Tuesday, December 4, 2012 – The Clock is Ticking

The Clock is Ticking by Sinclair Noe DOW – 13 = 12,951SPX – 2 = 1407 NAS – 5 = 299610 YR YLD – .02 = 1.61%OIL – .71 = 88.38GOLD – 19.20 = 1697.80SILV – .75 = 33.01 So, President Obama presented an opening offer in the fiscal cliff talks; Speaker Bohener said it wasn’t serious and the financial and political reporters passed along the complaint that it was a recycled version of an old plan; before the election those same reporters spent the year passing along the complaint that Obama had no plan. Then Obama complained that the Republicans didn’t have a counter offer, and they finally came up with a counter but it didn’t have any specifics, but one area is that they want cuts to Medicare, even though before the election they were outraged that Obama was cutting Medicare. The current Republican position seems to be that the fiscal cliff’s instant austerity would destroy the economy, which is odd after four years of Republican clamoring for austerity, and that the cliff’s military spending cuts in particular would kill jobs, which is even odder after four years of Republican insistence that government spending can’t create jobs. And remember, this is all about the debt ceiling and tax cuts and spending cuts. And the political and financial reporters pass all this stuff on, with a countdown clock ticking in the lower right screen. It’s irresponsible reporting. Mainstream media outlets don’t want to look partisan, so they ignore the …

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Monday, December 3, 2012 – Still in the Woods and Other Economic News

Still in the Woods and Other Economic News by Sinclair Noe DOW – 59 = 12,965SPX – 6 = 1409NAS – 8 = 300210 YR YLD + .02 = 1.63%OIL +.01 = 88.92GOLD + .80 = 1717.00SILV + .22 = 33.76 Let’s start with the economic news. Business among manufacturers contracted in November and fell to the lowest level in more than three years. The Institute for Supply Management’s index of purchasing managers dropped to 49.5% from 51.7% in October. Any reading below 50 indicates contraction in the manufacturing sector. The decline in the overall ISM index largely reflected a steep drop in new orders but companies remained active fulfilling prior orders. Only six of the 18 U.S. manufacturing industries surveyed by ISM said they expanded somewhat faster in November. Nearly twice as many said their industries contracted. In the euro zone, manufacturers contracted for the 16th straight month, according to Markit. China’s manufacturing sector expanded slightly. In a separate report, the Commerce Department said spending on construction projects advanced 1.4% in October to the highest level since September 2009. The big economic news will come on Friday with the monthly jobs report. The best guess is that the economy added about 75,000 jobs in November, but that is just a guess; Hurricane Sandy has distorted some of the economic numbers. The fourth quarter of 2012 has clearly gotten off to a slow start. Consumer spending, by far the biggest source of economic growth, fell in October for the first …

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Friday, November 30, 2012 – We’re All Just Muppets Living in a Fairy World

We’re All Just Muppets Living in a Fairy World by Sinclair Noe DOW + 3 = 13,025SPX +0.23 = 1416NAS – 1 = 301010 YR YLD – .01 = 1.61%OIL + .88 = 88.95GOLD – 10.60 = 1716.20SILV – .85 – 33.54 October 31 Closing Numbers:       DOW                                                13096SPX                                                 1412NAS                                                 297710 YR YLD                                      1.69% OIL                                                   88.51GOLD                                              1721.20SILV                                                 32.36 So for all the talk about the fiscal cliff, the election, Hurricane Sandy, The Euro-Debt Crisis, the unrest in the Middle East; for all that and more, the markets gave a big yawn in the month of November. So, yesterday afternoon the House Republicans told reporters that the White House plan to avert the fiscal cliff was nothing more than a “joke”, an “insult”, and a “complete break from reality.” Mitch McConnell said he “burst into laughter. John Boehner said: “It was not a serious proposal.”  The plan, or the opening salvo from the White House calls for $1.6 trillion in tax increases spread out over ten years, $50 billion in additional stimulus spending, and $400 billion in spending cuts over ten years, plus an extension of the 2 percentage point payroll tax deduction or something comparable to it, and a permanent extension on the debt ceiling. Meanwhile, the Republican plan is, well, it’s still something of a mystery but we know they want cuts to entitlement programs, and no they’re not referring to the corporate welfare programs that allow $1.5 trillion in corporate …

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Thursday, November 29,2012 – Place Your Bets

Place Your Bets by Sinclair Noe Let’s start with the important numbers today: 5, 16, 22, 23, 29, and the Powerball 6. And I did not win. Somebody in Missouri and somebody in Phoenix are holding the winning tickets. Not me. All I’m holding is a $10 piece of paper which is my donation to the tax fund for the mathematically challenged. DOW + 36 = 13,021SPX + 6 = 1415 NAS + 20 = 301210 YR YLD un = 1.62%OIL + 1.23 = 87.72GOLD + 6.00 = 1726.80SILV + .50 = 34.27 The U.S. economy grew at a 2.7 percent annual rate from July through September, much faster than first thought. The Commerce Department said growth in the third quarter was significantly better than the 2 percent rate estimated a month ago. And it was more than twice the 1.3 percent rate reported for the April-June quarter. The main reason for the upward revision to the gross domestic product was businesses restocked at a faster pace than previously estimated. That offset weaker consumer spending growth. The fourth quarter GDP is expected to drop back down below 2 percent because of Hurricane Sandy, which put the brakes on all sorts of business activity along the East Coast. And then the other reason cited for the possible fourth quarter slowdown is the fiscal cliff. (Sorry, we just can’t get through the day without talking about it.) So, here is the annotated version of today’s fiscal cliff report: a little partisan sniping, …

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Wednesday, November 28, 2012 – If They Don’t Jump, I Might Push Them

If They Don’t Jump, I Might Push Them by Sinclair Noe DOW + 106 = 12,985SPX + 10 = 1409NAS + 23 = 299110 YR YLD – .03 = 1.62%OIL – .52 = 86.66GOLD – 22.00 = 1720.80SILV – .28 = 33.87 I am getting so sick and tired of this fiscal cliff malarkey* (* a politically acceptable euphemism, according to the debates), that I would like to throw some politicians off a fiscal cliff; maybe we could toss in a few media types as well. Today, I hear that stocks moved higher because John Boehner, the Speaker of the House, said he was optimistic about not going over the cliff. Really? That’s all it takes for stocks to post triple digit gains? Maybe tomorrow, Mr. Boehner can tell us he is both optimistic, and confident, and chipper, and slightly perky, and everything in his universe is copacetic; and the markets could celebrate with a monster rally. I don’t think this is the real motivation for market moves but it might be, but I don’t think so. On Friday, President Obama will hit the road to promote his version of fiscal cliff avoidance. Business executives and others who’ve met with President Barack Obama in recent days describe a president who’s supremely confident that he’ll come out on top of a fiscal cliff deal; with Republicans bending to his will on tax increases for the wealthy and Democrats sucking up deep spending cuts. You have to wonder about the austerity advice …

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Tuesday, November 27, 2012 – Economic Data, Geithner’s Cliff, Greek Bailout, Warren’s Pitch, Blankfein’s Irony

Economic Data, Geithner’s Cliff, Greek Bailout, Warren’s Pitch, Blankfein’s Irony by Sinclair Noe DOW – 89 = 12,878SPX – 7 = 1398NAS – 8 = 296710 YR YLD -.02 = 1.65%OIL – .45 = 87.29GOLD – 7.60 = 1742.80SILV – – .13 = 34.15 Durable goods orders leveled off in October, mainly because of slack demand for automobiles and airplanes and a reversal in defense orders. Most other manufacturers saw an uptick in demand; so, conditions aren’t getting worse; they aren’t getting better either. Or at least that is how it looks at first blush. Overall orders for durable goods were virtually flat in October, but factoring out the volatile defense and transportation industries, so-called core capital orders jumped 1.7% last month to mark the strongest gain since May. Home prices rose in September for the sixth straight month. The S&P/Case-Shiller 20-city composite posted a non-seasonally adjusted 0.3% increase in September to reach the highest level in two years, following a 0.8% gain in August. Home prices were up 3% from September 2011 for the largest annual percentage growth since July 2010. In the latest Quarterly Report on Household Debt and Credit, the Federal Reserve Bank of New York reports that non-real estate debt jumped 2.3% to 2.7 trillion, with increases in student loans, auto loans, and credit card balances. Overall consumer debt shrank $74 billion to $11.3 trillion as mortgage debt decrease more than $120 billion. Nearly a quarter of a million people had a foreclosure tacked onto their …

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Monday, November 26, 2012 – Shopping, Cliffs, Greece, Two-Tiered Justice, Doha, Infrastructure

Shopping, Cliffs, Greece, Two-Tiered Justice, Doha, Infrastructureby Sinclair Noe DOW – 42 = 12,967SPX – 2 = 1406NAS + 9 = 297610 YR YLD -.03 = 1.66%OIL + 1.22 = 86.67GOLD – 2.50 = 1750.40SILV + .05 = 34.28 Well, I survived Black Friday, which actually creeped into Black Thursday; I made it through Shop Small Saturday, and I’ve arrived at Cyber Monday. Tomorrow will be Buyers’ Remorse Tuesday. Don’t forget Credit Card Shock January. I have not and will not go into debt for the holidays. Consumer debt is the worst. A rebound in housing and the job market, along with a drop in household debt, has led additional consumers to say they’ll buy more this holiday. A new survey from the Credit Union National Association and the Consumer Federation of America shows 12 percent said they would boost spending, the highest level since 15 percent in 2007, while 38 percent said they would spend less. According to the National Retail Federation, retail sales for the weekend are up about 13% from a year ago. Online shopping on Black Friday rose 26 percent to exceed $1 billion for the first time. Spending in stores and online rose to $59 billion in the four days starting Nov. 22. Customers spent $423 on average this weekend, up 6.3 percent from last year. The 13 percent jump in total spending suggests that some sales were pulled ahead from December and that retailers will have to keep up the promotions to avoid a …

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Wednesday, November 21, 2012 – Of Cliffs and Helicopters

Of Cliffs and Helicoptersby Sinclair Noe DOW + 48 = 12,836 SPX + 3 = 1391NAS + 9 = 292610 YR YLD +.03 = 1.69%OIL + .95 = 86.40GOLD + 1.10 = 1730.20SILV + .20 = 33.49 Israel and Hamas agreed to bring to an end more than a week of air strikes and missile attacks. A truce was declared; now we’ll see if it holds. The agreement aims to halt air strikes that have left more than 150 people dead in Gaza and rocket attacks that have killed five Israelis. Israel has hit more than 1,500 targets, and Palestinians launched more than 1,400 missiles. Secreatary of State Hillary Clinton said that she welcomed the accord and expressed hope it will “move us closer to a comprehensive peace.” “In the days ahead, the United States will work with partners across the region to consolidate this progress, improve conditions for the people of Gaza, and provide security for the people of Israel,” she said. The accord says that Israel shall stop all hostilities on the Gaza Strip, land, sea and air, including incursions and targeting of individuals. It also says that “all Palestinian factions shall stop all hostilities from the Gaza Strip against Israel, including rocket attacks and attacks along the border.” Israeli Prime Minister Netanyahu thanked President Obama and Egyptian President Mohamed Mursi for their work to end the violence. There was tremendous US pressure on the Egyptians, who in turn pressured Hamas to accept terms which are not set …

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Tuesday, November 20, 2012 – Extracting Meaning

Extracting Meaning by Sinclair Noe DOW – 7 = 12,788SPX +0.92 = 1387NAS + 0.61 = 291610 YR YLD + .04 = 1.66%OIL + 1.22 = 86.67 GOLD – 3.80 = 1729.10SILV + .08 = 33.29 There may be a ceasefire in the Middle East. An official for Hamas says a ceasefire deal has been reached. Officials for Israel and Egypt say not quite, some details are being worked out. Israel pressed on with its strikes in Gaza on the seventh day of its offensive and Palestinian rockets still flashed across the border. Secretary of State Clinton is in Israel to help broker a deal. A ceasefire may be announced within the hour, but that would just be a small step; actually enforcing the ceasefire would be more telling. Federal Reserve Chairman Bernanke delivered a speech today to the New York Economic Club. Bernanke said one reason the recovery has been so disappointing is that the financial crisis appears to have lowered, at least for a time, how fast the economy can grow over the long run. The crisis has reduced labor force participation and lowered productivity as businesses have trimmed investment. This suggests that the nation’s potential output has grown more slowly than expected in recent years. Potential output combines the economy’s long-run productivity rate and labor force growth. This means the economy has to grow faster than potential to bring down the unemployment rate. In some ways, this is Bernanke making the case against austerity and for stimulus. …

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Monday, November 19, 2012 – Debtmageddon: the Non-Problem Problem

Debtmageddon: the Non-Problem Problem by Sinclair Noe DOW + 207 = 12,795SPX + 27 = 1386NAS + 62 = 291610 YR YLD +.04 = 1.61%OIL + 1.22 = 86.67GOLD + 18.20 = 1732.90 SILV + .80 = 33.21 Pete Domenici and Alice Rivlin are co-chairs of the Bipartisan Policy Center for Debt Reduction Task Force, offering the following recommendations in an article in the New York Times over the weekend: Economic growth must precede full-scale debt restraint. Congress should take action now to pass legislation phasing in tax reform that yields new revenues and restructuring entitlements to curb the continued growth of federal spending, particularly for health care. We cannot resort to such ham-handed mechanisms as the approaching sequester cuts, large across-the-board tax increases and other elements of the “fiscal cliff.” In late 2010, the task force recommended a holiday from the full 12.4 percent Social Security payroll tax, not the partial 2 percent cut that Congress ultimately passed. The idea is that whether it comes in the form of a payroll tax holiday, an income tax rebate or another similar mechanism, the most pressing priority is to get the economy out of “stall speed.” The task force also suggested a possible “framework” for the lame-duck Congress to pass a modest down payment on deficit reduction in December, while pursuing a comprehensive agreement, a “grand bargain” of sorts, in 2013. If I may break it down in a nutshell; growth before austerity. Federal Reserve Board Chairman Ben Bernanke will travel …

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