce another round of quantitative easing. Nobody seriously expected QE3 but it was expected the Fed would make some small, incremental concession. Nope. They did nothing. Squat, zilch, zip, nada. They couldn’t even throw a dog a bone. Generally they expect inflation to be under control and employment to slowly improve just a smidge, and apparently Bernanke is going trout fishing in Wyoming. They promised to keep an eye on things; if it goes to hell in a handbasket, they’ll …

READ MORE →
Uncategorized

Tuesday, July 31, 2012 – Waiting on Godot, Draghi, Bernanke, DeMarco, the Flood, and For The Lights to Come Back On

Waiting on Godot, Draghi, Bernanke, DeMarco, the Flood, and For The Lights to Come Back On-by Sinclair NoeDOW – 64 = 13,008SPX – 5 = 1379NAS – 6 = 293910 YR YLD -.01 = 1.49 OIL – 1.78 – 89.89GOLD – 7.00 = 1615.90SILV – .18 = 28.10PLAT + 1.00 = 1421.00We wrap up the month of July. Let’s look at the scorecard; for the month, the Dow Industrial gained 128 points; the S&P 500 index gained 17 points; the yield on the 10 year treasury note dropped 9 basis points. S&P Case Shiller index of home prices rose  2.2% in May. All 20 cities in the index saw monthly gains. On a year-over-year basis, prices are down 0.7% nationally, the smallest fall in 18 months. Phoenix prices have climbed 11.5% – the strongest in the nation, while Atlanta’s have dropped 14.5%. Meanwhile, Corelogic reports there were about 60,000 completed foreclosures in June, down from about 80,000 in the same month last year. According to the report there were roughly 3.7 million homes lost to foreclosures since  2008. Ed DeMarco, the acting chief of the regulator for Fannie and Freddie, the Federal Housing Finance Agency, said in a letter to the top Republican and Democrat on the Senate Banking Committee that “after much study,” he has concluded that Fannie and Freddie’s participation in the Obama administration’s program to cut the amount owed by underwater borrowers would “not make a meaningful improvement in reducing foreclosures in a cost effective way for taxpayers.”Treasury Secretary Tim …

READ MORE →
Uncategorized

Monday, July 30, 2012 – A Convergence of Central Bankers

A Convergence of Central Bankers-by Sinclair NoeDOW – 2 = 13,073SPX – 0.67 = 1385NAS – 12 = 294510 YR YLD -.05 = 1.50%OIL – .11 = 89.95GOLD – 1.70 = 1622.90SILV +.39 = 28.28PLAT + 5.00 = 1422.00This week features a convergence of central bankers: the ECB, the BOE, and the Fed; toss in a jobs report to finish the week and the fate of the global economy hangs in the balance. Maybe, maybe not;what we can say is that the game of kick the can down the road is running out of road. A quarter point rate cut from the ECB will not satisfy anybody. ECB President Mario Draghi has promised to do whatever it takes; now he is being put to the test. Germany will be required to step up; the ECB will be required to function as a global central bank and throw off its limitations. If Draghi and the ECB can’t control the downward spiral of the debt debacle in Spain and Italy, the entire global economy could start to crumble. Too dramatic? Consider China, India and Brazil are facing slower economic growth and a broken credit cycle; the US is facing the prospect of a fresh round of QE or some other tool to lift us out of a downturn – and let’s not even spend time today on the fiscal cliff. The International Monetary Fund issued this warning:  “the euro area crisis has reached a new and critical stage … raising questions about the …

READ MORE →
Uncategorized

Friday, July 27, 2012 – Wall Street Finds Pleasure in GDP Pain

Wall Street Finds Pleasure in GDP Pain-by Sinclair NoeDOW + 187 = 13,075SPX + 25 = 1385NAS + 64 = 295810 YR YLD +.13 = 1.56%OIL + .91 = 91.98GOLD + 7.50 = 1624.60SILV +.25 = 27.89PLAT + 6.00 = 1417.00All right class; Pop Quiz. Question: What does Wall Street love? Answer: Free money. I know, it’s the same pop quiz as yesterday. That was then and this is now. Yesterday, the free money was coming from the ECB, as Mario Draghi promised to do whatever it takes to save the euro. Today came news that was so bad that it should push Federal Reserve Chairman Ben Bernanke out of denial and into action. Economic growth was so stagnant that Bernanke will be forced to pass out free money to his bankster buddies; it’s not the solution but it is what Bernanke knows how to do. The nation’s gross domestic product, the broadest measure of the economy, grew at just 1.5% in the second quarter; that compares to GDP growth of 2% in the first quarter and 4.1% growth in the fourth quarter of 2011. Consumers cut back, local governments cut spending, factories received fewer orders and exports declined because of the global slowdown and a stronger dollar. Spending on durable goods, including things like cars and home appliances, fell 1.% in the second quarter. Cuts in government spending, especially at the local level, also held back growth. State and local spending fell 2.1% during the quarter while federal spending declined 0.4%. …

READ MORE →
Uncategorized

Thursday, April 26, 2012 – Everybody Loves Free Money

Everybody Loves Free Money– by Sinclair NoeDOW +211 = 12,887SPX + 22 = 1360NAS + 39 = 289310 YR YLD +.02 = 1.43%OIL +.02 = 89.41GOLD + 11.30 = 1617.10SILV + .20 = 27.64PLAT + 5.00 = 1411.00Pop Quiz: What do Wall Street bankers love? Free money. They swoon at the prospect of  money being redistributed from taxpayers to bankers. You might say they are socialists, in this regard; if redistribution of wealth is your definition of socialism. This morning European Central Bank President Mario Draghi declared “the ECB is ready to do whatever it takes to preserve the euro…and believe me, it will be enough.”We don’t know the details. Draghi wasn’t actually handing out euros to the bankers, but the idea is that there will be a European version of Quantitative Easing, possibly a direct bond purchase program.The euro rallied against the dollar. European stock exchanges jumped. Commodity prices jumped. The Yield on Spanish and Italian bonds dropped. Yields on German and US bonds rose as prices dropped. And US stocks moved higher. The ECB announcement was a put, a floor under the markets. For bankers and traders, the announcement flicked the switch to “risk on”, because even if they lose money, the ECB will just print more. Draghi opening the door to a Bernanke-style monetary policy in Europe is a big deal — at least for the financial markets. This sort of stimulative policy does a poor job of circulating money through the broader economy. Still, the market was …

READ MORE →
Uncategorized

Wednesday, July 25, 2012 –

Sandy Weill, Glass-Steagall, and Banksters on the Wrong Side of History-by Sinclair NoeDOW + 58 = 12,676SPX -0.42 = 1337NAS – 8 = 285410 YR YLD unch = 1.41OIL +.61 = 90.67GOLD + 23.70 = 1605.80SILV +.38 = 27.44PLAT + 15.00 = 1406.00One story today. In 1993 Sandy Weill acquired Shearson Lehman; in quick order he also bought up Travelers Corp and Aetna Life and Casualty and then Salomon Brothers. He began calling the conglomerate, Travelers Group. In April 1998, Travelers Group announced an agreement to undertake the $76 billion merger between Travelers and Citicorp. The new company, called Citigroup, combined a commercial bank holding company with an insurance company and investment banking; it was a big one stop shop that included Citibank, Travelers, Smith Barney, Primerica, Citifinancial, Shearson, Aetna, and Salomon. At the time, it was the largest merger in history and created a financial behemoth with operations in 100 countries. It was also illegal based upon the Glass-Steagall Act of 1933.Let’s go back in time to explain Glass-Steagall. At the height of the Great Depression the Congress conducted hearings which showed that the presumed leaders of American enterprise, the bankers and brokers, were guilty of disreputable and dishonest dealings and gross misuses of the public’s trust, literally buying control of politicians. The hearings started in 1932 and they uncovered plenty of abuses. JP Morgan maintained a “preferred list” of clients that would get special deals, huge discounts on stock purchases that could then be flipped for a quick …

READ MORE →