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Monday, April 23, 2012 European Debate Austerity v. Growth, Walmart in Mexico, Apple in Seattle

DOW – 102 = 12,927SPX – 11 = 1366NAS – 30 = 297010 YR YLD – .04 = 1.93%OIL +.03 = 103.14GOLD – 4.10 = 1639.30SILV – .84 = 30.86PLAT – 22.00 = 1565.00 There is some uncertainty in Europe. Sarkozy is losing the election in France; the Dutch government has collapsed, and the debt continues to mount and the austerity plans aren’t working and the natives are getting restless. In France, Sarkozy came in second behind Francois Hollande, the Socialist candidate and a harsh critic of the spending cuts prescribed as a way to end the region’s debt crisis. This was the first round of voting and there will be a runoff election on May 6th. Hollande won 28.6 percent to Sarkozy’s 27.1 percent; Hollande has the momentum. Voter frustration with the status quo and with the E.U. fed a rise of support for extremes at both ends of the political scale, making potential kingmakers out of 11 million voters who supported candidates of the far right and left. Sarkozy and Germany’s Chancellor Angela Merkel have been the main architects of Europe’s efforts to avoid a collapse of the region’s shared currency. If Sarkozy loses, it means Merkel might not last. If both Sarkozy and Merkel lose power, we’ve got a whole new situation. Figures reported by the European Union’s statistics office confirmed the effects of budget-cutting programs on countries that use the euro currency. Even with widespread spending cuts, overall debt rose to 87.2 percent, the highest level since …

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March, Wednesday 28, 2012

DOW – 71 = 13,126SPX – 6 = 1405NAS – 15 = 310410 YR YLD + .01 = 2.20% OIL +.13 = 105.54GOLD – 18.50 = 1663.10SILV – .55 = 32.14PLAT – 16.00 = 1640.00 Oil prices fell. The United States, France and Britain are in talks about possibly releasing strategic petroleum reserves. The problem is not a lack of supply. Not now anyway. Maybe tomorrow, maybe next week, maybe this summer; not today. The economy faces multiple risks: the Greeks might vote the technocrats out of office and tell the ECB to go to hell; Spain might default next and it would require a firewall that is bigger than the mother of all firewalls to avoid a cascading default; the Euro-banks hold twice as much toxic waste as their American counterparts, and their American counterparts still have extremely significant exposure to the Euro-trash; Japan’s debt to GDP makes the southern European countries look fiscally conservative – oh yeah the country is radioactive; China might slow down and the slowdown might be worse than expected. And then there are a few problems here in the US: unemployment at 8.3% (or is that inflation?), unemployment around 18% if you count all the invisible people that nobody wants to count, and the banks are still behaving badly and with impunity. I get the feeling that something is going to break. I don’t know what, but something is just going to stop working. Maybe it will be a breakdown in the electric grid, …

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March, Monday 19, 2012

DOW + 6 = 13,239SPX + 5 = 1409NAS + 23 = 307810 YR YLD +.08  = 2.38% OIL  – .31 = 107.78GOLD + 3.40 = 1664.50SILV + .36 = 33.02PLAT + 10.00 = 1685.00 The S&P 500 Index is now at its highest level since May 2008 and 10 percent below the record close of 1,565.15 set in October 2007. Apple rose 15.53 to $601.10 per share, pushing the market cap to $560 billion. It is the first time Apple has closed above $600. The market capitalization makes Apple the most valuable publicly traded company in the world. This is a parabolic rise; Apple is up almost 50% for the quarter. Today’s move followed an announcement they would pay a dividend of $2.65 per quarter starting in July, and also a $10 billion stock buyback program, and also that sales of the iPad 3 topped 3 million over the weekend.  It all sounds a little frothy. I mean, what are they going to do next Monday? Treasuries continued to drop. Thirty-year-bond yield added 7 basis points to 3.48%, a level it hasn’t close above since September. Yields on 10-year notes rose for a fifth day, by 8 basis points to 2.38%, from as low as 2.26% touched during European trading hours. Yields haven’t closed above that level since Oct. 27. Yield moves inversely to prices. In a speech, William Dudley, president of the New York Federal Reserve Bank said “the economy still faces significant headwinds” and inflation is expected …

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