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Wednesday, July 11, 2012 – Toodaloo San Berdoo

Toodaloo San Berdoo-by Sinclair NoeDOW – 48 = 12,604SPX – .02 = 1341NAS – 14 = 288710YR YLD un = 1.50%OIL + .18 = 85.99GOLD + 10.10 = 1577.60SILV +.33 = 27.24PLAT + 6.00 = 1435.00The city council of San Bernardino, California, voted last night to file for bankruptcy, marking the third time in recent weeks a California city is seeking bankruptcy protection. The decision followed a report by city staff that said the city faced an imminent financial crisis. The report said the city had exhausted its reserves and projected that spending would exceed revenue by $45 million in the current fiscal year which started on July 1.The city attorney general James Penman said San Bernardino’s city officials had been submitting false accounting documents for 13 of the last 16 years in an effort to hide the real financial situation of the city. That period covers the tenure of multiple city managers and sets of elected officials, but it predates the  Acting City Manager.San Bernardino will join the California communities of Stockton and Mammoth Lakes in bankruptcy court. Stockton failed on June 28th, after three months of talks with its creditors to obtain concessions to close its $26 million budget gap. Mammoth Lakes, a ski resort town of about 8,000 residents, last week filed for bankruptcy due to a nearly $43 million legal judgment against it.San Bernardino has suffered from the housing crash and high unemployment. According to the report to its city council, the city “has reached a …

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Monday, June 25, 2012 – Spain and Cyprus Fall – US Banks Insure Bets – Goldman Behaves Badly – Congressional Insider Trading – by Sinclair Noe

DOW – 138 = 12,502SPX – 21 = 1313NAS – 56 = 283610 YR YLD -.06 = 1.61%OIL -.06 = 79.15GOLD + 13.00 = 1585.30SILV +.64 = 27.64PLAT + 9.00 = 1450.00So, the good news is that the Dow only dropped 138.It could have been worse; or better, depending on your perspective. Back in April we advised heeding the old advice to sell in May and stay away. May was a horrible month. The first couple of weeks in June, we bounced back just a little, then we continue the declines.This Euro-problem just never dies. There will be another emergency two day Euro-summit starting Thursday.  This appears to be the one area of relentless growth in Europe – the emergency summit business. I’m guessing that the caterers and event planners in Brussels are posting nifty profits. Expectations are low after Germany resisted pressure for common euro zone bonds or a flexible use of Europe’s rescue funds at a meeting of the region’s four biggest economies last week. Austerity measures pushed forward by Germany have tested the patience of the Greeks. The Greek government had to begin a search for a new finance minister after the nominee for the post said he could not serve because of health reasons. The situation in Greece sometimes seems it is never-ending. Cyprus announced it was seeking a bailout for its banks and its budget. Cyprus joins Greece, Ireland, Portugal and Spain in seeking EU rescue funds, meaning more than a quarter of the 17 euro …

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Monday, June 4, 2012 – Euro-crisis Moving Faster

DOW – 17 = 12,101SPX +0.14 = 1278NAS + 12 = 276010 YR YLD +.06 = 1.53%OIL +.15 = 84.13GOLD – 8.00 = 1619.30SILV – .42 = 28.36PLAT – 19.00 = 1434.00 Finance chiefs of the Group of Seven leading industrialized powers will hold emergency talks on the euro zone debt crisis tomorrow. The economic problems have spread and the G-7 teleconference is at least an admission that the euro is breaking down as a viable economic undertaking. We are finally moving past denial. There’s something rotten in Denmark; the Danish central bank cut interest rates twice last week; they say they’re battening down the hatches for a splintering of the European Monetary union. The European Commission said monetary union was in danger of “disintegration” and the European Central Bank said it was “unsustainable” as constructed. Felipe Gonzalez,the former Spanish prime minister says the Spanish economy is facing a “total emergency”, which is – just guessing here – a bit more problematic than a partial emergency. The Cypriot banking system is nine times the country’s GDP and they are now begging for a bailout. What a shocker. Cyprus is on the verge of becoming Iceland South. Switzerland is threatening capital controls to repel bank flight from Euroland. The Swiss two-year note has fallen to -0.32%; if you want to park money in the safe haven of Swiss bonds, you pay for the privilege. US 10-year note yield dropped down to 1.44%, lower than during the Great Depression. The United States …

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Tuesday, May 22, 2012 – Bank Scum – by Sinclair Noe

DOW – 1 = 12,502 SPX +0.64 = 1316NAS – 8 = 283910 YR YLD +.06 = 1.79%OIL – .92 = 91.65GOLD – 24.10 = 1569.30SILV – .27 = 28.30PLAT – 23.00 = 1451.00 Morgan Stanley, JPMorgan and Goldman Sachs are just pure scum. No wait, I shouldn’t say that; it’s much too kind; they are lying, stinking, thieving, dangerous scum. Maybe you heard about a little company called Facebook; it went public last Friday. Today, Reuters is reporting Morgan Stanley, JPMorgan and Goldman Sachs all cut their earning forecasts for Facebook in the middle of the IPO roadshow. You didn’t hear about that? No, you did not hear about that because the big banksters didn’t tell you. Why didn’t they tell you? Because they thought it would be much better to screw the public and try to make a quick buck on insider information, which they are required by law to report. Instead, the banksters passed the information only to a handful of big investor clients. This is a problem because earnings forecasts are material information, especially when they are prepared by analysts who have special access to company information and company management. Everybody who invested in Facebook would consider this material information when making an informed decision. The handful of big investors that did receive the information about reduced revenue forecasts were reportedly shocked. The change in Morgan Stanley’s estimates came on the heels of Facebook’s filing of an amended prospectus with the U.S. Securities and Exchange Commission (SEC), in …

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Wednesday, May 16, 2012 – An All Out Jog to the Finish – by Sinclair Noe

DOW – 33= 12,598SPX – 5 = 1324NAS – 19 = 287410 YR YLD -.01 = 1.76%OIL – 1.16 = 92.82GOLD – 4.00 = 1541.30SILV -.45 = 27.37PLAT + 3.00 = 1439.00 A Judge has been appointed to lead Greece until the next round of elections in June; leading Greece is a misnomer. The judge will be the caretaker prime minister, replacing another caretaker prime minister. Yesterday, we told you about the run on the banks. On Monday, Greeks pulled out about $900 million dollars, Euros actually. Makes sense. If you think your country will exit or be kicked out of the Euro-union, and be forced back to the drachma at about half the value, you might want to grab some Euros and hold on. Having the actually paper money in your hands prevents the banks from cutting the value in half; banks will do that sort of thing. Right now, it’s not really a bank run, more of a jog. Paul Krugman explained why it is a problem: “Where are the euros coming from? Basically, banks are borrowing them from the Greek central bank, which in turn must borrow them from the European Central Bank. The question then becomes how far the ECB is willing to go here; is it willing, in effect, to lend enough money to buy up the entire balance sheet of the Greek banking sector, given the likelihood that this sector will be left insolvent by Greek default? Yet if the ECB says no more, …

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Tuesday, April 17, 2012

DOW + 194 = 13,115 SPX +21 = 1390NAS + 54 = 3042 10 YR YLD +.04 = 2.01% OIL +.07 = 104.27GOLD – 2.90 = 1651.00SILV +.18 = 31.81PLAT + 8.00 = 1589.00 Tax Day, and you still have a few hours to get the forms filed. We talk a lot about taxes on MoneyRadio; how to legally minimize the tax bill, how to defer the tax bill. We talk about annuities, life insurance, harvesting losses, IRA’s, 401K’s, corporate entities and more. And that’s all good, but if you really want to cut your tax bill, there is a sure fire way to do it. If you are looking to stick it to the IRS, I’ll tell you the secret. You don’t need accountants, you don’t need financial planners, you don’t need tax software, you don’t even need a mailbox in the Grand Caymans. You need a lobbyist. The top eight companies that spent the most on federal lobbying from 2007 to 2009 all saw their reported tax rates decrease from 2007 to 2010; these top eight firms spent $540 million on lobbying from 2007 to 2009. They filed 332 lobbying reports that mentioned taxes and named 491 different tax bills in those reports. The top eight companies that spent the most on lobbying were Exxon Mobil, Verizon Communications, General Electric, AT&T, Altria, Amgen, Northrop Grumman and Boeing. Exxon Mobil spent the most, some $81.92 million from 2007 to 2009. AT&T recorded the largest tax reduction, with its tax …

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Thursday, April 12, 2012

DOW + 181 = 12,986 SPX + 18 = 1387NAS + 39 = 3055 10 YR YLD +.02 = 2.05%OIL +.08 = 103.72GOLD + 15.60 = 1676.30SILV + .77 = 32.48PLAT + 20.00 = 1611.00 The Federal Reserve Propaganda Tour continued last night with performances by Janet Yellen and William Dudley, the head of the New York Fed. Dudley said, “we cannot lose sight of the fact that the economy still faces significant headwinds and that there are some meaningful downside risks… the incoming data on the U.S. economy has been a bit more upbeat of late, suggesting that the recovery may be getting better established. But, while these developments are certainly encouraging, it is far too soon to conclude that we are out of the woods in terms of generating a strong, sustainable recovery. On the inflation front, the year-over-year rate of consumer price inflation has slowed in recent months, and despite the recent rise of gasoline prices, we expect inflation to moderate further in 2012.” To translate, the Fed isn’t worried about inflation and they have given themselves a green light for QE3 and they’ll juice the economy with piles of free money when they feel like it. Of course, that’s not the final word on the matter; St. Louis Fed President James Bullard says he sees the unemployment rate at 7.8% by the end of the year, noted that March’s monthly employment report was just one “mediocre” report and not an immediate concern that would push the …

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April, Monday 2, 2012

DOW + 52 = 13,264 SPX + 10 = 1419NAS +28 = 311910 YR YLD -.02 = 2.19%OIL – .40 = 104.83GOLD + 8.30 = 1678.00SILV +.71 = 33.09PLAT + 12.00 = 1657.00 The calm before the storm. Maybe I should say storms. This Friday we’ll look at the monthly jobs report for March. The nonfarm payroll is one of the bigger economic reports each month and frequently moves markets. The report this Friday will be strange. I guarantee. This Friday marks the somewhat unusual occurrence of a payrolls report being released on a holiday (Good Friday) that will keep stock markets shut. On Friday, stock futures will be trading for at least 45 minutes after the release, and government bonds will trade until noon. All Canadian and most European markets will be shut. It is widely expected the economy added 200,000 jobs in March; down from an average of 245,000 for the three prior months. The unemployment rate will probably stay at 8.3%. The addition of 200,000 jobs is not enough to lift the economy; it is just treading water, at best. So, the economy is looking pretty good, not great but good. A warm winter may have exaggerated first quarter growth. Consumer confidence is up but spending is outpacing wage gains. It makes for a pretty straightforward scenario for growth. The consumer can rely on high debt and/or growing asset prices to fuel their consumption but if debt gets too high and/or asset prices slip, then the consumer …

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March, Monday 19, 2012

DOW + 6 = 13,239SPX + 5 = 1409NAS + 23 = 307810 YR YLD +.08  = 2.38% OIL  – .31 = 107.78GOLD + 3.40 = 1664.50SILV + .36 = 33.02PLAT + 10.00 = 1685.00 The S&P 500 Index is now at its highest level since May 2008 and 10 percent below the record close of 1,565.15 set in October 2007. Apple rose 15.53 to $601.10 per share, pushing the market cap to $560 billion. It is the first time Apple has closed above $600. The market capitalization makes Apple the most valuable publicly traded company in the world. This is a parabolic rise; Apple is up almost 50% for the quarter. Today’s move followed an announcement they would pay a dividend of $2.65 per quarter starting in July, and also a $10 billion stock buyback program, and also that sales of the iPad 3 topped 3 million over the weekend.  It all sounds a little frothy. I mean, what are they going to do next Monday? Treasuries continued to drop. Thirty-year-bond yield added 7 basis points to 3.48%, a level it hasn’t close above since September. Yields on 10-year notes rose for a fifth day, by 8 basis points to 2.38%, from as low as 2.26% touched during European trading hours. Yields haven’t closed above that level since Oct. 27. Yield moves inversely to prices. In a speech, William Dudley, president of the New York Federal Reserve Bank said “the economy still faces significant headwinds” and inflation is expected …

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March, Thursday 15, 2012

DOW + 58 = 13252SPX + 8 = 1402NAS  + 15 = 305610 YR YLD + .01 = 2.28%OIL +.35 = 105.46GOLD + 13.50 = 1658.30 SILV + >39 = 32.64PLAT + 11.00 = 1688.00           Yesterday we talked about the op-ed article in the New York Times written by Greg Smith, an executive from Goldman Sachs who was quitting the firm. He blasted Goldman in the article, saying the firm had changed, and not for the better. Smith chided his employer of nearly 12 years for its “toxic” environment and practice of “ripping clients off” while calling them “muppets.”           One of the stupidest responses came from the editorial board at bloomberg.com. No specific names here, just the “editorial board”.  They replied with an article titled: “Yes, Mr. Smith, Goldman Sachs is all about Making Money”. They say: “If you want to dedicate your life to serving humanity, do not go to work for Goldman Sachs. That’s not its function, and it never will be. Go to work for Goldman Sachs if you wish to work hard and get paid more than you deserve even so.”           And here I thought Goldman Sachs was doing God’s work. That’s what Lloyd Blankfein said; I guess  he was lying? Yep. The Bloomberg editorial board just described a mercenary’s job description. Nobody seriously expects Goldman investment bankers to serve humanity, but it doesn’t mean they should work to destroy it. Bloomberg and Goldman both work in the financial industry. In fact, Goldman …

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