Financial Review

No Expectations

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 100 = 17,131 SPX + 14 = 1998 NAS + 33 = 4552 10 YR YLD un = 2.59% OIL + 1.79 = 94.71 GOLD + 2.20 = 1235.90 SILV + .03 = 18.79 Tomorrow the Federal Reserve FOMC wraps up its meeting to determine monetary policy. Even before the Fed issues a statement, the financial press is dissecting every phrase and utterance of every Fed policymaker, and trying to impart conflated significance to every twitch of an eyebrow or overstuffed briefcase. It’s pretty simple really; not much has changed over the past couple of months; the Fed is on track to end the large scale asset purchases under QE; the Fed will raise rates at some point, unless something drastic changes; the nuances of language are inconsequential. There, I’ve just condensed about 100 articles into about 100 words, and you didn’t miss anything. You’re welcome. Today, China jumped on the QE bandwagon. The People’s Bank of China will print about 500 billion yuan, which works out to about $81 billion. They will hand out the money to the five largest banks in China. That money will eventually make its way into the financial markets. Considering the cost of printing 500 billion yuan…, US producer prices were flat in August. The Labor Department said falling gasoline and food prices restrained its producer price index for final demand last month. The …

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Financial Review

Rarified Air

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08212014 DOW + 60 = 17,039 SPX + 5 = 1992 NAS + 5 = 4532 10 YR YLD – .02 = 2.40% OIL + .45 = 93.90 GOLD – 15.10 = 1277.30 SILV – .04 = 19.52 The S&P 500 broke two records during today’s session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Family Dollar has rejected a $9 billion dollar buyout offer from Dollar General, opting instead for a smaller $8.5 billion dollar offer from Dollar Tree. The thinking is that a combination of the largest dollar store – Dollar General with the #2 Family Dollar, would be unlikely to win antitrust approval. Once upon a time, Sears was the largest retailer in the nation. Today, Sears Holdings announce it lost $975 million in the first half of the year; $573 million in the second quarter. This was the 9th consecutive quarter of losses, and the past quarter also marked the heaviest losses. Quarterly revenue dropped about 10%. The plan now is to close underperforming stores, or, in a classic example of corporate-speak “rationalizing our physical footprint.” The company successfully spun off Lands End earlier this year, to the benefit of shareholders. But its Sears Canada and Sears Automotive stores have been on the block for some time, indicating either a lack of interest …

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Thursday, August 22, 2013 – Nasdaq Freezes, Goldman Expresses Interest

Nasdaq Freezes, Goldman Expresses Interest by Sinclair Noe DOW + 66 = 14,963SPX + 14 = 1656NAS + 38 = 363810 YR YLD + .07 = 105.10OIL + .04 = 2.90%GOLD + 9.30 = 1377.10SILV + .30 = 23.29 A few weeks ago, I told you that August has a tendency to be a volatile month in the markets. Volatility can be positive or negative. So far it’s been rough sledding. And even when the markets have an up day, it was a mess, a big frozen mess. The Nasdaq shut down for about 3 hours today; trading was halted. More on that in a moment. The volatility has been largely tied to the Federal Reserve and the idea that they will taper off the $85 billion a month securities purchases known as QE. Probably. The best bet now is that they will start to trim purchases by $15 billion a month in September, and by the middle of 2014, they will try to stop the QE purchases. Once, we thought it would be tied to the unemployment rate or the inflation rate, but now that’s just a technicality. Of course, the Fed might not actually stick to this course, but that’s the betting for now. Nasdaq said trading was halted in shares it lists because of problems at its Securities Information Processor, the feed that disseminates quotes and prices. So they stopped all transactions. Boom, a little after Noon Eastern. Buying and selling in some of the most heavily …

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Uncategorized

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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