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Tuesday, January 28, 2014 – If I Had a Hammer

If I Had a Hammer by Sinclair Noe DOW + 90 = 15,928SPX + 10 = 1792NAS + 14 = 409710 YR YLD – .02 = 2.75%OIL + 1.50 = 97.22GOLD – .80 = 1256.70SILV – .13 = 19.66 The State of the Union is… tonight. President Obama will describe how he will use his pen and phone to overcome the Do-Nothing Congress, and the Republicans have ironically lined up not one, but three responses to refute the idea they are nothing more than obstreperous obstructionists. Everybody from the Pope to the big wigs in Davos have been talking about inequality and it will likely be a major theme in tonight’s speech. Job and wage growth has been broken since the 1990s. Median family incomes grew very slowly from 1979 to 1999, peaked that year, and have fallen 13% since. The economy has recovered since the near financial meltdown of 2008, but it has been the weakest recovery since the Great Depression, and one of the reasons it has been such a slow recovery is that the spoils of recovery have been unevenly distributed. Even though we have seen job growth in the past 54 months, 6 of the 10 fastest growing job categories are in low paying service sector positions, such as retail clerk and home health care aids. Middle class income is sinking; the ranks of the poor are rising; and the economic gains only go to the top, or 95% of all economic gains in the “recovery” …

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Tuesday, January 21, 2014 – Real Risks

Real Risks by Sinclair Noe DOW – 44= 16,414SPX + 5 = 1843NAS + 28 = 422510 YR YLD unch = 2.82%OIL + .67 = 95.26GOLD – 13.00 = 1242.70SILV – .41 = 20.01 Wall Street’s attention this week will mainly focus on earnings reports given the dearth of economic data. There are only a few important economic reports this week, all of which will be released on Thursday. Thursday’s reports include the November FHFA housing price index (expected +0.3% m/m), December existing home sales (expected +1.0%), and December leading indicators (expected +0.2%). The Treasury on Thursday will sell $15 billion of 10-year TIPS. The markets will be looking to next week’s FOMC meeting where the consensus is that the FOMC will taper QE3 by another $10 billion to $65 billion per month. Global stocks found support as Chinese money-market rates dropped after the People’s Bank of China added funds and expanded access to a lending facility after the 7-day repurchase rate had surged 153 basis points to a 1-month high of 6.32% on Monday. In an attempt to alleviate a liquidity squeeze, the PBOC added more than 255 billion yuan ($42 billion) into the financial system and will allow small and medium-sized Chinese banks to access its Standing Lending Facility for loans of up to 2-weeks on a trial basis before China’s Lunar New Year holiday begins on Jan 31; this was in addition to a liquidity injection made just yesterday for an unspecified amount. The yield on Portugal’s …

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Wednesday, November 27, 2013 – Evangelii Gaudium and Happy Thanksgiving

Evangelii Gaudium and Happy Thanksgiving by Sinclair Noe DOW + 24 = 16,097SPX + 4 = 1807NAS + 27 = 404410 YR YLD + .03 = 2.74%OIL – 1.40 = 92.28GOLD – 4.40 = 1238.60SILV – .11 = 19.80 This has been a quiet week on Wall Street; the two major features have been record highs for the DOW and the S&P and 13 year highs for the Nasdaq, combined with light volume. Now normally, light volume on record highs would be an indication the market has run out of steam and is ready to roll over. But this is a holiday shortened week; the markets are closed tomorrow for Thanksgiving, and then just very, very quiet day on Friday. So, it’s difficult to read much into the price and volume other than to say, there is a pause for the holiday. Happy Thanksgiving. Plenty to be thankful for; the S&P 500 has climbed 2.8 percent in November, poised for the third straight monthly gain. The S&P 500 is up 27% this year; the Nasdaq is up 33% year to date. Economic data today shows fewer workers filed applications for unemployment benefits last week; that’s a good report for the labor market. The Thomson Reuters/University of Michigan final index of consumer sentiment in November unexpectedly rose to 75.1 from 73.2 a month earlier, and came in higher than expected. The Conference Board’s index of leading indicators, a gauge of the economic outlook for the next three to six months, rose …

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Tuesday, October 2, 2013 – Jobs, Jobs, Jobs

Jobs, Jobs, Jobs by Sinclair Noe DOW + 75 = 15,467SPX + 10 = 1754NAS + 9 = 392910 YR YLD – .10 = 2.51%OIL – 1.57 = 98.11GOLD + 24.60 – 1342.20SILV + .47 = 22.81 The Labor Department reported the economy added 148,000 net new jobs in September. The change in total nonfarm payroll employment for July was revised from +104,000 to +89,000, and the change for August was revised from +169,000 to +193,000. With these revisions, employment gains in July and August combined were 9,000 more than previously reported. The unemployment rate declined in September to 7.2% from 7.3% in August. This is the lowest level for the unemployment rate since November 2008. The Labor Force Participation Rate was unchanged in September at 63.2%. This is the percentage of the working age population in the labor force. The participation rate looks at the people who are actually in the labor pool. As the Boomer generation retires, willingly or not, they get out of the labor pool, and this is why we’ve seen the unemployment rate decline, even though the economy isn’t really doing a great job of adding jobs. There are 4.146 million workers who have been unemployed for more than 26 weeks and still want a job. This was down from 4.290 million in August. This is generally trending down, but is still very high.  Long term unemployment remains one of the key labor problems in the US. Is the Affordable Care Act causing a surge in part-time employment? Apparently not. …

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Monday, September 16, 2013 – Do It Again

Do it Again by Sinclair Noe DOW + 118 = 15,494SPX + 9 = 1697NAS – 4 = 371710 YR YLD – .02 = 2.86%OIL – .53 = 106.06GOLD – 14.00 = 1314,90SILV – .45 = 21.92 The Bank of International Settlements is a Swiss based central bank for the central banks, kind of a global clearing house. The BIS has just issued its quarterly economic review. The conclusion: it’s 2007 all over again, but even worse. All the previous imbalances are still there, but total public and private debt has grown to more than 30% of GDP in advanced economies, and bubbles are forming in emerging markets. Subordinated debt has in Europe and the US has ballooned. Leveraged loans are at an all time high. The BIS said interbank credit to emerging markets has reached the highest level on record while the value of bonds issued in off-shore centers by private companies from developing nations exceeds total issuance by firms from rich economies for the first time. So, there is more debt than ever, and a greater appetite for risk. And if the Fed raises interest rates this week there will almost certainly be a spill-over effect; global borrowing costs will rise. The international financial system is more unbalanced than 5 years ago, and there is a concern that markets can remain liquid under stress. If there is a problem with liquidity, the BIS figures there are fewer lifelines than before. The global markets, including the US, have become …

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Friday, September 06, 2013 – Fed Policy Creates Inequality

Fed Policy Creates Inequality by Sinclair Noe DOW – 14 = 14,922SPX + .09 = 1655NAS + 1 = 366010 YR YLD – .04 = 2.93%OIL+ 1.86 = 110.23GOLD + 21.10 = 1389.80SILV + .63 = 23.94 The war hasn’t started …, yet. This morning we got the big monthly jobs report. Nonfarm payrolls increased by 169,000 jobs last month falling short of the 175,000 to 180,000 Wall Street had expected. Not only did hiring miss expectations last month, but the job count for June and July was revised to show 74,000 fewer positions added than previously reported. While the unemployment rate fell a tenth of a percentage point to 7.3 percent, its lowest level since December 2008, the decline reflected a drop in the share of working-age Americans who either have a job or are looking for one. That participation measure reached its lowest point since August 1978, a further sign of underlying economic weakness. The rate for men touched a record low. U-6, a measure of underemployment that includes people who want a job but who have given up searching and those working part time because they cannot find full-time jobs fell three tenths of a percentage point to a 4-1/2-year low of 13.7 percent. The private sector accounted for the bulk of the job gains last month, but government payrolls increased 17,000 as local governments hired teachers for the new school year. Factory employment rebounded after falling in July. Construction payrolls were flat as both residential and …

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Monday, July 22, 2013 – One Can At a Time

One Can At a Time by Sinclair Noe DOW + 1 = 15,545SPX + 3 = 1695NAS + 12 = 360010 YR YLD un = 2.48%OIL – 1.05 = 107.00GOLD + 38.50 = 1336.20SILV + 1.01 = 20.64 Sometimes great wealth is built slowly, just a little at a time. If you can make a small, consistent, repeatable profit – it adds up over time. For example, Americans consume 90 billion aluminum cans each year. If you could get a small profit from each can sold, say one-tenth of one cent on each can, why you could rack up about $5 billion in profits per year. What would you have to do? Well, some companies mine the aluminum, some companies fabricate the actual cans, some companies transport the cans; and then there’s Goldman Sachs, which hoards the aluminum, keeping it off the market to influence the available supply. You didn’t know that Goldman Sachs was in the aluminum can business? Well, they aren’t. They are in the aluminum warehousing business. Three years ago, Goldman bought Metro International, a warehousing firm in Detroit. Before Goldman bought Metro, aluminum customers would order aluminum and it would be retrieved and shipped to its destination within about six weeks. Now, Goldman makes that same delivery in about 16 months. The delays push up the price. Longer waits might be written off as an aggravation, but they also make aluminum more expensive nearly everywhere in the country because of the arcane formula used to determine …

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Tuesday, June 18, 2013 – The Fed, and the Brazilian Protests

The Fed, and the Brazilian Protests by Sinclair Noe DOW + 138 = 15,318SPX + 12 = 1651NAS + 30 = 348210 YR YLD + .01 = 2.18%OIL + .63 = 98.02GOLD – 16.40 = 1369.30SILV – .16 = 21.78 The past couple of years, the financial markets have been very dependent on the Federal Reserve, perhaps overly dependent. Much of the fundamental analysis of companies and the economy has taken a backseat to the Fed’s unprecedented monetary policy of Quantitative Easing. The outlook for the financial markets for the remainder of the year boils down to potential changes in policy. The Federal Open Market Committee has begun its regularly scheduled policy meeting and tomorrow they will issue a policy statement followed by a press conference by Fed Chairman Bernanke. So, this time tomorrow we’ll know more but given the importance of monetary policy, it’s worthwhile to consider possibilities and possible market response. There are four possible scenarios to consider: The first scenario has the Fed announcing preparations for tapering off QE; they won’t actually stop QE tomorrow, they’ll just announce their intention to exit QE policy at some identifiable point down the road; and of course, it would be conditional on economic developments between now and the determined exit date; it would most like involve scaling back securities purchases without any specific targets for changing interest rates. This seems to be the most probable scenario right now. Since the Fed announced QE3 last September, the Bank of Japan has …

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Wednesday, April 24, 2013 – God Bless the Child

God Bless the Child by Sinclair Noe DOW – 43 – 14,676SPX +.01 = 1578NAS +0.32 = 326910 YR YLD un = 1.70%OIL + 2.43 = 91.61GOLD + 17.90 = 1432.50SILV + .22 = 23.26 Them that’s got shall get; them that’s not shall lose; so the Bible said, and it still is news. The Pew Research Center has analyzed the most recent date from the Census Bureau, and it turns out the rich got richer and the poor got poorer. During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. From the end of the recession in 2009 through 2011 (the last year for which Census Bureau wealth data are available), the 8 million households in the US with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $0.6 trillion. Because of these differences, wealth inequality increased during the first two years of the recovery. The upper 7% of households saw their aggregate share of the nation’s overall household wealth pie rise to 63% in 2011, up from 56% in 2009. On an individual household basis, the mean wealth of households in this more affluent group was almost …

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Wednesday, April 03, 2013 – Traps Set

Mark your Calendar, April 5 & 6 and make your reservations for the 2013 Wealth Protection Conference in Tempe, AZ. For conference information visit www.buysilvernow.comor click hereor call 480-820-5877. This year’s conference features Roger Weigand, Nathan Liles, David Smith, Mark Liebovit, Arch Crawford, Ian McAvity, Bill Tatro, and I will speak on Friday. There is an expanded Q&A session with all speakers on Saturday. I hope you can attend. Traps Set by Sinclair Noe DOW – 111 = 14,550SPX – 16 = 1553NAS – 36 = 321810 YR YLD – .05 = 1.81%OIL – 2.72 = 94.47GOLD – 18.30 = 1558.90SILV – .28 = 27.08 We have a day like today and we are reminded of the fleeting nature of a bull run. The Russell 2000 cracked this week. It tried to get up yesterday, but small-caps couldn’t hold their ground. Transports followed with a thud. Both the transports and the Russell registered slightly lower highs to kick off the second quarter. Commodities have moved lower as of late; gold, silver, platinum, copper all sneaking back to support. Physical demand for the metals remains very strong and there appears to be a disconnect between the paper market and the physical market. It feels like someone is trying to set a trap for a greater fool. I don’t know whether this is a technical move, or if there is a fundamental reason. The news doesn’t always help. The big news story of the day is that the Rutgers basketball coach yelled …

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