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Monday, May 20, 2013 – Daily Scandals and Distractions

Daily Scandals and Distractions by Sinclair Noe DOW – 19 = 15,335SPX – 1 = 1666NAS – 2 = 349610 YR YLD + .02 = 1.96%OIL + .58 = 96.87GOLD + 33.90 = 1395.10SILV + .66 = 23.02 I suppose we should start with the scandal du jour, since this is where most of the news has been fixated recently. I’ll try to focus on how it affects the economy and the markets, but it’s hard to ignore the bluster. One quote I heard over the weekend was “add Watergate and Iran Contra together and multiply by ten” to calculate the tyrannical evil of the Obama scandals. Actually, the current scandals are not even close (I’m old enough to remember the enemies list and plumbers). I don’t think the scandals are inconsequential but I think some historical perspective might help. The rhetoric without perspective might actually backfire. But what we concern ourselves with here is the economic and financial impact. And it’s likely there will be limited economic impact. We’ve seen worse, and the markets survived and sometimes even prospered. Remember Iran Contra? It happened to coincide with one of the greatest bull runs the market has ever seen. And remember the Lewinsky scandal? It coincided with a market that was described as irrationally exuberant; this is often attributed to gridlock in Washington, or some sort of moderation. Actually, the old idea of gridlock being good for markets, doesn’t really hold water. When one party controls both the White House …

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Friday, April 26, 2013 – The Fix is In

The Fix is In by Sinclair Noe DOW + 11= 14,712SPX – 2 = 1582NAS – 10 = 327910 YR YLD – .05 = 1.66%OIL – .86 = 92.78GOLD – 5.30 = 1463.90SILV – .36 = 24.14 The initial guesstimate of first quarter gross domestic product shows the economy growing at a 2.5% pace. Consumer spending increased by 3.2%, the strongest increase in consumer spending in 2 years. Defense spending fell at an annual rate of 11.5 percent in the first quarter, on the heels of a 22.1 percent decline in the last three months of 2012. This is the initial report on GDP and it is subject to revisions. The initial fourth quarter GDP number came in at a negative 0.1% and was revised up to 0.4%; the first quarter estimate of 2.5% is well below expectations, and it certainly isn’t showing enough strength to indicate a solid recovery. Personal disposable income, today’s report shows, actually fell by $140 billion in total from the fourth quarter. Reversion of the payroll tax to its normal rates at the beginning of 2013 will continue to drag on the disposable income of middle-class consumers throughout the year. Business investment in productive equipment and IT — a driver of productivity, innovation, and employment — slowed markedly to 3% growth in the first quarter, relative to nearly 12% in the prior quarter. Residential investment maintained strong growth, however, expanding 13% as housing markets in many areas of the country seem to be turning up. …

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Monday, April 01, 2013 – April Comes in Like a Lamb

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. April Comes in Like a Lamb by Sinclair Noe DOW – 5 = 14,572SPX – 7 = 1562NAS – 28 = 3239 10 YR YLD – .01 = 1.84%OIL – .25 = 97.39GOLD + 1.80 = 1600.40SILV – .28 = 28.12 This week’s economic special is the March jobs report on Friday morning. Another 200,000 or so gain in hiring would lend further support to the idea that the economy is gaining traction despite fiscal cliffs and sequesters, higher taxes and gasoline prices, a still-soft global economy and divided government in Washington . The jobs picture has shown steady improvement over the past 3 years, steady but also lackluster; and while that’s better than massive losses, it still isn’t enough to lift the economy. Job gains have come in fits and starts followed by long lazy naps. The March jobs report should show us the first effects of the sequester. Government has cut more than 800,000 jobs since 2008 while the private sector has added over 5 million jobs. Many of the cuts from the sequester will be furloughs, which mean …

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Thursday, February 07, 2013 –

Waiting for the Apocalypse by Sinclair Noe DOW – 42 = 13,944SPX – 2 = 1509NAS – 3 = 316510 YR YLD -.02 = 1.95%OIL – .74 = 95.88GOLD – 6.30 = 1672.00SILV – .39 = 31.56 Some day this war will end. Some day we will have an apocalypse, not in the terrifying version of the word but in the original Greek definition of “apokalypsis”, meaning an “uncovering”, a “lifting of the veil”, or “the disclosure of something hidden”. One day we will wake up and realize that money is printed out of thin air and it is not a store of wealth but a vessel of debt; the veil will be lifted and we will see the debt masters for what they truly are. Until then we get little surprises in the form of troves of emails revealing the reality that the financial markets are not bastions of cool rationalism, nor are they temples to integrity; and the lubricant of commerce may be nothing more than a tar pit. We have been reading the emails from Barclays, UBS, and S&P describing how they would rig rates or rate deals for a cow if only they could get their cut. Sometimes the language is clipped in an instant messaging style of prose, sometimes it is profane in a way that would make Tony Soprano blush, and it seems to be flowing forth in a never-ending stream of culpability. Some day this war will end. But not today. Today we …

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Wednesday, February 06, 2013 – A Trend of Banks Behaving Badly

A Trend of Banks Behaving Badly by Sinclair Noe DOW + 7 = 13,986SPX + 0.83 = 1512NAS – 3 = 316810 YR YLD -.05 = 1.97%OIL + .20 = 96.84GOLD + 4.10 = 1678.30SILV +.03 = 31.95 At last count, 282 companies in the S&P 500 index had reported quarterly earnings and 74% were beating analyst earnings projections. Gas prices are up 7% in the past week. The Federal Reserve confirmed that one of its internal Web sites was hacked into yesterday. You might think the Fed databases are pretty secure. Turns out nothing in cyberspace is secure; just see what happened to the New York Times, the Wall Street Journal and the Department of Energy; and that’s just the past couple of weeks. The Congressional Budget office says the US budget deficit this year will hit $845 billion, which sounds like a lot of money, but for the first time in a long time, it won’t hit a trillion. The Justice Department filed a $5 billion civil complaint yesterday accusing McGraw-Hill and S&P of three types of fraud, the first federal case against a ratings company for ratings related to the credit crisis. No surprise. The transcripts of the Federal Reserve’s FOMC meeting in 2007 show the Fed didn’t trust the ratings agencies. Fed Chairman Bernanke said: “There is an information fog” that “is very much associated with the loss of confidence in the credit-rating agencies.”And Fed Governor Kevin Warsh said: the firms’ “credibility has been shot” and …

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Subsidizing Bad Behavior by Sinclair Noe DOW + 18 = 13,507SPX – 1 = 1470NAS – 8 = 311710 YR YLD – .02 =1.86%OIL + .64 = 94.20GOLD + 5.10 = 1668.80SILV + .64 = 31.18 This morning, President Obama held the final news conference of his first term. The debt ceiling was a major topic. The President demanded lawmakers raise the nation’s $16.4 trillion federal debt limit quickly, warning that, “Social Security benefits and veterans’ checks will be delayed” if they don’t and cautioning Republicans not to insist on cuts to government spending in exchange. Republican congressional leaders repeated their demand that increases in borrowing authority must be accompanied by spending cuts. Obama, flat out rejected that, saying: “They will not collect a ransom in exchange for not crashing the economy. The full faith and credit of the United States of America is not a bargaining chip. And they better decide quickly because time is running short.” The president opened his news conference with a statement by saying that a vote to increase the debt limit “does not authorize more spending. It simply allows the country to pay for spending that Congress has already agreed to. These are bills we’ve already racked up and we need to pay them.” Obama said he was willing to consider future deficit cuts, but only if they are done independently from a vote to raise the $16.4 trillion debt limit. The debt limit must be raised to prevent a default, a series of …

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Thursday, December 20, 2012 – Plan B, Plan S

Plan B, Plan S by Sinclair Noe DOW + 59 = 13,311SPX + 7 = 1443NAS + 6 = 305010 YR YLD un = 1.80%OIL -.03 = 89.95GOLD – 18.70 = 1648.20SILV – 1.06 = 30.02 I’m thinking we just go over the cliff. Why not? It looks more and more that they aren’t going to get anything done. They say they are close, they say it is possible, but really, I don’t have confidence. President Obama held a press conference. And he said he had gone at least halfway in meeting some of the Republican concerns. At least halfway? So he’s admitted that he’s already met them in the middle, and likely gone past the middle into Republican territory. And we’re still two weeks out from the fiscal cliff deadline, with Republicans sitting around waiting for the inevitable further concessions Obama will make. Why didn’t Obama say something like, “I made a more than fair deal. The GOP rejected it. So now I’m pulling the offer off the table and waiting to see what the GOP has to offer. Clock’s ticking!” Instead, the GOP will bank the concessions he’s already made, then demand more. Rinse. Lather. Repeat. Meanwhile, Speaker John Boehner is just playing with himself. He’s offered up a Plan B for a vote in the House. One of the touted benefits of “Plan B” is that it only raises taxes for those making $1 million or more. Eric Cantorsaid this morning, the plan would raise revenue “without …

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Wednesday, December 19, 2012 – You Can’t Kill a Bank, Even With a Bushmaster

You Can’t Kill a Bank, Even With a Bushmaster by Sinclair Noe DOW – 98 = 13,251SPX – 10 = 1435NAS – 10 = 304410 YR YLD -.03 = 1.80%OIL + 1.49 = 89.42GOLD – 5.00 = 1666.90SILV – .66 = 31.08 All right, let’s start with a refresher course; Libor stands for the London Interbank Offered Rate. It’s the rate at which banks are able to borrow money from each other. The lower a bank’s rate (banks submit their own rates) the healthier it’s deemed to be. If you’re balance sheet is healthy, you get a low rate when you borrow. If your balance sheet is known to contain toxic assets, you have to pay a higher rate to borrow. The rates were especially indicative of banks’ health during the peak of the financial crisis when the markets were all but frozen and access to funds were limited. The Libor rate is determined daily; sixteen banks submit their rates to an agency; the four highest rates are wiped out and the four lowest rates are wiped out. The result is averaged and the daily Libor rate is published. It would take more than one bank to manipulate the rates. But once the rate is published it affects trillions of dollars of financial instruments around the globe. More than a dozen banks in the U.S. and Europe are under investigation for Libor rate rigging. Even though it is not really surprising, the sheer scope and audacity of the market manipulation …

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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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Tuesday, October 2, 2012 – The Church of England and the Case Against Usury

The Church of England and the Case Against Usury – by Sinclair Noe DOW – 32 = 13,482SPX + 1 = 1445NAS + 6 = 312010 YR YLD – .01 = 1.62%OIL – 22 = 91.67GOLD – .80 = 1775.40SILV – .03 = 34.72 Late yesterday I noticed a report citing the Church of England taking on British Banks. I’d like to thank an astute and alert listener for another version of the story to my attention. As many of you know, I wrote a book about the bankers’ role in the financial crisis, and I paid particular attention to the role of usury. The book is “Eat the Bankers: The Case Against Usury, the Root Cause of the Economic Crisis and the Fix”. (Click here for more info on the book.) There is a direct relationship between usury and the current economic problems. The rise in usury led directly to predatory loans, foreclosures, personal and business bankruptcy, debts that spiral out of control and never seem to get paid despite good intentions. Many families have suffered quietly, blaming themselves for what was happening. Bankers have no moral compass. They reject compassion and try to shift culpability. Usury traps the most desperate; it is a form of regressive taxation that chops away at the middle class and working poor. Usury enslaves the borrower and oppresses the poor. Usury wasted a great economy by shifting investment capital away from productive purposes. Usury stunts economic development and perpetuates poverty. Usury was condemned …

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