Uncategorized

Thursday, June 7, 2012 – Mr Bernanke Goes to Washington – by Sinclair Noe

DOW + 46 = 12460 SPX -0.14 = 1314NAS – 13 =283110 YR YLD unch = 1.65%OIL – 1.14 = 83.68GOLD -31.20 = 1589.50SILV -.84 = 28.69PLAT – 23.00 = 1447.00 The European Union released GDP was unchanged month to month and declined 0.1% from a year ago. Mari Draghi, the President of the European Central Bank announced that interest rates would stay at 1%. Draghi did not make a major policy announcement although it was widely anticipated that he would. However, he did state that the ECB would continue its main refinancing operations to provide liquidity to European banks. Fitch just cut its credit rating for Spain from A to BBB with a negative outlook. That’s the same credit rating as Kazakhstan. Fitch estimates the Spanish banking system will need between $60 and $120 billion in additional capital to cover potential losses on their domestic loan portfolios. Apparently the Grand Euro-plan is to maintain unbending monetary policy over multiple and diverse and increasingly frail economies with the justification that there is no gain without pain and suffering will eventually make you feel better, combined with a lack of unity and failure to cooperate on anything other than the destruction of democratic processes imbued with a hint of hubris that the technocrats are much smarter than the hoi polloi despite a seemingly non-stop rainstorm of random policy blunders and dogged consistency in remaining behind the curve. Yesterday I told you: “Still, the market was looking for the Fed to ride …

READ MORE →
Uncategorized

Wednesday, June 06, 2012 – Rally for Central Bank Juice – by Sinclair Noe

DOW + 286 = 12,414 SPX + 29 = 1315NAS + 66 = 284410 YR YLD +.10 = 1.65%OIL +.51 = 85.53GOLD + 2.80 = 1620.70SILV +.90 = 29.53PLAT + 26.00 = 1468.00 There have been several ideas floated to explain today’s rally on Wall Street: the markets were oversold, it was a technical bounce off the 200 day moving average, it was a dead cat bounce, traders who have shorted the market had to cover their positions, a response to Election Tuesday results, seller exhaustion, re-balancing, or my favorite – bargain hunting. How quick we forget. Goldman Sachs has already announced they expect the Federal Reserve to juice the economy and soon. So, apparently the work order has been submitted and now we just wait to see if Helicopter Ben can deliver the goods. Today, the general market feeling was that some central bank somewhere would start throwing money at the banksters. European Central Bank President Mario Draghi suggested that further stimulus to tackle the euro zone’s debt crisis would not necessarily be forthcoming, but speculation persisted that the ECB could act if financial market tensions intensify further. The ECB left interest rates unchanged following its policy meeting today. The Euro economy is standing at the edge; unemployment is soaring; the Spanish banking system is on the verge of collapse; Greece is already toast. And it looks like the ECB is trying to make sure the Euro-politicians know they won’t get any relief unless they enforce even more austerity …

READ MORE →
Uncategorized

Tuesday, May 29, 2012 – Dithering About Europe – by Sinclair Noe

DOW + 125 = 12,580SPX + 14 = 1332NAS + 33 = 287010 YR YLD -.01 = 1.73%OIL +.08 = 90.84GOLD – 18.90 = 1555.80SILV -.55 = 27.98PLAT – 9.00 = 1432.00 The reason du jour for today’s market gains: positive news regarding Greece. Really? I’m not buying it. Make up your own reason for today’s gains because we are just as likely to see declines tomorrow. Still, Europe is important. Philadelphia Federal Reserve Bank President Charles Plosser said Monday that people in the United States have no need “to get all in a dither” over Europe’s debt crisis. Plosser feels that Europe’s economic problems could even benefit the US in the short term. It is “not an unreasonable argument,” he said, that low US interest rates and gas prices in response to the uncertainty in Europe’s financial situation could offset any potential difficulties for the American economy. Plosser said Europe “is just throwing a lot of noise into the system right now. It makes reading the tea leaves particularly difficult right now.” He noted, however, that a “flood of liquidity” into the US seems much more likely than investors running from US financial institutions. But, he added, the Fed will be able to deal with any fallout from Europe’s economic troubles. He believes the Fed has the necessary tools to deal with the situation, no matter what the situation. So, how is the Euro situation likely to be resolved? Well, the Greek election is June 16, so the Euro …

READ MORE →
Uncategorized

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 …

READ MORE →
Uncategorized

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 …

READ MORE →
Uncategorized

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. …

READ MORE →
Uncategorized

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 …

READ MORE →