Uncategorized

March, Thursday 08, 2012

DOW + 70 = 12907SPX + 13 = 1365NAS + 34 = 297010 YR YLD +.04 = 2.01%OIL + .69 = 106.85GOLD + 15.20 = 1699.50SILV +.45 = 33.98PLAT  + 32.00 = 1665.00 A couple of months ago we were talking about the situation in Greece; this has turned into the never-ending-story. I told you that the smart boys and girls at the Federal Reserve and the various central banks around the world believed that they learned a lesson in 2008, and they were determined not to let Greece become the subtitled sequel to the Lehman Brothers Debacle. And so today was the deadline for the private sector investors to approve the deal for a 75% haircut on Greek bond holdings and avert a meltdown. And the deal was done. The assorted Central Bankers have primed pump; they have rolled out tow tranches of the Long Term Refinance Operation in Europe, dumping more than a trillion dollars worth of easy cash on the Euro-banks. If you want to cram down a few billion dollars worth of lousy Greek bonds, it turns out that a trillion dollars or so of free money is very persuasive. Greek government officials said  that more than 75 percent of eligible bonds have been committed. Greece will swap their old bonds for new bonds, wiping out 105 billion-euro in debt in the swap. The deal will not solve Greece’s deep-seated problems and at best it may buy time for a country facing its biggest economic crisis …

READ MORE →
Uncategorized

March, Monday 05, 2012

DOW – 14 = 12,962SPX – 5 = 1364NAS -25 = 295010 YR YLD +.02 = 2.00%OIL +.42 = 107.12GOLD – 4.60 = 1707.40SILV -.73 = 34.10PLAT – 34.00 = 1671.00 Resource Consultants 800-494-4149 Last week, Federal Reserve Chairman Ben Bernanke went to Capitol Hill and mumbled a little and the general consensus was that the Fed would not be throwing money out of a helicopter any time soon, and the markets dipped and gold dumped. Today, Federal Reserve bank of Dallas president , Richard Fisher gave a speech in Dallas, and he was a bit more plainspoken about the economy and QE3. He said, “I would suggest to you that, if the data continue to improve, however gradually, the markets should begin preparing themselves for the good Dr. Fed to wean them from their dependency rather than administer further dosage.” Fisher said financial markets “have become hooked on the monetary morphine we provided” after the 2008 financial crisis. He added, “I am personally perplexed by the continued preoccupation, bordering upon fetish, that Wall Street exhibits regarding the potential for further monetary accommodation — the so-called QE3, or third round of quantitative easing.” Allow me to explain. The economic news is looking better lately. But after previous false starts — remember “green shoots”? — it would be foolish to assume that all is well. And in any case, it’s still a very slow economic recovery by historical standards. And the problems with bad debt and derivatives haven’t really changed, and …

READ MORE →
Uncategorized

January, Thursday 12, 2012

DOW + 21 = 12471SPX + 3 = 1295NAS + 13 = 272410 YR YLD +.03 = 1.93%OIL –1.65 = 99.22GOLD + 5.60 = 1649.60SILV + .28 = 30.35PLAT + 2.00 = 1504.00 In 2011, the market value of U.S. stocks went nowhere from the first trading day, January 3, to the last trading day, December 30. And I mean absolutely nowhere. The S&P 500 started the year at 1,257.64 and ended the year at 1,257.60. While the market value of the S&P 500 was going absolutely nowhere, its valuation was plummeting. S&P 500 trailing 12-month earnings (through September 30, 2010) started last year at $79 a share and ended the year at $94.64 per share. That means earnings grew at nearly 20%, but prices went nowhere. In fact, prices have gone nowhere for the past 12 years. That’s not exactly true – we are pretty much where we were 12 years ago, but prices moved quite a bit in between. We get into overbought and oversold positions. The question is: where can we find opportunity? Standard & Poor’s classifies every individual stock into one of ten primary sectors. They then publish specific indexes for each sector (as well as dozens of sub-sectors within the ten primaries). The worst performing S&P sectors for 2011 Financials (-18.4%), Materials (–11.6%), and Industrials (-2.19%). The top performers included Utilities, consumer staples, and health care. Only 3 of the ten sectors were down but the S&P 500 is capitalization weighted; that means each stock …

READ MORE →
Uncategorized

January, Tuesday 10, 2012

DOW + 69 = 12,462SPX + 11 = 1292NAS +25 = 270210 YR YLD +.01 = 1.97%OIL +.84 = 102.15GOLD +21.20 = 1633.20SILV +.89 = 30.04PLAT + 39.00 = 1467.00  The S&P 500 Index moved back to its highest level since July. There was positive reaction to earnings. Alcoa kicked off the earnings reporting season by announcing they lost $193 million dollars in the fourth quarter. Go figure. Is the economy facing inflation or deflation? The answer is – yes. Two Federal Reserve officials laid out contrasting views of Fed attempts to bolster the economy, with one seeing a need for more asset purchases and another warning that current accommodation risks provoking instability. Federal Reserve Bank of San Francisco President John Williams sees a “strong” case for new purchases of mortgage bonds given his expectation that inflation will fall below 1.5 percent this year. His counterpart in Kansas City, Esther George, said officials must weigh whether their current policy is increasing the odds of renewed financial turmoil. In his speech, Williams credited the Fed’s emergency lending to financial institutions with keeping the U.S. economy from falling into an abyss in 2008 and 2009. He said it’s “vital” for policy makers to support an economy that’s hobbled by high unemployment, anemic spending and a weak housing market. Williams thinks the Fed should provide more stimulus for the economy. George, in her speech said “the economy is going through a deleveraging process and that takes time. Efforts to speed up that process run …

READ MORE →