Uncategorized

Friday, September 28, 2012 – Eat Cake

Eat Cake by Sinclair Noe DOW – 48 = 13,437SPX – 6 = 1440NAS – 20 = 311610 YR YLD un = 1.64%OIL + .25 = 92.10GOLD – 6.50 = 1772.10SILV – .17 = 34.59PLAT + 13.00 = 1669.00 There are bad things and they are bad. There are good things and they are good, even though the bad things are bad. Let me give you an example; You probably know I’m not a fan of the Federal Reserve. I believe there are better ways to conduct monetary policy. This does not mean the Fed’s monetary policy doesn’t work. You’ve heard the old adage, “don’t fight the Fed”. In case you haven’t noticed, the stock market has doubled in the past 3 1/2 years. That’s good, even though the bad things about the Fed remain bad. And the stock market has been performing much better than seems possible. As the third quarter comes to an end you might think about the problems in Europe and the slowdown in China; you might think about the slowdown in the US with the economy growing at an anemic 1.3% pace, the seemingly never ending housing recovery, the interminably high unemployment; and you might think of the looming fiscal cliff and the dysfunctional political bickering as corrosive elements sucking the life blood out of the economy; and you might think the best investment opportunities are in freeze dried foods and concrete bunkers – but no. The stock market has been sweet. The S&P 500 …

READ MORE →
Uncategorized

Thursday, August 30, 2012 – While We Wait for Fed, Banks Behave Badly

While We Wait for Fed, Banks Behave Badly -by Sinclair Noe DOW – 106 = 13,000SPX – 11 = 1399NAS – 32 = 304810 YR YLD -.03 = 1.62%OIL – .67= 95.88GOLD – .80 = 1656.30SILV -.29 = 30.54PLAT – 11.00 = 1512.00 Federal Reserve Chairman Ben Bernanke has returned to Jackson Hole Wyoming for the annual economic symposium.  Following the minutes of the most recent FOMC meeting, in which we learned the Fed felt compelled to take action unless the economy shows dramatic improvement, there has been general acknowledgment the Fed must certainly act sooner rather than later. Sooner being tomorrow or later being at the next FOMC meeting September 13th.  And although it is unlikely Bernanke will announce a major new program tomorrow, he must at least telegraph. Any new Fed actions are likely to have only a small effect on job creation. Among possible options, Bernanke might announce he’ll extend the Zero Interest Rate Policy to late 2014 or into 2015. He could move toward QE3, another round of bond purchases, most likely involving Treasury bonds and mortgage bonds. This would flood money into the economy and housing market, pushing record-low interest rates even lower. Both republicans and democrats have weighed in. Democrats say he should not be deterred from doing what’s needed to reduce unemployment; Republicans say new action should be avoided because of the risk of inflation. So we have a question of whether inflation or no job is the main culprit to eroding incomes.  …

READ MORE →
Uncategorized

Monday, July 09, 2012 – Barclays Did Not Act Alone – Reaching Into the Upper Echelon

Barclays Did Not Act Alone – Reaching Into the Upper Echelon-by Sinclair NoeDOW – 36 = 12,736SPX – 2 = 1352NAS – 5 = 293110 YR YLD -.03 = 1.51OIL -.34 = 85.65GOLD + 4.90 = 1588.30SILV  + .24 = 27.44PLAT – 2.00 = 1449.00Alcoa kicked off the second quarter earnings reporting season. Alcoa has the ticker symbol AA and they are one of the 30 stocks in the Dow Industrials, so they start the earnings season based on alphabetical order and size and a little bit of tradition. Alcoa lost $2 million for the quarter. With an overhang of high inventories and a 20 percent drop in prices since March, many aluminum producers are losing money. Excluding items, also known as the cost of doing business, Alcoa earned $61 million from continuing operations, or 6 cents per share, which topped estimates of 5 cents per share. Later this week we’ll have earnings reports from some of the big banks, so it seems appropriate that Alcoa start earnings reporting season with some flashy accounting. Based upon this loss, they will probably get a tax refund. President Obama called on Congress to extend tax cuts for families earning less than $250,000 a year while allowing taxes to rise for households making more.Obama said: “Let’s not hold the vast majority of Americans and our economy hostage while we debate the merits of another tax cut for the wealthy.”Obama wants Congress to pass a one-year extension of the Bush-era tax cuts for households making …

READ MORE →
Uncategorized

Thursday, June 21, 2012 – Like Crack for Bankers – by Sinclair Noe

DOW – 250 = 12,573SPX – 30 = 1325NAS – 71 = 285910 YR YLD – .02 = 1.62%OIL – 3.20 = 78.25GOLD – 41.60 = 1566.20SILV – 1.24 = 26.98PLAT – 19.00 = 1445.00Here is the bottom line on today’s declines; Wall Street has become addicted to free money from the Federal Reserve. Stimulus from the Fed is like crack for the Wall Street bankers. Yesterday, the Fed refused to pass out more free money. Today, Wall Street got a bad case of the shakes.One of the concerns when Bernanke and pals fail to act is that they can’t really think of anything they might do that would have any real effect, or maybe they’re satisfied with 2% inflation and 8.2% unemployment. So what if Bernanke doesn’t have any more ammo?Then we are left to the devices of fiscal policy, in other words; what can the politicians in Washington do to stimulate the economy? The most likely answer is that the politicians can drive the economy over a cliff. While that might seem cynical, it’s really just pragmatic. And then, of course there is the Lehman Brothers event with subtitles looming in Europe. If Europe collapses, the thinking is that Bernanke will find a few more bullets in the form of QE3, and he will once again toss money at the Wall Street bankers. The Wall Street crack whores will fire up their pipes and place “risk-on” trades with the certainty that the Fed will place a put against any …

READ MORE →
Uncategorized

Tuesday, May 01, 2012 – The Return of Occupy Wall Street

DOW + 65 = 13, 279 SPX + 7 = 1405NAS + 4 = 305010 YR YLD +.04 = 1.96%OIL – .15 = 106.01GOLD – 2.10 = 1663.20SILV -.04 = 31.07PLAT + 3.00 = 1577.00 The Dow Industrials hit the highest point since December 2007. Later this week we’ll have reports on retail sales and the big monthly jobs report on Friday. Today, the ISM reported their manufacturing index rose to 54.8% last month from 53.4% in March. The results were much better than anticipated. We may have hit a top in the stock market: Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as corporate earnings increase over time. “Stocks are very cheap,” Greenspan said today at the Bloomberg Washington Summit hosted by Bloomberg Link, citing “a very low price-earnings ratio. There is no place for earnings to grow except into stock prices,” I mean, when Greenspan speaks it must be a contrary indicator. Today is the one year anniversary of the killing of Osama bin Laden. President Obama is in Afghanistan, and he’ll deliver a speech a little later. Today is also May Day. Occupy Wall Street is back; trying to resurrect the movement with May Day marches, which gained momentum through the day. Protesters marched on banks, chanted anti-corporate slogans, and clashed with police in an opening day of sorts for the movement’s summer revival. In New York, hundreds of protesters gathered in Union Square. A crowd surged out …

READ MORE →
Uncategorized

Thursday, April 19, 2012 – Say on Pay Just Says No to Citigroup, BofA Loses by Winning, and the Risky World of Derivatives

DOW – 68 = 12,964SPX – 8 = 1376NAS – 23 = 300710 YR YLD -.03 = 1.95%OIL -.01 = 102.66GOLD +.60 = 1643.60SILV + .17 = 31.90PLAT + 3.00 = 1587.00 Vikram Pandit, the CEO of Citigroup was “this close” to a $15 million dollar payday. And then shareholders slammed on the brakes and demanded the amount be toned down. It might be a trend. Wells Fargo and Bank of America will ask shareholders to vote on executive pay in coming weeks, and the results at Citi might influence the voting at Wells and BofA. Yesterday, shareholders rejected the compensation plan of regional bank FirstMerit Corp., of Akron, Ohio. The bank gave its CEO a pay raise to $6.4 million last year from $5.5 million, while its stock fell 20 percent. “Say-on-Pay” votes by shareholders were a requirement of the Dodd-Frank financial reform Act, and it looks like 90% of the compensation packages are winning approval, but the margin is slim. The Occupy movement plans to protest at 36 shareholder meetings this spring and the investment community seems to be waking up from a long nap of disengagement. The California Public Employees Retirement System, or CalPERS, voted no on the Citigroup pay measure because Citi “has not anchored rewards to performance.” Unfortunately, the only reason CalPERS voted against the pay package was because Pandit’s performance was beyond incompetent. What is the appropriate role for CalPERS? Shouldn’t they stand up for their members? Chief executives at some of the nation’s …

READ MORE →
Uncategorized

Thursday, April 5, 2012

DOW – 14 = 13,060 SPX – 0.88 = 1398NAS + 12 = 308010 YR YLD – .07 = 2.17%OIL + 1.78 = 103.25GOLD + 10.90 = 1632.30SILV +.38 = 31.84PLAT + 7.00 = 1609.00 The big jobs report is due out tomorrow morning 5:30 AM pacific time. The nonfarm payroll report is typically the biggest economic report of the month. And tomorrow’s report will be unique because the stock market will be closed for Good Friday. Today we saw a report that initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 357,000, the lowest level since April 2008. New claims have fallen sharply in recent months, boosting expectations the end of a long cycle of heavy layoffs will lead to more hiring. The weekly report does not have a direct relationship with the March employment report due on tomorrow morning. In Europe, Spanish bond yields moved higher, renewing concerns about the euro zone’s financial health. Prices for U.S. government debt rose while the euro weakened against the dollar. The European Central Bank’s emergency lending program launched last December was supposed to give Europe’s troubled banks and sovereigns three years of relief. But just months later, the medicine is already wearing off. That’s the problem with trying to fix a solvency problem with liquidity—it doesn’t last. Spain is the new epicenter. Demand for the nation’s debt slumped this week, forcing the government to pay 4.3 percent on five-year bonds, nearly a percentage point more than in March; …

READ MORE →