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Wednesday, September 5, 2012 – Just Waiting and Being Productive

Just Waiting and Being Productive -by Sinclair Noe DOW + 11 = 13,047SPX – 1 = 1403NAS – 5 = 306910 YR YLD +.01 = 1.59%OIL +.44 = 97.72GOLD – 2.80 = 1694.40SILV – .09 = 32.37PLAT + 2.00 = 1577.00 We wait for the ECB and as we wait we try to remain productive.  Three months ago, George Soros said the powers that be in the euro-zone, which is another way of saying Germany, could still correct their mistakes and reverse the trend and make things right, and they had a three month window to get their act together. Soros delivered the speech on June 2nd. The European Central Bank meets tomorrow and there is a rumor floating around that that ECB President Mario Draghi is ready to announce a plan to buy unlimited sovereign debt of countries that formally request assistance and agree to be bound to fiscal compliance.  So far, it is just a rumor but we have seen Italian and Spanish bond yields have dropped sharply. The German Constitutional Court is ruling on whether the ESM is constitutional, and German manufacturing is contracting; so the timing presents some challenges. The German Finance Minister today said people should lower their expectations. I don’t know what that means. Maybe Draghi has managed to cobble a deal to allow unlimited bond purchases; we won’t know until Thursday night, Friday morning; if a deal is in place it is a big deal. If a deal is not announced, it won’t …

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Friday, August 31, 2012 – Trout Fishing in America Benny

Trout Fishing in America Benny – by Sinclair Noe DOW + 90 = 13090SPX + 7 = 1406NAS + 18 = 306610 YR YLD -.06 = 1.56OIL + 1.75 = 97.51GOLD + 36.30 = 1692.60SILV + 1.30 = 31.84PLAT + 33.00 = 1545.00 First, let’s wrap up the month of August compared to July 31: DOW = 13,008 (up 82 for month)SPX = 1379 (up 27 mo)NAS = 2939 ( up 127 mo)10 YR YLD = 1.49 ( up .07 mo)OIL = 89.89 (up 7.62)GOLD = 1615.90 (up 76.70)SILV = 28.10 (up 3.74PLAT = 1421.00 (up124.00) Every August, the world’s financial markets shift their attention from the centers of global commerce — New York, London, Tokyo — to a mountain valley in northwest Wyoming. And for a day at least, Jackson Hole becomes the financial center of the globe. Why? The answer is trout. And it goes back to former Fed chairman Paul Volker, who enjoyed fly fishing. And yesterday, Bloomberg News marveled at the sight of Ben Bernanke at the airport, wearing blue jeans. Even central bankers wear jeans. It’s good to have these guys going fishing. It would be even better if they stayed in Jackson Hole and kept fishing and never went back. Chairman Ben Bernanke sent a clear message that the Federal Reserve will do something. We still don’t know exactly what or when. Bernanke described the U.S. economy’s health as “far from satisfactory” and noted that the unemployment rate, now 8.3 percent, hasn’t declined since January. …

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Friday, August 24, 2012 – Say It Ain’t So

Say It Ain’t So-by Sinclair Noe DOW + 100 = 13,157SPX + 9 = 1411NAS + 16 = 306910 YR YLD +.01 = 1.68%OIL – .44 = 97.47GOLD – .40 = 1671.70SILV +.24 = 30.92PLAT + 7.00 = 1554.00 Say it ain’t so Lance. The unbeatable Lance Armstrong; the guy who did so much with the yellow bracelets; he finally admitted he is a cheat. He used performance enhancing drugs. He doped. “Enough is enough,” that was Armstrong’s statement. I couldn’t agree more. And yet, even with this I have to take exception. You see, Armstrong didn’t admit guilt. He didn’t come clean. Armstrong will not contest the charges of doping against him. Weary from years of denial, legal battles, skirmishes with former-team mates and anti-doping chiefs, it is a fight Armstrong says he no longer has the stomach for: “Today I will turn the page,” Armstrong said. “I will no longer address this issue regardless of the circumstances.” He didn’t go through a discovery process that would have brought out all the sordid details and entered them into evidence. No, that might have allowed his corporate sponsors to claw back all those endorsement fees. So, Armstrong and his attorneys just say that’s it, enough is enough. This is what corporations do when they want to limit liability; make no mistake, Armstrong is a corporation.  Pay the fine, but do not admit guilt, give up the Tour de France championship but keep the money. The workers were already taking down …

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Wednesday, August 8, 2012 – Rogue Regulators, Central Bank Enablers, and a Jolt of Profit for Morgan Stanley

Rogue Regulators, Central Bank Enablers, and a Jolt of Profit for Morgan Stanley-by Sinclair Noe DOW + 7 = 13,175SPX + 0.87 = 1402NAS – 4 = 301110 YR YLD +.01 = 1.64%OIL +.07 = 93.42GOLD + .30 = 1613.60SILV – .06 = 28.14PLAT + 3.00 = 1414.00 The Dog Days Rally on Wall Street extended to day 4 but the dog is looking tired. The S&P 500 closed above 1400. The Nasdaq Composite closed above 3000 but finished slightly lower on the day. The volume was very light, so it’s hard to find strong conviction in the rally; still it is a rally, or it was. The main driver seems to be the idea that the ECB will, in fact, do whatever it takes to prop up the Euro-union. Today, the Bank of England gave little indication that it would rush to pour in further stimulus even as it cut its forecast for medium-term economic growth in Britain. France’s central bank forecast a contraction in growth going into the third quarter, citing weak demand from the periphery and Britain. The strange case of Standard Chartered Bank just keeps getting stranger. The British bank has been accused by a regulator from New York state of doing business with Iran in violation of sanctions. The regulator has threatened the bank’s charter in New York. The bank denies it did the dirty with the Iranians, or at least they deny they did as much as accused, maybe just a few million in …

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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 …

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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 …

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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%. …

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Wednesday, July 18, 2012 – A Primer on Money

A Primer on Money– by Sinclair NoeDOW + 103 = 12,908SPX + 9 = 1372NAS + 32 = 294210 YR YLD -.02 = 1.48%OIL +.72 = 90.26GOLD – 8.90- = 1574.50SILV -.13 = 27.28PLAT – 12.00 = 1412.00It’s earnings reporting season: Ebay profit more than doubles. IBM profit was up and they raised their outlook. American Express profit came in flat. I don’t think earnings have as much impact as they once did. Treasury Secretary Tim Geithner was speaking at a conference in New York. Geithner says the economy is definitely slower than we’d all like it to be. He cited 3 reasons: “It’s slower mostly because of the trauma from Europe, the after effects of the rise in oil prices earlier this year, and because government spending is actually falling now quite significantly. Those three things are a pretty significant drag on a recovery.”Geithner also defended his response, or lack thereof, to the Libor rate rigging scandal: “We acted very early in response to the concerns that the processes to set this rate were impaired and flawed, and vulnerable to misrepresentation,” he said. “The U.S., to its credit, set in motion at that stage a very, very powerful enforcement response, the first results of which we have now seen,” and “There is more to come,” he added, but provided no details. Four years after the fact, Barclays is fined; finally an investigation starts; maybe something will happen, wow, that was soooo powerful. Apparently Geithner never heard the phrase, justice delayed is …

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Thursday, July 17, 2012 – Accepting Unacceptable Manipulation or Dude, What Happened To My Pension

Accepting Unacceptable Manipulation or Dude, What Happened To My Pension?-by Sinclair NoeDOW + 78 = 12,805SPX +10 = 1363NAS + 13 = 291010 YR YLD +.04 = 1.50%OIL – .21 = 89.01GOLD – 6.20 = 1583.40SILV unchanged = 27.41PLAT + 1.00 = 1424.00Federal Reserve Chairman Ben Bernanke went to Capitol Hill today. He made some remarks; he took some questions; he did not surprise.  Bernanke said in his testimony:”Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to economic growth, the committee made clear at its June meeting that it is prepared to take further action.” Prepared to act but not acting right this moment. Nothing new. If you were looking for a signal, you didn’t really get it.Bernanke said the risks of a surge in inflation were low and that there was a modest risk of a broad-based decline in prices.Bernanke said  the Fed could also use communications tools, such as extending its pledge to hold rates exceptionally low. He cited the possibility of additional bond buying — whether Treasury debt or mortgage-backed securities — lending through the Fed’s emergency loan window, and lowering the rate the Fed pays banks on reserves held at the central bank. Which is almost a new idea. Holdings of cash and other liquid assets at US industrial corporations rose to $1.7 trillion in March 2012; that’s cash held in short-term and low-risk instruments, which is what the Fed has been selling to buy longer-term as part of …

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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 …

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