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Friday, May 18, 2012 – Europe, Before the Flood – by Sinclair Noe

DOW – 73 = 12,369SPX – 9 = 1295NAS – 34 = 277810 YR YLD un = 1.70%OIL – .57 = 93.41GOLD + 17.80 = 1593.10SILV +.67 = 28.82 PLAT + 2.00 = 1461.00 “He hath indeed better bettered expectation than you must expect of me to tell you how.” The Facebook Frenzy turned out to be a fairly orderly IPO. Share prices fluctuated but did not collapse nor did they soar; which means the price and quantity were about right; the underwriter was competent and reasonably accurate. The NASDAQ had some trouble executing trades but that was a relatively minor problem. Now, the new Facebook millionaires and billionaires have some heavy lifting to prove their value. Time will tell, and good luck to them in their efforts. FB +.23 = 38.23 I know its the biggest internet IPO ever, but in reality it’s much ado about nothing. The European economic crisis is expected to top the agenda at the G8 meeting tomorrow at Camp David. In Greece, voters will soon head to the polls for another round of elections which will be viewed by many as a referendum on the euro. The European Commission and the European Central Bank have been working on contingency plans in the event of a Greece exit from the 17-nation euro zone. Concern about whether Greece’s troubles would spread to other European nations hit the market last fall. It’s hard to imagine between what went on last fall and now, that a lot of …

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Wednesday, May 9, 2012 – Greek Government, Spanish Banks, Gold Prices – It’s All Messy

DOW – 97 = 12,835SPX – 9 = 1354NAS – 11 = 293410 YR YLD unch = 1.84% OIL – .56 = 96.45GOLD – 15.40 = 1590.40SILV – .20 = 29.37PLAT – 12.00 = 1505.00 The Greek tragedy continues; no success so far in negotiations to form a coalition government after weekend elections resulted in a deadlock. It looks like there might be another election in June. The Greeks accepted another $5 billion dollar bailout payment today, so they keep the government afloat for a few more weeks. Now, the chatter is shifting to the very real idea that Greece will exit the Euro, and trying to figure out the implications. The concern is that exiting the Eurozone is going to be impossible and possibly will trigger a cascade of bad economic consequences. Absolutely right, but only because it might be done in an uncontrolled manner. The Federal Reserve and the ECB and the IMF and all the others have been saying that the Euro-crisis is under control. If, or when Greece exits the Euro, nobody should be surprised; this train has been rolling down the track for a couple of years, and the Germans and ECB and IMF and Fed all had plenty of time to come up with solutions. And they didn’t. So, now the Greek voters have come up with a solution. They didn’t come up with a unanimous decision, not even a plurality. The whole thing was a crazy mish-mash of votes, ranging from communists to …

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Thursday, May 3, 2012 – Jobs More or Less, Europe More or Less, HSBC Mess

DOW – 16 = 13, 206SPX – 10 = 1391NAS – 35 = 302410 YR YLD unchanged = 1.92%OIL +.09 = 102.63GOLD – 17.90 = 1636.80SILV – .58 = 30.17PLAT – 28.00 = 1540.00 Tomorrow the government releases the employment report for April. Economists predict the U.S. gained 160k to 175k jobs last month, up from a disappointing 120,000 in March. The preliminary increase in March was the lowest in five months and fell well short of the 246,000 average from December to February. We’ve seen several reports on jobs that might give a hint on tomorrow’s report: The four-week average of initial jobless claims was 383,500.Jobless claims declined by 27,000 to a seasonally adjusted 365,000 in the week ended April 28. The Labor Department said continuing claims decreased by 53,000 to a seasonally adjusted 3.28 million in the week ended April 21. Continuing claims reflect people already receiving benefits. ADP’s report on private-sector payrolls slowed to 119,000 from 201,000 in March. The employment component of the Institute for Supply Management’s manufacturing report rose to 57.3% from 56.1%, on a scale where readings over 50% indicate expansion. The employment component of the Institute for Supply Management’s services report slowed to 54.2% from 56.7%, on a scale where readings over 50% indicate expansion. Planned layoff announcements rose 7% to 40,559, according to Challenger, Gray & Christmas. What does it mean? It means wait until tomorrow’s report and we’ll find out. This is not the kind of report that you bet on. …

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February, Tuesday 14, 2012

02142012 DOW + 4 = 12,878SPX – 1 = 1350NAS +0.44 = 293110 YR YLD -.07 = 1.92%OIL +.29 = 101.20GOLD – .80 = 1722.10SILV – .14 = 33.68PLAT – 26.00 = 1635.00 Over the weekend, the unelected technocrat Greek Prime Minister warned that if the terms of the second Greek bailout were not approved, there would be a “disorderly bankruptcy that would create conditions of economic chaos and social explosion. The savings of the citizens would be at risk. The state would be unable to pay salaries, pensions, and cover basic functions, such as hospitals and schools, and … the country – public and private sector alike – would lose all access to borrowing and liquidity would shrink. The living standards of Greeks would collapse. The country would drift into a long spiral of recession, instability, unemployment and prolonged misery. These developments would lead, sooner or later, to exit from the euro.” And so the Greek parliament voted to accept a plan to impose austerity on the already austere Greek economy in exchange for a 130-billion euro bailout needed to pay 14-billion in bonds that are set to be redeemed in March.  If there is a default on the bonds, it would likely start a process of national bankruptcy which in the first order would mean state pensions, wages, contracts and medical bills not being paid. From there, the insolvency would multiply outwards into the already deeply impaired private sector, where many businesses would find it impossible to stay …

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