Financial Review

Closing In

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-29-2018.mp3Podcast: Play in new window | Download (Duration: 13:15 — 7.6MB)Subscribe: Apple Podcasts | Android | RSS…Fed minutes show no preset course. Michael Cohen flips. Mueller closes in. G20 – Putin meets MbS. Trump meets Xi. Nothing gets resolved. Financial Review by Sinclair Noe for 11-29-2018

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Wednesday, May 29, 2013 – Behind the Curtain

Behind the Curtain by Sinclair Noe DOW – 106 = 15,302SPX – 11 = 1648NAS – 21 = 346710 YR YLD – .01 = 2.12%OIL – 2.12 = 92.89GOLD + 11.30 = 1393.70SILV + .19 = 22.56 Earlier today, I listened to one of the talking heads on CNBC trying to explain why the markets were up yesterday and down today. It was very entertaining. When mortgage interest rates fall, the probability that an individual will re-finance a mortgage increases. When mortgage interest rates increase, the likelihood of a re-financing of the mortgage goes down. Therefore, in a rising rate environment, the average life of a pool of mortgages increases. For example, if a bond fund held Mortgage Backed Securities (MBS) with an assumed 10-year average life, and interest rates rose, the average life of the MBS portfolio would be extended for a few years. The last thing that a bond manager wants in a rising rate environment is to have the average maturity of the portfolio extended, as this adds to the losses. As a result, MBS players hedge their portfolios against “duration risk” by shorting Treasuries. The higher rates go, and the speed that rates are increasing, forces more and more selling. Is there a level of support that we can watch? There is, and it’s probably 2.2% to 2.5% on the 10-year bond that will bring out an avalanche of selling. The 2.2% tipping point is very close to where the T-bond sits today. Others say we …

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Thursday, October 18, 2012 – The Only Day Like it Ever

The Only Day Like it Ever by Sinclair Noe DOW – 8 = 13,548 SPX – 3 = 1457NAS – 31 = 307210 YR YLD +.01 = 1.83%OIL un = 92.09GOLD – 8.30 = 1742.60SILV – .38 = 32.92PLAT – 19.00 = 1651.00 Do you remember where you were 25 years ago? It was a Sunday; 1987. The news of the day was that Nancy Reagan had been hospitalized with cancer; there was a threat of war with Iran and within 24 hours the US was shelling Iranian oil platforms; there were concerns about Germany’s currency; the United States, wanting to prop up the dollar and restrict inflation, tightened policy faster than the Europeans. US pressure on Germany to change its monetary policy was one of the factors that unnerved investors.The stock market had a wave of steady selling on Friday and the Dow dropped 108 points. Most people really weren’t aware; this was before we all had computers and smart phones and tablets. Maybe you read about the Friday sell-off in the Sunday newspaper. Maybe you thought about selling a little bit of your portfolio, but the truth is that it was already too late. Halfway around the world, the dollar-backed Hong Kong markets were chopped down 10%. And then the crash spread. European bond markets collapsed, which caused interest-sensitive savings and loans and money center banks to plunge. Monday morning, October 19, 1987 the crash washed across lower Manhattan. In a flash, the Dow crumbled and by the …

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