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Tuesday, January 08, 2013 – Thank You, America

Thank You, America DOW – 55 = 13,328SPX – 4 = 1457NAS – 7 = 309110 YR YLD -.03 = 1.87%OIL +.06 = 93.25GOLD + 13.20 = 1661.10SILV + .24 = 30.50 Some people have debated what we should do if the banks get into trouble again; should they be bailed out? The Too Big to Fail Banks of 2008 are even bigger today, and if one collapses, then there would likely be a cascading effect through the global financial system. So, if a big financial institution gets into trouble, should there be a bailout, or do we just say “tough luck”? You probably have an opinion, and reasonable people can debate the issue, or at least there could be room for reasonable debate, until now. As of today, there is no more debate. If you go to Webster’s Dictionary and look up the word “ingrate”, you will find a picture of Maurice “Hank” Greenberg; the guy who founded American International Group, AIG, the huge insurance company that in 2008 accepted a $182 billion dollar bailout from the Treasury. Hank Greenberg, the former CEO of AIG is contending in a lawsuit that the government treated the company’s shareholders too harshly when carrying out its 2008 rescue of the insurance giant. AIG is weighing whether to join the lawsuit, filed by Mr. Greenberg’s investment firm, Starr International Company, which owns about 12% of AIG. In addition to founding AIG, Greenberg gained notoriety for a high profile fraud case in 2005 that …

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Monday, January 7, 2013 – I Went on Vacation and Not Much Changed

I Went on Vacation and Not Much Changed by Sinclair Noe DOW – 50 = 13,384SPX – 4 = 1461NAS – 2 = 309810 YR YLD -.01 = 1.90%OIL + .21 = 93.30GOLD – 9.90 = 1647.90SILV – .02 = 30.26 Forty years ago, Yale Hirsch at the Stock Traders Almanac, created the January Barometer. The idea was simple: as the S&P 500 goes in January, so goes the year. This market prediction tool has been correct 89% of the time since 1950, suffering only seven major setbacks. Since 1950, stocks have finished lower for the year only three times after posting gains in January. When the Dow is positive in January, then the rest of the year is positive 83% of the time, averaging additional gains of 9.59%. Compare that to the Dow’s performance when January is negative. In those years, the February-December returns are positive just half of the time, with an average gain of 2.04%. As with the full-year results, a positive January typically leads to a positive February. When the Dow closes higher in January, February goes on to average a return of 0.57%, and is positive 63% of the time. When January is negative, February is negative more than half the time, and averages a loss of more than 1%. However, an outsized return in January has not necessarily translated into a bigger return for February. If January is up more than 3.5%, the average February gain is not as big as if January is …

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Tuesday, December 18, 2012 – Blame It On Whatever You Want

Blame It On Whatever You Want by Sinclair Noe DOW + 115 = 13,350 SPX + 16 = 1446NAS + 43 = 305410 YR YLD +.06 = 1.83%OIL + .79 = 87.99GOLD – 27.20 = 1671.90SILV – .64 = 31.74 The markets rallied on news the fiscal cliff negotiations are closer to a resolution. No, no, wait a minute; the markets experienced a Santa Claus Rally. No, no, wait a minute; just make up whatever excuse you want. No, no, wait a minute; the Federal Reserve announced QE4 last week, even though we’re not supposed to call it QE4, and they are just printing money like banshees, although I’m not sure banshees know how to print money, but the point is they are juicing the economy to the tune of $85 billion a month, and you know that has to have some sort of effect. Why sure; all this money just has to end up in the stock market eventually. You might also expect the dollar to fall. You might also have expected additional strength in the government bond market, because $85 billion pretty much covers all of the expected new issuance going forward, plus many entities still need to buy U.S. bonds for a variety of fiduciary reasons. With little product for sale and lots of bids by various players; one of which, the Fed, has their own printing press and so money is no object in the move to drive prices higher and yields lower; that’s a recipe …

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Monday, December 17, 2012 – Unconnected Dots

Unconnected Dots by Sinclair Noe DOW + 100 = 13,235SPX + 16 = 1430NAS + 39 = 301010 YR YLD +.05 = 1.76%OIL +.71 = 87.44GOLD + 1.90 = 1699.10SILV -.03 = 32.38 President Obama and House Speaker Boehner met at the White House today. Aides from both parties said they were optimistic that a deal could be reached in the coming days to avert the “fiscal cliff,” as lawmakers set the stage for action before a year-end deadline. A senior Republican aide said: “There’s been too much progress at this point and neither guy wants to go over the cliff.” Although both sides still had major differences, investors were cheered by signs of progress. Major market indices moved higher in the afternoon, and some of that was the feel good part of the news cycle; we certainly need some good news. Now, we sit back and see whether it was yet another rumor. Boehner, the speaker of the Republican-controlled House of Representatives, has edged closer to Obama’s demand to raise taxes on the wealthiest Americans. In return, Obama is considering a measure that would slow the rate of growth of Social Security retirement benefits by changing the way they are measured against inflation. Boehner has put forward a tax increase for those earning over $1 million annually, while Obama wants that threshold set at $250,000. Republicans could probably stomach a tax hike on incomes above $500,000. Boehner could float the broad outlines of a deal with rank-and-file members on …

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Wednesday, December 12, 2012 – Life is Beautiful and Easy

Life is Beautiful and Easy by Sinclair Noe DOW – 2 = 13,245SPX +0.64 = 1428NAS – 8 = 301310 YR YLD +.05 = 1.70%OIL +.99 = 86.78GOLD + 1.20 = 1712.60SILV +. 45 = 33.55 And now, the DC Players present: The Grinch Who Stole Christmas, starring John Boehner. Speaking to reporters this morning, Boehner said: “We’re going to stay here right up until Christmas Eve, throughout the time and period before the New Year, because we want to make sure that we resolve this in an acceptable way for the American people.” Yesterday, we told you reporters in Washington were optimistic a deal could be reached; and we told you that story literally dripping with sarcasm, because we were fairly certain it was just idiot reporters projecting their own fantasy that they could spend the holidays with family and people posing as friends; it was a last gasp hope to shame inept and incompetent politicians to get a deal done. It didn’t work. Republicans and the White House appeared no closer to a deal, as both sides pressed each other to cede ground. Republicans want to extract spending cuts from the White House while the Obama administration is demanding that taxes go up for the wealthiest 2% of Americans. Wow, I just had a feeling of deja vu. It’s almost like I’ve heard this before. Washington has a way of diverting the nation’s attention on tactical games over partisan maneuvers that are symptoms of a few really big …

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Tuesday, December 11, 2012 – If Banks Could Kill They Probably Will

If Banks Could Kill They Probably Will by Sinclair Noe DOW + 78 = 13,248SPX + 9 = 1427NAS + 35 = 302210YR YLD +.03 = 1.65%OIL +.09 = 85.65GOLD – 2.20 = 1711.40SILV – .27 = 33.10 If all goes according to plan, in about 13 days, a star will rise in the east somewhere over Washington DC, signaling the birth of a new budget deal. If you’re waiting for three wise men, don’t hold your breath, because they couldn’t find them in our nation’s capitol. With just days to go before the nation slides down the fiscal Cliff Clavin of tax increases and spending cuts mandated by our confederacy of dunces to take effect with the passing of the arbitrary date on a calendar, there are signs that a deal to avoid the slide is near. Pert’ near every reporter in Washington says a deal is imminent. Just this Sunday, Obama and Boehner met in secret, well, not exactly a secret, and they did something, maybe they came up with a deal, maybe they barbequed some brats and watched some football, but their silence on the subject speaks volumes. Their silence almost provides proof positive that a bipartisan deal must be something that might have possibly been a part of the silent conversation, or not; but hey, it looks like a deal, except for all those pesky details. And it only took two years, possibly, of unnecessary uncertainty and sovereign debt downgrades to hammer out an agreement to …

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Wednesday, December 5, 2012 – I Have Copyrighted the Term “Fiscal Cliff”. Pay Up!

I Have Copyrighted the Term “Fiscal Cliff”. Pay Up! by Sinclair Noe DOW + 82 = 13,034SPX + 2 = 1409NAS – 22 = 297310 YR YLD – .02 = 1.59%OIL – .62 = 87.88GOLD – 2.50 = 1695.30 SILV unch = 33.01 Let’s take a look at the economic news. The ISM services index moved up to 54.7% in November from 54.2% in October; indicating expansion in the services side of the economy. Earlier this week, the ISM said its manufacturing index fell back into negative territory for the fourth time in six months. Third quarter productivity rose a revised 2.9%, the fastest rate in two years, compared to a first reading of 1.9%. Workers produced goods and services more efficiently than the first estimate suggested. This is an important number because it gives the Federal Reserve some wiggle room to continue to pump money into the Mortgage backed securities market, without the fear of inflation. It also means businesses are squeezing more output out of each worker, and so it reflects a reluctance to hire or raise wages. Payroll processor ADP says employers added 118,000 jobs last month. That’s below October’s total of 157,000, which was revised lower; mostly because Hurricane Sandy shut down factories, retail stores, and other companies. The ADP report might provide clues about the Labor Department’s monthly jobs report due on Friday. That report is expected to show the unemployment rate climbing to 8% from 7.9%. There is little sign yet that business concerns over potential …

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Tuesday, December 4, 2012 – The Clock is Ticking

The Clock is Ticking by Sinclair Noe DOW – 13 = 12,951SPX – 2 = 1407 NAS – 5 = 299610 YR YLD – .02 = 1.61%OIL – .71 = 88.38GOLD – 19.20 = 1697.80SILV – .75 = 33.01 So, President Obama presented an opening offer in the fiscal cliff talks; Speaker Bohener said it wasn’t serious and the financial and political reporters passed along the complaint that it was a recycled version of an old plan; before the election those same reporters spent the year passing along the complaint that Obama had no plan. Then Obama complained that the Republicans didn’t have a counter offer, and they finally came up with a counter but it didn’t have any specifics, but one area is that they want cuts to Medicare, even though before the election they were outraged that Obama was cutting Medicare. The current Republican position seems to be that the fiscal cliff’s instant austerity would destroy the economy, which is odd after four years of Republican clamoring for austerity, and that the cliff’s military spending cuts in particular would kill jobs, which is even odder after four years of Republican insistence that government spending can’t create jobs. And remember, this is all about the debt ceiling and tax cuts and spending cuts. And the political and financial reporters pass all this stuff on, with a countdown clock ticking in the lower right screen. It’s irresponsible reporting. Mainstream media outlets don’t want to look partisan, so they ignore the …

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Monday, December 3, 2012 – Still in the Woods and Other Economic News

Still in the Woods and Other Economic News by Sinclair Noe DOW – 59 = 12,965SPX – 6 = 1409NAS – 8 = 300210 YR YLD + .02 = 1.63%OIL +.01 = 88.92GOLD + .80 = 1717.00SILV + .22 = 33.76 Let’s start with the economic news. Business among manufacturers contracted in November and fell to the lowest level in more than three years. The Institute for Supply Management’s index of purchasing managers dropped to 49.5% from 51.7% in October. Any reading below 50 indicates contraction in the manufacturing sector. The decline in the overall ISM index largely reflected a steep drop in new orders but companies remained active fulfilling prior orders. Only six of the 18 U.S. manufacturing industries surveyed by ISM said they expanded somewhat faster in November. Nearly twice as many said their industries contracted. In the euro zone, manufacturers contracted for the 16th straight month, according to Markit. China’s manufacturing sector expanded slightly. In a separate report, the Commerce Department said spending on construction projects advanced 1.4% in October to the highest level since September 2009. The big economic news will come on Friday with the monthly jobs report. The best guess is that the economy added about 75,000 jobs in November, but that is just a guess; Hurricane Sandy has distorted some of the economic numbers. The fourth quarter of 2012 has clearly gotten off to a slow start. Consumer spending, by far the biggest source of economic growth, fell in October for the first …

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Wednesday, November 28, 2012 – If They Don’t Jump, I Might Push Them

If They Don’t Jump, I Might Push Them by Sinclair Noe DOW + 106 = 12,985SPX + 10 = 1409NAS + 23 = 299110 YR YLD – .03 = 1.62%OIL – .52 = 86.66GOLD – 22.00 = 1720.80SILV – .28 = 33.87 I am getting so sick and tired of this fiscal cliff malarkey* (* a politically acceptable euphemism, according to the debates), that I would like to throw some politicians off a fiscal cliff; maybe we could toss in a few media types as well. Today, I hear that stocks moved higher because John Boehner, the Speaker of the House, said he was optimistic about not going over the cliff. Really? That’s all it takes for stocks to post triple digit gains? Maybe tomorrow, Mr. Boehner can tell us he is both optimistic, and confident, and chipper, and slightly perky, and everything in his universe is copacetic; and the markets could celebrate with a monster rally. I don’t think this is the real motivation for market moves but it might be, but I don’t think so. On Friday, President Obama will hit the road to promote his version of fiscal cliff avoidance. Business executives and others who’ve met with President Barack Obama in recent days describe a president who’s supremely confident that he’ll come out on top of a fiscal cliff deal; with Republicans bending to his will on tax increases for the wealthy and Democrats sucking up deep spending cuts. You have to wonder about the austerity advice …

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