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Friday, October 12, 2012 – Peace Out

Peace Out by Sinclair Noe DOW + 2 = 13,328SPX – 4 = 1428NAS – 5 = 304410 YR YLD -.01 = 1.66%OIL – .43 = 91.64GOLD – 12.90 = 1755.30SILV – .52 = 33.58PLAT – 23.00 = 1660.00 Two down, two to go; debates that is. So far, it has been great entertainment; and we all get to play critic; too polite, too disrespectful, too vague, too mendacious, big flag pin, little flag pin, too much style and not enough substance. In addition to a dearth of veracity, there were other glaring omissions, such as details, specifics, and of course, the Federal Reserve. Pay no attention to the man behind the curtain. Maybe the marching orders came from Jamie Dimon, speaking before the CFR the other day, Dimon discounted all this QE stuff. Dimon says QE1, 2, and 3 added together are only about $3 trillion dollars,… so far. Now that might sound like a significant sum to a bumpkin like me, but Dimon puts it in perspective; it is just a small part of the total financial assets of America, $80 trillion dollars. I didn’t see much in the itemized columns about that $80 trillion but it seems that much of it is securitized debt, backstopped by the Federal Reserve, and without the Fed “Put”, that $80 trillion in financial assets might just be so much paper; in other words, it remains susceptible to massive deleveraging. Profit for JPMorgan rose 34% to $5.71 billion, or $1.40 a share, …

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Friday, June 29, 2012 – It’s Almost Like Free Money, Woohoo!

It’s Almost Like Free Money, Woohoo! – by Sinclair NoeDOW + 277 = 12,880SPX + 33 = 1362NAS + 85 = 293510 YR YLD + .08 = 1.66%OIL + 7.18 = 84.87GOLD + 47.10 = 1600.10SILV + 1.17 = 27.59PLAT + 58.00 = 1454.00All right gang – what do the markets love? Free money. When central banks give free money to the banks (and let’s be clear, they only give free money to banks not to regular people) the bank traders grab the loot and scamper off to the casino or to the trading desk (same difference), and it’s risk on.  Next thing you know the Dow is up 277. Woohoo, this economics stuff is easy. Sometimes, just the promise of free money is enough.The past couple of days the big wigs in Euro-land held an emergency summit in Brussels. This was their 20th emergency summit, so expectations were diminished. And just when it looked like an unproductive weekend full of waffles and chocolates; they announced a blockbuster deal (think John Carter, not Avatar). They have a plan for long term fiscal union, and a plan to save Spain and Italy from contagion. They’ll use the ESM, the European Slush Mechanism to directly inject capital straight into the banks, just like junkies on the mainline. And this bailout money would not be senior to existing debt. You may remember that caused  a problem for the Greek bailout, when the ECB forced Greek bondholders to take big haircuts but the ECB debt was not discounted at …

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Wednesday, June 20, 2012 – A Twisted World – by Sinclair Noe

DOW  – 12 = 12,824SPX – 2= 1355NAS +0.69 = 293010 YR YLD +.02 = 1.64%OIL – 3.25 = 81.10GOLD – 11.10 = 1607.80SILV – .30 = 28.22PLAT – 23.00 = 1464.00Quite frankly the Federal Reserve FOMC meetings have become a bit too predictable. They didn’t lower interest rates because rates are already at zero. They didn’t raise interest rates because that would be a total freak out and the financial markets would collapse. The Fed does not have an exit plan from their zero interest rate policy. They didn’t announce QE3 because that would be a blatant destruction of the currency which would send the price of gold soaring; also because they are holding back and waiting just in case Europe hits the self destruct button. The Fed expanded Operation Twist by $267 billion, meaning it will sell short-term securities and buy long-term ones in an effort to keep borrowing costs down. The program, which was due to expire this month, will now run through the end of the year. Operation Twist is a wash; it really doesn’t cost anything; they buy, they sell, it all equals out. The next question is whether Operation Twist actually does anything. Here the results are inconclusive. Long term rates are at historic lows but we don’t know if rates would have been low even without Operation Twist. Perhaps the most pathetic part of the FOMC statement was this: “Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The …

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Monday, June 18, 2012 – G-20 Declares Ceviche Tasty and Democracy Messy – by Sinclair Noe

DOW – 25 = 12,741SPX +1 = 1344NAS + 22 = 289510 YR YLD un=1.58%OIL -.26 = 83.01GOLD + 2.00 = 1629.70SILV un= 28.84PLAT – 1.00 = 1489.00The results of the Greek election shows conservative New Democracy taking 29 percent, with the radical leftist Syriza bloc just behind on 27. The Pasok Socialists were set to take 12 percent of the vote. The scenario is similar to the results of an earlier round of voting. ND also came in first in May 6 elections, again with Syriza running a close second, but failed to form a government then. And 38% of eligible voters did not vote yesterday; that’s more votes than any one party received. The headlines say that a pro-bailout, pro-remain in the Euro-union party won the Greek elections; it’s not that simple. There was no majority. The next step is for New Democracy leader Antonis Samaras to form a coalition government; not an easy or certain task, and it must be done within the next 10 days. Look for a combo of the New Democracy conservatives and  the Pasok socialists; the same group that governed Greece into this mess in the first place. Pasok, the Socialist party, called for a government that would include Syriza, the far left party, but  Syriza ruled out joining a coalition that would stick to the punishing bailout terms that have helped condemn Greece to five years of record recession. Alexix Tsipras, the leader of Syriza, had vowed to tear up the terms, betting that …

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Thursday, June 14, 2012 – Just In Case There is a Glitch in the Vote – by Sinclair Noe

DOW + 155 = 112,651SPX + 14 = 1329NAS + 17 = 283610 YR YLD +.01 = 1.61 OIL +.44 = 84.35GOLD + 5.70 = 1624.30SILV – .22 = 28.74PLAT + 27.00 = 1498.00All righty class, it is time for a pop quiz. Please answer the following question: What is the Ironclad Rule of Wall Street?Put down you pencils.And the answer is: Wall Street loves free money.And where does free money come from? And the answer is: Central banks. If you answered the Federal Reserve and Helicopter Ben, give yourself a partial credit; if you answered taxpayers, give yourself partial credit; while those answers are technically correct it is outdated and more than a tad provincial. Think bigger, think globally.Today, Greek bank stocks surged more than 20 percent, with speculators betting on a favorable pro-bailout outcome after Sunday’s election. The action there drew the attention of traders on Wall Street. Officials from the G-20 confirmed today that the central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading even if the Greek election will not provide “the definitive signal on what happens next” in the euro-zone economic crisis.The Greek election is Sunday and then there is a G20 summit of world leaders in Los Cabos, Mexico, on Monday and Tuesday, with Europe’s escalating crisis topping the agenda. Leaders will be accompanied by finance ministers playing an advisory role. Depending on …

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Wednesday, June 13, 2012 – To Hedge or Not to Hedge – by Sinclair Noe

DOW – 77= 12,496SPX – 9 = 1314NAS – 24 = 281810 YR YLD -.06 = 1.60%OIL – .86 = 84.03GOLD + 7.80 = 1618.60SILV -.11 = 28.96PLAT + 11.00 = 1471.00If I went before the Senate Banking Committee and told lies, you can bet they would throw me into the gray bar hotel and toss the key. Today, Jamie Dimon, the CEO of JPMorgan Chase went before the Senate Banking Committee and as he took his seat in the Senate hearing room a protestor yelled, “This man is a crook and he needs to go to jail.” And then Jamie Dimon started talking and proved the protestor’s point. During questioning, Dimon was asked if the Volcker rule would have prevented the trades that led to $2 billion in losses (give or take a few billion) at JPMorgan? Dimon answered: “I don’t know what the Volcker Rule is, it hasn’t been written yet.” The proposed rule, mandated by the Dodd-Frank legislation, was published in November in the Federal Register and opened for public comment. Financial regulators are now in the process of finalizing it. Jamie Dimon is a board member of the New York Federal Reserve and as such is charged with regulating banking activity in accord with legislation such as the Dodd-Frank reforms and the Volker Rule; as CEO of JPMorgan, Dimon must certainly be familiar with the Volker Rule which would dramatically alter the rules of trading for a major part of his company. Of course the other option is …

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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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Monday, May 21, 2012 – Markets Bounce, Greece Doesn’t, JPMorgan Stonewalls – by Sinclair Noe

DOW + 135 = 12,504SPX + 20 = 1315NAS + 68 = 284710 YR YLD +.03 = 1.74% OIL + .12 = 92.69GOLD +.30 = 1593.40SILV -.25 = 28.57PLAT + 13.00 = 1474.00 Remember last summer, when the living was easy and the Dow Industrials dropped like bricks from 12,724 down to 10,719? Two-thousand points in just a few weeks? Remember in October, the Dow had recovered from the Dog Days of Summer and climbed all the way back to 12, 078, only to fall more than 800 points in just a couple of weeks? The past three weeks have been kind of like that. Of course, there will be bounces. Today we bounced. Why did we bounce today? Make up any reason you wish. Europe didn’t collapse, Greeks shifted to a pro-bailout party, the Facebook frenzy is finished, Jamie Dimon hypnotized investors to forget about losses at JPMorgan, the G8 is feeling optimistic, China isn’t planning to crush the US economy – at least not this week; the sun was eclipsed by the moon but it was only temporary. Pick a reason or create your own. Stocks bounce. One day does not make a trend. Over the weekend the G8 met at Camp David. It might have made better sense to hold the meeting in Chicago, where NATO was holding a meeting, a rare United States based NATO summit, but there would have been too many protesters. So the G8 met in the wooded seclusion of Maryland and they …

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Thursday, May 17, 2012 – Banks Start to Run – by Sinclair Noe

DOW – 156 = 12,442SPX – 19 = 1304NAS – 60 = 281310 YR YLD -.06 = 1.70%OIL +.17 = 92.73GOLD + 34.00 = 1575.30SILV +.78 = 28.15PLAT + 19.00 = 1459.00 The Dow Industrials have now dropped for 11 out of the past 12 trading sessions, giving back all the gains going back to the start of the year. Greece’s caretaker Cabinet was sworn in this morning and they’ll hold power at least until next month’s election.  The European Central Bank has stopped providing funds to Greek banks. People have been pulling euros out of the Greek banks, concerned about a possible exit from the Euro-zone common currency and a return to the Drachma, which would be an effective devaluation. So Greek citizens take their money out the front door of the bank and the ECB refuses to replenish supplies, and something has to give. There will be an election in about one month. There will be attempts to find a resolution. German Chancellor Merkel is even considering lifting the jackboot of austerity from the necks of the Greeks. It is one thing to demand fealty, it is another to consider the very real possibility of a Greek exit from the Euro-union. Germans are starting to realize that a Greek exit from the Euro-union will be very expensive. Everybody is now doing a study to determine how much a Greek exit might cost; the numbers seem to run in the trillions. So, why not find a cheaper solution? Which …

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Thursday, May 10, 2012 – JP Morgan Chase Goes Boom

DOW +19 = 12,855SPX + 3 = 1357 NAS – 1 = 2933 10 YR YLD + .05 = 1.88%OIL – .26 = 96.55GOLD + 4.00 = 1594.40SILV -.23 = 29.14PLAT – 13.00 = 1492.00 So, it was a quiet day in the markets, not much going on; the Dow and the S&P managed to eke out modest gains, and this was welcome following 6 days of losses. Back in early April I told you to start getting out of the market, based in part, on the the idea of “Sell in May and stay away”. Sure, enough, May has been ugly, but not every day is ugly. There will be ups and downs. The past six days have been down; today the markets stopped banging their head against a wall, but the headache hasn’t gone away. All in all, an uneventful trading day. And then after the closing bell – boom! JP Morgan Chase lost about $2 billion on mark-to-market accounting tied to synthetic credit securities after positions taken by its chief investment office were riskier than expected. JPMorgan’s chief investment office, or CIO has been transformed in recent years under Chief Executive Officer Jamie Dimon, into a unit that makes bigger and riskier speculative bets with the bank’s money, five former employees of the bank said earlier this year. Some of the bets were so big that the bank probably couldn’t unwind them without losing money or roiling financial markets. Losses in CIO’s synthetic credit portfolio have been …

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