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Wednesday, October 09, 2013 – Scum in the Steam Room

Scum in the Steam Room by Sinclair Noe DOW + 26 = 14,802SPX + 0.95 = 1656NAS – 17 = 367710 YR YLD + .01 = 2.65%OIL – 2.03 = 101.46GOLD – 11.90 = 1308.00SILV – .40 = 21.99 We’ll get to Janet Yellen in a bit. First, I’m getting sick and tired of this stupidity oozing out of Washington; you are too, I know. Americans’ confidence in the economy has deteriorated more in the past week during the partial government shutdown than in any week since Lehman Brothers collapsed on Sept. 15, 2008, which triggered a global economic crisis. Gallup’s Economic Confidence Index tumbled 12 points to -34 last week, the second-largest weekly decline since Gallup began tracking economic confidence daily in January 2008. And that poll was taken at the end of last week. Since then, we’ve hit a new low. The government is still shut down. I don’t know why. John McCain delivered a speech on the Senate floor; he said: “To think that we were going to repeal Obamacare, which would have required 67 Republican votes, of course, was a false premise.” So, I really don’t know why we are still having a shutdown. He then went on to recognize the five families of US soldiers killed last weekend in Afghanistan; 21 soldiers have died since the shutdown started. When a soldier is killed in battle, the family receives about $100,000 in death benefits. A month ago, the Pentagon warned the politicians on Capitol Hill that …

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Tuesday, September 17, 2013 – Everything is on Hold at a Bad Level

Everything is on Hold at a Bad Level by Sinclair Noe DOW + 34 = 15,529SPX + 7 = 1704NAS + 27 = 374510 YR YLD – .02 = 2.84%OIL + .22 = 105.64GOLD – 3.90 = 1311.00 SILV- .08 = 21.84 Market players are focusing on the Fed right now. Yesterday, Larry Summers withdrew his name from consideration to be the next Fed Chairman; maybe it doesn’t matter who the next Fed chair is, they are likely to continue on the same path. Today, Jim Rogers said the role of Fed Chair is nothing more than a lapdog for the establishment. Harsh, but not necessarily inaccurate. Still, the Fed Chair is a powerful role and it looks like a woman almost nobody knows will soon take over. Give yourself 3 points if you know her name and her current job title. (Janet Yellen, Fed Vice Chair) The Federal Open Market Committee, the FOMC, was meeting today; they’ll continue meeting tomorrow to determine monetary policy. It’s widely expected the FOMC will announce taper, in part because of logistics. The FOMC meets tomorrow, another meeting in October, another meeting in December, and then Bernanke retires. Market participants are expecting taper, and the Fed usually avoids surprises. September and December are the two most likely times for an announcement, in part because the October FOMC meeting does not include a scheduled press conference to explain any significant changes; also October will be right in line with budget battles If there is a …

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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, August 09, 2013 – May All Your Wishes Come True

May All Your Wishes Come True by Sinclair Noe DOW – 72 = 15,425SPX – 6 = 1691NAS – 9 = 3660 10 YR YLD – .01 = 2.57%OIL + 2.57 = 105.97GOLD + 2.30 = 1315.70SILV + .31 = 20.66 As we started the week, I warned that August can be fairly volatile in the stock market; it seems like the lazy days of summer and volume is usually lackluster, as it was today, but sometimes that just intensifies price swings. The markets were down again today, the fourth decline in the week, and the first weekly decline on the heels of six weeks of gains. The Dow was down 1.5% for the week. The S&P pushed back to 1700 a few times but couldn’t break through. This week’s declines don’t seem to tell us much; we could go either way next week. Yes, I know the rally is long in the tooth; going back to March 2009, the rally is 4.4 years old, longer than the average rally, but it really is too early to start catching falling knives. There wasn’t much in the way of economic reports this week; earnings reporting season is winding down, Congress is away on Summer recess. I guess it’s been about a week since we saw the guesstimates on second quarter GDP, and you’ll recall that the guesstimates included revisions that go back 83 years. The government is recalculating the numbers to try to get a more accurate picture. One of the …

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Friday, August 02, 2013 – Jobs and Side Bets

Jobs and Side Bets by Sinclair Noe DOW + 30 = 15,684SPX + 2 = 1709NAS + 13 = 368910 YR YLD – .11 = 2.60%OIL – .95 = 106.94GOLD + 4.60 = 1314.50SILV + .26 = 19.99 The stock market started lower, with tepid news on the jobs front, but managed to claw back into positive territory, confirming the perverse Wall Street logic that bad is good. The weakness in the jobs market was seen as proof positive the Fed will continue with QE to infinity and beyond, and talk of taper can be set aside for the next Fed Chairman, whoever he or she may be. The economy added 162,000 jobs last month; that was less than the estimates of 185,000 and less than the recent averages of about 192,000. Also, May and June payroll gains were revised down by 26,000. The unemployment rate dropped to 7.4% down from 7.6%. This is the lowest level for the unemployment rate since November 2008. Most of the decline in unemployment was due to more people getting jobs but part of it was due to a slight fall off in the labor force, a signal of not-too-strong labor demand, as 37,000 workers dropped out of the labor market. In July, the number of unemployed fell by 263,000 but the number of employed increased by only 227,000.  The participation rate ticked down one-tenth, to 63.4%, lower than it was a year ago at 63.7 %. The participation rate is at its lowest …

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Tuesday, February 12, 2013 – The Battles to Come

The Battles to Come by Sinclair Noe DOW + 47 = 14,018SPX + 2 = 1519NAS- 5 = 318610 YR YLD + .01 = 1.97%OIL + .48 = 97.51GOLD + 3.00 = 1652.30SILV + .17 = 31.22 The all-time high in the S&P 500 index is 1565. The all-time intraday high in the Dow Industrials is 14, 198.10, reached in October 2007. We are close. After years of acting like deer in the headlights, investors are now throwing cash at the stock markets. Meanwhile, insiders are selling. Google’s CEO is selling more than 40% of his stock. He didn’t sell hardly anything from 2008 through now. There is a thought that insiders are selling now and mom and pop investors are buying, and once we work through this exchange, the markets will tank. This theory is being called the grand rotation. Ahead of tonight’s State of the Union Address, the White House has followed custom by leaking tidbits from the speech. It is expected the president will talk about North Korea testing a nuclear bomb; this, for the third time, and bigger than ever. Apparently Mr. Obama will also announce that 34,000 out of 66,000 troops will come home from Afghanistan by this time next year, which sounds better than it is. That means the Pentagon is roughly on pace to hand over security to the Afghans by the end of 2014, as Mr. Obama has long promised. It also means there will still be more than 30,000 troops in …

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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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