Financial Review

Dow Up, Oil Down, Quit Your Job

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 40 = 17,652 SPX + 1 = 2039 NAS + 5 = 4680 10 YR YLD – .02 = 2.34% OIL – 2.79 = 74.39 GOLD + .20 = 1162.90 SILV – .01 = 15.77 Record high close for the Dow Industrials. The Nasdaq Composite hasn’t seen record highs since the spring of 2000, when it closed at 5048, which is just 368 points, or about a 7% move from here. If you were unlucky enough to have bought the PowerShares QQQ exchange-traded fund, an ETF that tracks that top 100 non-financial stocks in the Nasdaq, on March 10, 2000, you’d still be in the red on that investment. Tech companies are once again in a leadership role. While Microsoft, Apple and several other tech leaders of today are trading at higher prices than 15 years ago, Intel and Cisco are still well below their 2000 peak prices. Of course the largest company in market cap is Apple at $660 billion. Apple shares have surged more than 40% so far this year, creating more than $160 billion in market value for shareholders, which coincidentally is about the same market cap as IBM, which was once considered the big player in tech. Today, Microsoft passed Exxon to become the second largest company in terms of market capitalization. Exxon has a market cap of $400 billion; Microsoft is worth $408 billion. Exxon’s …

READ MORE →
Financial Review

A Tale of Three Stocks

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-20-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 19 = 16,339 SPX + 17 = 1904 NAS + 57 = 4316 10 YR YLD – .02 = 2.18% OIL – .21 = 81.85 GOLD + 8.70 = 1247.90 SILV + .16 = 17.53 A nice bounce in the S&P 500 index and the Nasdaq Composite. For most of the session, the Dow was in negative territory, clawing its way to positive, barely. There are 3 stocks that had a compelling story today. We start with IBM, which reported its third-quarter results; a 10th consecutive period of falling sales, marked by weaker performance in growth markets. IBM said its long-standing forecast of earnings per share of $20 for 2015 is no longer achievable. IBM lowered its forecast for free cash flow. The company said it was selling its money-losing chip-making business to GlobalFoundries, a move to further cut costs and focus on its more profitable, faster-growing businesses. Once upon a time, IBM was a pioneer in advancing semiconductor technology, its manufacturing capability fell behind others that produced chips in large volume, but now they will have to pay GlobalFoundries $1.5 billion to take the chip division, while taking a $4.7 billion charge. IBM has been divesting slower-growing and unprofitable businesses, but like many older tech companies, it is caught in the middle; sloughing off the old and expensive without yet having a foothold in the new. Some customers are …

READ MORE →
Financial Review

Behind the Curtain

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 24 = 16,117 SPX + 0.27 = 1862 NAS + 2 = 4217 10 YR YLD + .06 = 2.15% OIL + 1.16 = 82.94 GOLD – 2.20 = 1239.90 SILV – .08 = 17.47 The Dow is down for a sixth consecutive session. We started the morning down almost 200 points, so there is that. Part of yesterday’s volatility is being blamed on mini-flash crashes; 179 to be precise. Basically the high frequency traders yank their bids, as their algorithms try to catch up with big moves. It isn’t really a flash crash so much as a lack of liquidity. Take a deep breath. Think about how you are invested. Consider whether you are diversified across asset classes. The market has not collapsed. It has gone down in a fairly fast and furious manner, but it has not collapsed. What will happen next? Will the market bounce back? Will it go sideways? Will the pullback continue and become really painful? You don’t know; I don’t know; the market doesn’t know; nobody knows. Take a deep breath, consider where you are and where you want to be in the future. The stock market is always a gamble. Maybe you want to gamble with a part of your money, and that’s fine. Maybe you are tired of gambling and want to find something safer; that’s cool, too. Just understand what you’re …

READ MORE →
Financial Review

War, Pay Phones, Small Business and Big Banks

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-24-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 154 = 17,210 SPX + 15 = 1998 NAS + 46 = 4555 10 YR YLD + .03 = 2.57% OIL + 1.18 = 92.80 GOLD – 6.30 = 1217.60 SILV – .11 = 17.78 President Obama addressed the United Nations General Assembly today. He condemned ISIS, and said there was no reasoning and no negotiation with their brand of evil. He said the US “will work with a broad coalition to dismantle this network of death”; that coalition is now up to 40 countries. He urged Muslims to reject the ideology of ISIS and al-Qaeda. He also announced a US warplanes hit ISIS vehicles and arms dumps in new air strikes in Iraq and Syria. ISIS continues to advance in Syria and aid agencies report some 130,000 Kurdish refugees have crossed into Turkey in the past few days. An Algerian jihadist group linked to ISIS has released a video which it says shows militants beheading a French tourist. The president’s speech also criticized Russia for the recent invasion of Ukraine. Today, NATO reports Russia has withdrawn a sizable number of its troops from eastern Ukraine, although some remain. Russian backed rebels in the region said they had begun pulling back their heavy artillery after Ukrainian troops did the same. For now, the cease fire appears to be holding. The stock market recovered after three days of losses; for the …

READ MORE →
Financial Review

War, Inversions, and Climate

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-23-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 116 = 17,055 SPX – 11 = 1982 NA – 19 = 4508 10 YR YLD – .03 = 2.53% OIL + .06 = 91.62 GOLD + 8.10 = 1223.90 SILV + .05 = 17.88 First up: war. You’ve probably heard by now that the US launched several airstrikes against ISIS targets inside Syria and, separately, in potentially averting an imminent threat to the homeland from an al Qaeda group called Khorasan. Many of the targets were in and around Raqqa, Syria, believed to be an ISIS stronghold. Several Arab nations took part in the US-led operation: Jordan, Saudi Arabia, Bahrain, Qatar and the United Arab Emirates. A spokesman for the Pentagon said they are still assessing the effectiveness of the bombing campaign but the Pentagon believes they were “successful in hitting what we were aiming at.” The airstrikes against Khorasan was in response to threats, however officials so far have provided no details about the terrorists’ planned attack or the credibility of the intelligence they had on it. A Pentagon spokesman said “the individuals plotting and planning it were eliminated.” The Syrian government says the US told it of plans to carry out airstrikes. The State Department immediately denied that it gave prior notification. Reuters reports Iranian officials were informed of the airstrikes in advance, but not specific targets. Meanwhile, the Israeli military said that it had shot down …

READ MORE →
Financial Review

Timing is………..Everything

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-10-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 54 = 17, 068 SPX + 7 = 1995 NAS + 34 = 4586 10 YR YLD + .03 = 2.53% OIL – 1.13 = 91.67 GOLD – 6.80 = 1250.00 SILV – .12 = 19.04 Later today, at 6PM local time or 9PM eastern, President Obama will address the nation and lay out his strategy to degrade and destroy the Islamic State insurgency operating in Iraq and Syria. This will likely involve significant escalation of the US military role in the area, but we aren’t sure about the intervention in Syria; probably a combination of airstrikes, and support for more moderate Syrian forces willing to carry out attacks on both ISIS and Assad; along with regional allies providing on the ground support. The president has pledged there will not be boots on the ground. He said: “This is not the equivalent of the Iraq war. What this is similar to is the kinds of counter-terrorism campaigns that we’ve been engaging in consistently over the last five, six, seven years.” Which sounds like a distinction without a difference. Earlier today an administration spokesman said: “The president will discuss how we are building a coalition of allies and partners in the region and in the broader international community to support our efforts, and will talk about how we work with the Congress as a partner in these efforts.” That doesn’t mean …

READ MORE →
Financial Review

Apple Bites

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-09-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 97 = 17,013 SPX – 13 = 1988 NAS – 40 = 4552 10 YR YLD + .03 = 2.50% OIL + .05 = 92.80 GOLD + .30 = 1256.80 SILV + .04 = 19.16 Today’s epiphany is courtesy of Apple; they unveiled not one but three new things. Let’s examine. The iPhone 6 is the new phone, and it is a little bit bigger than the old phone. And they even have an iPhone 6 plus, which is a little bit bigger. So, the new phones won’t fit in your pocket anymore. I know, it’s like the most totally incredible thing ever. The Apple Watch is smaller than the old phone; so small it can be strapped on your wrist. It even has a dial so older people will realize it is supposed to be a watch and not just a little phone strapped to your wrist. It is called the Apple Watch because iWatch was just a little too creepy. The third thing is Apple Pay, which is a payment processing service that has Apple partnering with American Express, MasterCard, and Visa so you can pay for purchases with a big iPhone 6 or an Apple Watch, just like you can pay for things with an American Express, MasterCard, or Visa credit card. The big difference is this is new technology, whereas the credit card is like 50 …

READ MORE →
Financial Review

A Messy Business

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCALIR_NOE-SEG_1-09-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review 09-04-2014 DOW – 8 = 17,069 SPX – 3 = 1997 NAS – 10 = 4562 10 YR YLD + .02 = 2.45% OIL – .98 = 94.56 GOLD – 8.40 = 1261.90 SILV – .11 = 19.16 Wall Street tried to rally but fizzled instead. The Dow and the S&P 500 hit new intraday records, only to close down on the day. The S&P energy index ended down 1.3% as the day’s worst performing sector in the S&P. Crude oil futures lost 1.1% to $94.56 as the dollar strengthened and weighed on commodities. Tomorrow brings the monthly jobs report. Payrolls processing firm ADP said private-sector payrolls increased by 204,000 last month after rising by 212,000 in July, with gains spread across a range of industries. While the report was a bit softer than expected, it marked the fifth straight month of gains above 200,000. The ADP report does not always predict the government jobs report but it is a general indicator of the report. The Institute for Supply Management said its services index rose from 58.7 in July to 59.6 last month, the highest reading since its inception in January 2008. The Commerce Department said the US trade deficit fell 0.6% to $40.5 billion in July, its smallest size since January. When adjusted for inflation, it reached its narrowest point since December 2013. A new survey from the Federal Reserve shows …

READ MORE →
Financial Review

Wednesday, April 23, 2014 – A Brilliant Future From Cool Ideas

A Brilliant Future From Cool Ideas by Sinclair Noe DOW – 12 = 16,501SPX – 4 = 1875NAS – 34 = 412610 YR YLD – .05 = 2.68%OIL – .2- = 101.55GOLD un 1284.70SILV + .06 = 19.55 It’s earnings season, and this is a chance to compare and contrast. This morning, Facebook posted earnings of $642 million in net income, or 25 cents a share, in the first quarter, versus $219 million, or 9 cents a share in the year ago period. Overall revenue grew 72% year-on-year to $2.5 billion in the first quarter, topping estimates. Facebook now has 1.28 billion active users, and more than 1 billion do their Facebook stuff on a mobile device. Then Facebook announced their Financial Director was resigning. Shares were up about 3%. Nobody puts on a better presentation than Apple, that’s how they grew to be the most valuable company in the world. Steve Jobs would walk out and announce Apple had created a new mp3 player, and also a new way to connect to the internet, and also a new camera. Wow, three new products, nope…, he would hold up the iPhone – just one very cool thing from Apple; tech geeks heads would explode. Today, Apple posted earnings of $10.2 billion or $11.62 a share, on revenue of $45.6 billion. Analysts expected the company to report earnings excluding items of $10.18 a share; Apple reported a 4.6% rise in March-quarter revenue to $45.6 billion; Apple sold 43.7 million iPhones in …

READ MORE →
Uncategorized

Tuesday, April 01, 2014 – Murderers and Cheats

Murderers and Cheatsby Sinclair Noe DOW + 74 = 16,532SPX + 13 = 1885NAS + 69 = 426810 YR YLD + .04 = 2.76%OIL – 1.99 = 99.59GOLD – 5. 00 = 1280.80SILV un = 19,86 Congratulations Mary Barra, you’ve been named CEO of General Motors, one of the biggest companies in America; now head on over to Capitol Hill to take the blame for the people who used to run the company. Barra’s appearance before a subcommittee of the House Energy and Commerce Committee represented a significant new phase in the company’s crisis since it issued recalls that began in February for 2.6 million Cobalts and other vehicles. The problems with the cars involve faulty ignition switches; GM repeatedly failed to fix faulty ignition switches, despite conducting multiple internal studies of the problem since 2001, and 13 people died in the defective vehicles. Members of Congress and the families of people killed in GM cars are urging Barra to declare the cars unsafe to drive until new ignition switches are installed. So far, GM has said the vehicles are safe to operate as long as there are no objects attached to the ignition key.  GM conducted several internal investigations of the switch problems, dating back as far as 2001. Company engineers learned that the key in the ignition could be inadvertently bumped into the off or accessory position, causing the engine to lose power and disabling air bags. Documents show that GM approved the switch for installation in its …

READ MORE →
Uncategorized

Monday, January 27, 2014 – Sniffing Out Weakness

Sniffing Out Weakness by Sinclair Noe DOW – 41 = 15,837SPX – 8 = 1781NAS – 44 = 408310 YR YLD + .04 = 2.76%OIL – .94 = 95.70GOLD – 12.50 = 1257.50SILV – .22 = 19.79 Last week was rough for the Dow Industrial, and today started with the blue chips in the red but not by much; it even looked like we might finish in positive territory. Nahh. The markets have been trending downward over the last week due to a mix of concerns. Emerging market strains, anxiety over tapering by the Federal Reserve, and weak manufacturing data from China likely contributed to a pullback. Also, new home sales were weak in December. The international problems started with a report that Chinese manufacturing may contract for the first time in 6 months. Then Argentina’s central bank limited dollar sales to preserve international reserves that had fallen to a seven-year low. Then there were concerns about a default in the shadow banking system in China. Then there concerns about a corruption scandal for Prime Minister Erdogan’s cabinet in Turkey. Protesters occupied municipal buildings in the Ukraine. Then the South African rand dropped big. Then the whole thing spread. I don’t know what happened in Mexico but the peso took a hit. Bank of America analysts recommended buying the Mexican peso on Nov. 24 as one of their top two Japan-related trades for this year, predicting a rally that would have boosted the currency’s value to 8.4 yen. Instead, the …

READ MORE →
Uncategorized

Monday, November 18, 2013 – Activism from Billionaires and Tweeters

Activism from Billionaires and Tweetersby Sinclair Noe DOW + 14 = 15.976SPX – 6 = 1791NAS – 36 = 394910 YR YLD – .04 = 2.66%OIL – .83 = 93.01GOLD – 14.40 = 1277.00SILV – .38 = 20.50 This one didn’t feel like a record high celebration, in part because the major indices closed well off the intraday high. The Dow had been trading above 16,000 for much of the afternoon, but a late sell-off saw the Dow finish below that nice round number; still, it was good enough for another record high close. The S&P 500 hit an intraday high of 1802, but closed in negative territory. Still we mark today’s gains in the Dow in the “win” column and that means we have now had 39 record high closes on the Dow in 2013. The trend is in place, firmly. The rise in the Dow Jones industrials continues to be confirmed by an associated rise in the Dow Jones Transportation Average. A look at the S&P 500 also shows a clear breakout at the top multiyear resistance level. The breakout may be false, due to the lack of active participation, as evidenced by light volume. So far, it has held up pretty well, contrary to its overbought condition. Everything is pointing higher as long as the Fed continues to pump money into the economy; and it looks like they will continue until March, although they could start to taper in January or December. Or maybe Bernanke will go …

READ MORE →
Uncategorized

Friday, July 26, 2013 – Notes from the Favela

Notes from the Favela by Sinclair Noe DOW + 3 = 15,558SPX + 1 = 1691NAS + 7 = 3613 10 YR YLD – .01 = 2.56%OIL – .82 = 104.67GOLD – .30 = 1334.80SILV – .26 = 20.09 Earlier in the week, the Dow and S&P hit record highs but the markets slipped; earlier today the Dow was down 150 points. For the week, the Dow rose 0.1 percent, the S&P 500 was flat (even as it hit a record) and the Nasdaq rose 0.7 percent. It’s Friday, and I have a bunch of notes and scraps that have been piling up, so we’ll clean the desk, in no particular order. The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment climbed to 85.1 from 84.1 in June, topping expectations for 84. It was the highest level since July 2007 and was also an improvement from July’s initial reading of 83.9. Of course, if you paid a premium subscription, you could have had that information before the rest of the market. Yesterday, I mentioned former Fed Chairman Paul Volker’s remark that the only real financial innovation in the past 20 years was the ATM, which is actually about 30 years old now. And Volker wasn’t quite right; the banks haven’t done any real innovation but the hackers have. For nearly a decade, a band of cybercriminals rampaged through the servers of a global business who’s who: Among the victims were 7-Eleven, Dow Jones, Nasdaq, JetBlue …

READ MORE →
Uncategorized

Monday, June 03, 2013 – Cardboard Cutouts, Inflatable Tanks, and the G-8

Cardboard Cutouts, Inflatable Tanks, and the G-8 by Sinclair Noe DOW + 138 = 15,254SPX + 9 = 1640NAS + 9 = 3465 10 YR YLD – .03 = 2.13%OIL + 1.42 = 93.39GOLD + 22.90 = 1412.20SILV + .48 = 22.84 Have you ever heard the expression “Potemkin Village”? That expression which dates back to the story about the head of Russia’s Crimean military campaign, who allegedly created false villages along the Dnieper River to reassure Czarina Catherine II that all was well as she sailed past. Have you ever heard of the Ghost Army? Also, known as the 23rdHeadquarters Special Troops, an elite force whose specialty was tactical deception, they proved their value in World War II. The Ghost Army, some 1,100 men in all, ended up staging more than twenty battlefield deceptions between 1944 and 1945, starting in Normandy two weeks after D-Day and ending in the Rhine River Valley. They used inflatable tanks and airplanes and recordings of the sounds of an army to trick the Germans into thinking there were troops where there weren’t. Have you heard about the G-8 economic conference coming to Northern Ireland in a couple of weeks? Northern Ireland has had a tough time over the past few decades, and in the small town where the G-8 will be meeting, there are quite a few closed down businesses and shuttered storefronts. So, in anticipation of the economic conference, they have been been doing some purely cosmetic surgery. Painting the windows of …

READ MORE →
Uncategorized

Thursday, May 23, 2013 – Premature Punch Bowl Withdrawal

Premature Punch Bowl Withdrawal by Sinclair Noe DOW – 12 = 15,294SPX – 4 = 1650NAS – 3 = 345910 YR YLD un = 2.02%OIL + .01 = 94.29GOLD + 21.80 = 1392.50SILV + .36 = 22.73 Yesterday, Fed Chairman Bernanke delivered testimony before the Joint Economic Council and then the minutes from the most recent FOMC meeting were released. The Fed policymakers seem concerned about bubbles. Stock markets have been hanging out near record highs, the S&P is up about 15% year to date. Look back to earlier this year. The boring stocks led us higher. Your mega-cap, super-safe, dividend-paying names were the stocks to own. These stodgy companies sprinted higher for weeks. Safe became the new speculative. Next, the rally broadened. First, it was short squeezes. Then, the rally focused on the more cyclical names. Energy stocks have found a second wind. Small-caps were. Technology names began pushing the market higher. Bloomberg reports that the most indebted US companies are rallying more than any time in almost four years compared with the rest of the market. The bulls argue that stocks will keep going up,even if the Fed takes away the QE punchbowl; the argument is that there are record corporate profits. But then we have to ask why there are record corporate profits. The answer is the Fed’s accommodative monetary policy. The Fed is effectively subsidizing earnings by providing cheap credit for the federal government. Government spending replaces paychecks as a source of income for consumers to consume. Corporations …

READ MORE →
Uncategorized

Tuesday, May 21, 2013 – Apple Gimmicks

Apple Gimmicks by Sinclair Noe DOW + 52 = 15,387SPX + 2 = 1669NAS + 5 = 350210 YR YLD – .02 = 1.94%OIL – .98 = 95.95GOLD – 18.10 = 1377.00SILV – .49 = 22.53 It’s Tuesday. The markets moved higher. It’s almost inevitable. The Dow Industrials have closed higher every Tuesday this year, with the exception of January 8th; 19 consecutive Tuesdays. No, I don’t know why. Well, today, part of the reason could be traced to the Federal Reserve. A couple of Fed heads were talking up easy money. New York Fed President William Dudley said he cannot be sure whether policymakers will next reduce or increase the amount of purchases, due to the “uncertain” economic outlook. The QE taper may end up being a QE expansion. Dudley worries about investor over-reaction to a “normalization” of policy and suggests the FOMC may need to update what it needs to see to move in that direction. Earlier, James Bullard, president of the Federal Reserve Bank of St. Louis, urged the European Central Bank to consider employing a US style quantitative easing program to counter slowing inflation and recession in the euro zone. Tomorrow, Fed Chairman Ben Bernanke will speak before a congressional panel, the Joint Economic Committee. The minutes of the Fed’s latest policy-setting meeting will be released on Wednesday afternoon. When the Fed showers liquidity, the money flows to the markets, but I can’t give a good reason for the Tuesday winning streak. There is a certain …

READ MORE →
Uncategorized

Friday, May 17, 2013 – Squirrel

Squirrel by Sinclair Noe DOW + 121 = 15354SPX + 17 = 1667NAS + 33 = 349810 YR YLD +.08 = 1.95%OIL + .83 = 95.99GOLD – 25.70 = 1361.20SILV – .43 = 22.36 Record highs for the Dow and the S&P 500; marking the fourth consecutive week of gains. For the week, the Dow gained 1.6%, the S&P 500 gained 2%, and the Nasdaq was up 1.8%. The S&P 500 is up about 13% year to date. Someone asked me yesterday if I intended to talk about the scandals in Washington; you know, the Benghazi scandal, the IRS scandal, and the Associated Press scandal. I suppose we can talk about that if you want.The issue I might address right now is, what does all the scandal-mongering mean for the economy? Well, we could look to the Clinton years, which continued to perform handsomely, but I think that had more to do with the dot.com boom than with Clinton’s proclivity. Greenspan warned about irrational exuberance while fostering policy that just pumped the markets to higher highs. Not so different really from Bernanke’s warnings about excessive risks while continuing with QE to infinity and beyond. The market has been profiting from the indulgences of the Fed’s easy money, and the Chairman seems more worried that Congress will busy itself with more fiscal austerity in the form of quick-timed spending sequesters and additional tax increases than he is about inflation from easy money. Unspoken is the fear certainly in the Fed quarters …

READ MORE →
Uncategorized

Levitational Tools by Sinclair Noe DOW + 48 = 15,105SPX + 6 = 1632NAS + 16 = 341310 YR YLD – .02 = 1.76%OIL + .99 = 96.61GOLD + 21.80 = 1475.40SILV – .01 = 24.05 Another day, another record high. What’s behind this? Nouriel Roubini weighed in from a conference in Las Vegas. Roubini is a professor at NYU and former Senior Economist for the White House Council of Economic Advisors, and notably, one of the few economists to anticipate the collapse in the housing market. Roubini identified the levitational forces, the forces lifting the markets, on “QE, zero policy rates, more money coming into the market, not just from the US, but from other economies” as the reason behind rising asset prices. Roubini also said: “Growth is slow. Earnings growth is also slowing down. Top line and bottom line are not as good as they used to be, but margins are high. They could correct somehow over time.” His best guess is that it could go on for a couple more years. Why two years? Roubini says: “recent data have effectively silenced hints by some Federal Reserve officials that the Fed should begin exiting from its current third (and indefinite) round of quantitative easing (QE3). Given slow growth, high unemployment (which has fallen only because discouraged workers are leaving the labor force), and inflation well below the Fed’s target, this is no time to start constraining liquidity.” Let’s take this a step further; with inflation running at about …

READ MORE →

Monday, April 22, 2013 – Airplanes, Austerity, and Flying Bulls

Airplanes, Austerity, and Flying Bulls by Sinclair Noe DOW + 19 = 14,567SPX + 7= 1562NAS + 27 = 3233 10 YR YLD – .01 = 1.70%OIL + .80 = 88.81GOLD + 19.80 = 1427.30SILV + .12 = 23.51 It’s Monday but it’s a better Monday than last Monday. No bombings to report today, at least not in our country. Over the weekend, the cover story on Barron’s magazine featured a cartoon drawing of a bull on a pogo stick, leaping through the air. You may recall that 6 months ago, Barron’s poll of big money, institutional investors were bearish on the market; that was about 1,000 points ago. Now they’re bullish. This would be a contrary indicator. But not today. Today, the bulls were buying the dips. The market started negative but finished positive. It’s all about momentum. Many fundamentally-oriented investors have been licking their wounds. And the nature of momentum-driven investing is that it can work longer than more sober-minded souls would think possible. An open question is the odd continued rise of stock prices even as corporate earnings weaken. Why are investors paying more for companies whose earnings are declining in aggregate? In normal bull markets, you see a new leadership group emerge, and late in cycle, investors increasingly favor conservative stocks. This time the leaders are defensive plays, high quality companies that pay healthy dividends. While bulls say that this is predictable given ZIPR, we’ve had ZIPR for years now.When this disconnect ends is anyone’s guess. But markets like this …

READ MORE →

Friday, February 08, 2013 – The State of the Union is Contradictory

The State of the Union is Contradictory by Sinclair Noe DOW + 48 = 13,992SPX + 8 = 1517NAS + 28 = 319310 YR YLD un = 1.95%OIL -.06 = 95.77GOLD – 3.80 = 1668.20SILV – .03 = 31.53 The State of the Union is… Tuesday. Do we have a solid economic recovery underway? The evidence will leave you whipsawed. Everywhere you turn, it seems, there is an economic contradiction. Housing is up, but gross domestic product was sharply down in December, almost to recessionary territory. The economy has lost 3.2m jobs since 2007, but 5.2m have been created since 2009. Even so, the number of unemployed far outpaces the number of jobs. The Center on Budget and Policy Priorities says: “In November 2012, 12 million workers were unemployed but there were only 3.7m job openings. That is about 10 unemployed workers for every three available positions – in other words, even if every available job were filled by an unemployed individual, about seven of every 10 unemployed workers would still be unemployed.” The jobless rate keeps dropping, but the ratio of employed-to-unemployed people is about the same as last year. The economy gained 181,000 jobs a month last year, but the percentage of people who have been unemployed for more than 27 weeks has stayed relatively steady. People are working more hours, but productivity is falling. And economic output has almost ground to a halt, growing by 0.1% in December. Households are becoming less indebted, which is a welcome …

READ MORE →