Financial Review

Number 9

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-20-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSDow record high again. Earnings beat diminished expectations. MS, INTC, AXP. VW investigated all the way to the top. Turkey purge. HSBC arrests. The long, strange, fraudulent trip of 1MDB. Bud deal approved. Aetna-Humana, not so much. Financial Review by Sinclair Noe for 07-20-2016

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Financial Review

Upside-Down World

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-12-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 110 = 17,972 SPX + 19 = 2088 NAS + 56 = 4857 10 YR YLD un 1.98% OIL + 2.28 = 51.12   A ceasefire between Russia and Ukraine is scheduled to start February 15, which apparently means that Putin’s little green men still have 2 days to grab as much land as they can. The agreement follows a 17 hour, four-way meeting between Russia, Ukraine, France and Germany in Minsk. The new deal revived a failed September ceasefire agreement, with commitments from each side to pull back heavy weapons, as well as greater autonomy for separatist regions in eastern Ukraine. IMF chief Christine Lagarde also announced today that Ukraine will receive about $40B in funding over the next four years.   Along with the new cease-fire agreement, that won’t actually end the fighting; there was a non-agreement agreement between Eurozone finance ministers to put off decisions on Greece’s bailout terms until next week. Greek officials were unable to reach a deal over its bailout program yesterday, but will return to Brussels on Monday to try to end the deadlock.   Meanwhile, Sweden’s central bank cut its main interest rate into negative territory and announced a bond-buying program this morning. Sweden now joins Denmark and Switzerland and the European Central Bank in negative rate land. So, now, if you want to make a deposit in Sweden, you …

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Financial Review

A Question for the New AG

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-10-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 139 = 17,868 SPX + 21 = 2068 NAS + 61 = 4787 10 YR YLD + .04 = 1.99% OIL – 2.10 = 50.76 GOLD – 5.00 = 1234.70 SILV – .06 = 17.01 Small-business sentiment slipped in January on a decline in optimism over sales growth and business conditions, according to a gauge released Tuesday. The National Federation of Independent Business said its small-business optimism index fell 2.5 points to 97.9, with seven out of 10 components declining.   Good news if you are looking for a job. The Labor Department said job openings surged to 5.03 million in December, the highest level since January 2001, from 4.85 million in November. Hiring jumped to a seven-year high and the number of job seekers for every open position, a key measure of labor market slack, fell to 1.73 in December, the lowest since 2007. The bad news is that there are still about 9 million people looking for a job.   Wholesale inventories barely rose in December, up just 0.1%. Together with data last week showing a 0.3% fall in manufacturing inventories in December, today’s report suggests the boost to GDP growth from restocking in the fourth quarter was probably not as large as initially thought.   Halliburton is cutting as many as 6,500 jobs. The oil company, facing up to the reality of crude oil prices, …

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Financial Review

HSBC – Too Big To Jail

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-09-2015.mp3Podcast: Play in new window | Download (Duration: 13:18 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 95 = 17,729 SPX – 8 = 2046 NAS – 18 = 4726 10 YR YLD + .02 = 1.95% OIL + .90 = 52.59 GOLD + 5.40 = 1239.70 SILV + .28 = 17.07 Let’s start with oil; OPEC lowered its estimate for non-OPEC supply growth this year by about 400,000 barrels a day, the biggest reduction since the forecast was introduced in August. The US led with a cut of 130,000 barrels a day while estimates for Colombia, Canada and Yemen were also trimmed. The group said it may boost global demand forecasts beyond this month’s slight increase amid rising U.S. gasoline use.   OPEC’s research department said: “The main factors for the lower growth prediction in 2015 are price expectations, a declining number of active rigs in North America, a decrease in drilling permits in the US and a reduction in the 2015 spending plans of international oil companies.”   The United Steelworkers strike continues with walkouts at two of BP’s refineries over the weekend. The strike now encompasses more than 5,000 workers at 11 refineries across the country, which account for about 13% of U.S. fuel-making capacity. Facility owners also hit by the strike include Shell, Tesoro, Marathon Petroleum and LyondellBasell.   Cheap gasoline prices have increased 13 cents in the past two weeks to $2.20 a gallon, nationwide average; but not everybody is buying …

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Financial Review

Thursday, May 22, 2014 – A Heckuva Business Model

A Heckuva Business Model by Sinclair Noe   DOW + 10 = 16,543 SPX + 4 = 1892 NAS + 22 = 4154 10 YR YLD + .02 = 2.55% OIL – .31 = 103.76 GOLD + 1.80 = 1294.70 SILV + .10 = 19.59   Yesterday we told you Russia and China had signed a 30 year, $400 billion dollar deal for Russia to deliver natural gas to China. Today, both countries vetoed a United Nations Security Council Resolution seeking to refer Syria to the International Criminal Court for possible war crimes. In the short-term, the Russia-China gas deal won’t have a big impact. The deal will not be in place until 2018 and even then will only see Russia selling a fraction of its gas exports to China every year, exports to the EU could still well be two to four times the size.   The economic links between Russia and Europe will continue to be significant and they will continue to be reliant on each other when it comes to energy; the former to sell the latter to buy, but this link gives an advantage to Russia, especially when the weather turns cold. At least symbolically the deal highlights Russia’s desire to move away from links with Europe. Combine this with Europe’s desire to increase energy security and the relations between the two sides could become increasingly cold and distant. Although, some countries due to geographical proximity, such as Bulgaria or Hungary; or due to long standing …

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Monday, April 07, 2014 – I Don’t Know, They Don’t Know

I Don’t Know, They Don’t Know by Sinclair Noe DOW – 166 = 16,245SPX – 20 = 1845NAS – 47 = 407910 YR YLD – .03 = 2.69%OIL – .44 = 100.70GOLD – 5.40 = 1297.90SILV – .09 = 19.97 The biggest 3 day drop in the markets in about 2 months. All of the sudden we start hearing the Wall Street stock peddlers waxing enthusiastic about the prospects for a correction or a crash or whatever will scare you. Fear sells; with talk about a 1987-like stock market crash, geopolitical unrest in Ukraine and the risk of a debt crisis in China, investors are starting to get jittery. I don’t know, they don’t know. The big pullback so far has been in the Nasdaq, and especially biotech stocks. As always, you want an exit plan in place before you ever get into a trade; and if you don’t have an exit plan, get one now. You don’t make money by letting profits slip through your fingers. Earnings season gets underway this week. Expectations have been ratcheted down; at the start of the year, S&P 500 companies were projected to have grown earnings at 6.5%, now that estimate has slipped to 1.2%. We could see companies beat diminished expectations and start a fresh rally or miss expectations and the markets could get a bit ugly. The simple rule of thumb is that when the trailing P/E ratios hit 10, the S&P 500 is likely undervalued; when the P/E hits 20, …

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Wednesday, March 05, 2014 – Not Much Change

Not Much Change by Sinclair Noe DOW – 35 = 16,360SPX – 0.1 = 1873NAS + 6 = 435710 YR YLD + .01 = 2.70%OIL – 2.40 = 100.93GOLD + 2.40 = 1337.80SILV + .02 = 21.26 ADP, a payroll processing company, reports its own monthly jobs estimate each month, just before the government comes out with its monthly jobs report. Today, ADP said the economy added 139,000 new jobs in February; they revised the January number down to 127,000 from the previously reported 175,000. When the Labor Department reports on jobs Friday morning the best guess is about 150,000 jobs and the unemployment rate holding at 6.6%. So, the ADP report is reasonably close. Separately, initial jobless claims for the past week did not point to any improvement in the labor market with initial claims up 14,000 in the February 22 week to a 348,000 level. In other news, the Institute for Supply Management’s non-manufacturing index slipped to 53.5 in February from 54 the previous month. This afternoon the Federal Reserve published its Beige Book, which is a compilation of reports and observations from the 12 Fed districts. Growth slowed in Chicago and activity was stable in Kansas City. While the other eight districts reported growth, the Fed said it was characterized as “modest to moderate” in most cases, an overall downgrade from its last report on January 15, which showed “moderate” growth in nine regions. Business contacts were still upbeat, and real estate activity picked up in some …

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Thursday, December 12, 2013 – Three Strikes

Three Strikes by Sinclair Noe DOW – 104 = 15,739SPX – 6 = 1775NAS – 5 = 399810 YR YLD + .03 = 2.88%OIL – .06 = 97.38GOLD – 27.10 = 1226.20SILV – .81 = 19.60 Stocks down for a third day in a row, and except for that big gain on the news of the monthly jobs report, this has been a nasty start to December. Weekly jobless claims jumped to 368,00 from 300,000 the week before. Overall retail sales climbed a seasonally adjusted 0.7% last month, the most since June.  Auto sales jumped 1.8% in November, the most since June. Meanwhile, there were drops in retail sales of 0.2% for clothing and accessories stores, and 1.1% at gasoline stations. Online and other non-store retailers saw sales rise 2.2% in November, the most since July 2012. Over the past year, retail sales have grown 4.7%. Inventories at US businesses rose 0.7% in October. Maybe businesses are expecting a great holiday shopping season but it isn’t looking good. Neither the jobless claims nor the retail sales will move the Fed’s current position on tapering. Markets have been focused on the timing and the slope of Fed bond-buying tapering and not on anything else. Most likely, the Fed will meet next week and not taper, but they will likely communicate clearly their intent to taper. The just agreed 2014-2015 US budget deal faces a crucial test today when the House of Representatives votes on the bill, with Speaker John Boehner urging …

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Wednesday, July 03, 2013 – Independence Day

Independence Day by Sinclair Noe DOW + 56 = 14,988SPX + 1 = 1615NAS + 10 = 3443 10 YR YLD + .03 = 2.50%OIL + 1.64 = 101.24GOLD + 10.10 = 1253.50SILV + .34 = 19.82 Today is Independence Day. I know; the Fourth of July is tomorrow, but it is Independence Day in Egypt, or Coup Day, or something. They had huge crowds in Tahrir Square and they celebrated with fireworks, so let’s called it Independence Day. We’re not really sure what it is, but we know a few things. There has been a revolution. The Egyptian army has overthrown President Mohamed Morsi, announcing a roadmap for the country’s political future that will be implemented by a national reconciliation committee. The head of Egypt’s armed forces issued a declaration today suspending the constitution and appointing the head of the constitutional court as interim head of state. Morsi’s presidential Facebook page quoted the disposed president as saying he rejected the army statement as a military coup. Morsi was the head of the Muslim Brotherhood and he had served for one year as president, after being democratically elected, following the revolution that overthrew the sort-of democratically elected dictator Hosni Mubarak. Democracy can be messy. And these are messy, noisy, uncertain and unpredictable days for Egypt. The country is in unchartered territory. The economy is under severe pressure. Most institutions are weak. A credible leader is yet to emerge with widespread support. And, to make things worse, there is no play …

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Thursday, May 30, 2013 – The Money Laundering Criminals at HSBC and Standard Chartered Continue to Skate

05302013 Script The Money Laundering Criminals at HSBC and Standard Chartered Continue to Skate by Sinclair Noe DOW + 21 = 15,324SPX + 6 = 1654NAS + 23 = 349110 YR YLD un = 2.12%OIL + .45 = 93.58GOLD + 21.00 = 1414.70SILV + .32 = 22.88PLAT + 31.00 = 1487.00PAL + 8.00 = 761.00 So, apparently Wall Street moved higher today because the economy looks weaker and that means the Fed won’t taper or quit QE. It’s twisted logic, but we figured it out a while back. The weak economic news started with this week’s initial claims for jobless benefits; applications increased by 10,000 to 354,000. One week does not make a trend. Next week we’ll get the jobs report for the month of May. Today’s figures were just a reminder that the Fed won’t have an easy path to end QE without crushing the labor market. In a separate report, the Commerce Department said first-quarter gross domestic product was revised down to 2.4%, down from an initial estimate of 2.5%.  The gain in first-quarter growth follows a sluggish increase of 0.4% in the fourth quarter. Consumer spending increased, but that was likely due to higher prices for gasoline and electricity. Government expenditures fell by 4.9%, up from initial estimates of a 4.1% drop. The bulk of the decline was in military spending. Inflation as measured by the PCE index was muted, rising just 1.0% overall or by 1.3% excluding food and energy. So, the economy is slowing, the …

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Tuesday, May 28, 2013 – The Central Banks Grand Experiment, Continued

The Central Banks Grand Experiment, Continued by Sinclair Noe DOW + 106 = 15,409SPX + 10 = 1660NAS + 29 = 348810 YR YLD + .12 = 2.13%OIL + .88 = 95.03GOLD – 4.90 = 1382.40SILV – .12 = 22.37 New record highs for the Dow, not for the S&P 500. Last week there was considerable hand wringing and flop sweat about the idea that the Federal Reserve might pull back from QE. And you may recall that I told you that I didn’t think so; we might see the Fed change the composition of the accommodative monetary policy in order to avoid particular asset bubbles, but they would not abandon a loose money policy; they might even try out some new tools. The economic stagnation of the major developed nations has driven central banks in the United States, Japan, Britain and the European Union to take increasingly aggressive action. Because governments are not taking steps to revive economies, like increasing spending or cutting taxes, the traditional concern of central bankers that economic growth will cause too much inflation has been supplanted by the fear that growth is not fast enough to prevent deflation, or falling prices. The European Central Bank faces legal and political restraints that make it harder for the bank to imitate the other major central banks. It cannot finance governments, which limits its ability to buy any country’s bonds. Still, there has been a shift in sentiment from the ECB, including lower rates and a change …

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Friday, January 11, 2013 – Meet the New Boss

Meet the New Boss by Sinclair Noe DOW + 17 = 13,488SPX -.07 = 1472NAS + 3 = 312510 YR YLD – .02 = 1.88%OIL -.06 = 93.76GOLD – 12.10 = 1663.70SILV – .42 = 30.54 Within a few days, Tim Geithner will be gone from the Treasury. Geithner was at the center of the financial crisis, first in his role as President of the Federal Reserve Bank of New York and in 2009 as Treasury Secretary. In a recent exit interview he said: “It was a very bad crisis. No playbook. No road map. No clear precedent. If we had a different set of constraints, particularly in fiscal policy, then I think that the economic outcome could have been modestly better.” To be fair, Geithner was handed a mess, and to his credit he did not turn it into a catastrophe, and there were constraints. Still, Geithner’s tenure at Treasury has been a little less than satisfying. The Too Big to Fail banks are bigger than ever; they operate with an explicit public guarantee, and despite Geithner’s dissatisfaction with constraints placed on him, he did little to challenge the banksters. Geithner quashed proposals to seize bonuses, impose new taxes or otherwise punish bankers. He claimed that it would have destabilized the banks; instead he created a moral hazard and a two-tiered system of justice; Too Big to Fail became Too Big to Jail and the result is the banksters now operate with impunity. At the same time Geithner was …

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Tuesday, December 11, 2012 – If Banks Could Kill They Probably Will

If Banks Could Kill They Probably Will by Sinclair Noe DOW + 78 = 13,248SPX + 9 = 1427NAS + 35 = 302210YR YLD +.03 = 1.65%OIL +.09 = 85.65GOLD – 2.20 = 1711.40SILV – .27 = 33.10 If all goes according to plan, in about 13 days, a star will rise in the east somewhere over Washington DC, signaling the birth of a new budget deal. If you’re waiting for three wise men, don’t hold your breath, because they couldn’t find them in our nation’s capitol. With just days to go before the nation slides down the fiscal Cliff Clavin of tax increases and spending cuts mandated by our confederacy of dunces to take effect with the passing of the arbitrary date on a calendar, there are signs that a deal to avoid the slide is near. Pert’ near every reporter in Washington says a deal is imminent. Just this Sunday, Obama and Boehner met in secret, well, not exactly a secret, and they did something, maybe they came up with a deal, maybe they barbequed some brats and watched some football, but their silence on the subject speaks volumes. Their silence almost provides proof positive that a bipartisan deal must be something that might have possibly been a part of the silent conversation, or not; but hey, it looks like a deal, except for all those pesky details. And it only took two years, possibly, of unnecessary uncertainty and sovereign debt downgrades to hammer out an agreement to …

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Tuesday, September 18, 2012 – Maybe We’ll Just Keep Plugging Along

Maybe We’ll Just Keep Plugging Along -by Sinclair Noe DOW + 11 = 13,564SPX – 1 = 1459NAS -0.87 = 317710 YR YLD -.03 = 1.81%OIL +.24 = 95.53GOLD + 8.60 = 1772.10SILV + .53 = 34.88PLAT – 38.00 = 1635.00 FedEx lowered its outlook for global growth and industrial production when it reported fiscal first-quarter earnings. That has negative implications for energy demand. The world’s No. 2 package delivery company forecast a continued slowdown in global trade. Yesterday, we told you about the little flash crash in oil. The price of a barrel of oil dropped $3 in about one minute for no apparent reason. There were rumors of an announced or leaked SPR release decision, then there were rumors of an algorithmic trade gone bad. The timing was suspect; the equity and other markets have rallied due to all of the announced and expected easing measures from the Fed and the ECB; the belief is that consumption and economic growth will necessarily follow due to extremely low interest rates and the positive effect of inflation on asset values. And commodity prices, including oil, moved higher after QE 1&2. So, it was strange to see prices just drop for no apparent reason; they seemed to collapse of their own weight. Maybe the outlook for the economy is more dire than we think. Maybe demand for oil is far less than projected. Maybe the Fed has done all they can and they’ve run out of firepower. Maybe the odd price …

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Monday, August 6, 2012 – Front Running and Money Laudering – All in a Day’s Work

Front Running and Money Laundering – All in a Day’s Work – by Sinclair Noe DOW + 21 = 13,117SPX + 3 = 1394NAS + 22 = 298910 YR YLD -.02 = 1.55%OIL -.10 = 93.86GOLD + 8.00 = 1612.60SILV +.08 = 27.98PLAT – 5.00 = 1407.00 A couple of weeks ago I said we had entered the Dog Days of Summer; technically that was correct, however the Economic Dog Days officially start this week; there is almost nothing on the calendar, trading volume has dried up; today was the lightest volume of the year, excluding holidays. Knight Capital was trading again but not with the same vigor of last week. Knight managed to find a consortium of investors to pony up $400 million to allow the company to continue to scalp trades. High-frequency trading algorithms have flourished in the past few years, as under-regulation made way for non-regulation.  The mega banksters and their attendant trading firms figured out a way to  make huge trading profits virtually every day, off of their customers, by front-running, which means  they inserted themselves as middle-men into every trade. The high frequency traders set up computer rooms right next to the exchanges to assure they get super fast trade information, just a few milliseconds is enough. The high frequency trade algorithms submit bids-to-buy and offers-to-sell hundreds of times per second, and the computer programs determine exactly what price sellers and buyers are willing to accept. The bids and offers would be near-immediately canceled, because …

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Thursday, July 17, 2012 – Accepting Unacceptable Manipulation or Dude, What Happened To My Pension

Accepting Unacceptable Manipulation or Dude, What Happened To My Pension?-by Sinclair NoeDOW + 78 = 12,805SPX +10 = 1363NAS + 13 = 291010 YR YLD +.04 = 1.50%OIL – .21 = 89.01GOLD – 6.20 = 1583.40SILV unchanged = 27.41PLAT + 1.00 = 1424.00Federal Reserve Chairman Ben Bernanke went to Capitol Hill today. He made some remarks; he took some questions; he did not surprise.  Bernanke said in his testimony:”Reflecting its concerns about the slow pace of progress in reducing unemployment and the downside risks to economic growth, the committee made clear at its June meeting that it is prepared to take further action.” Prepared to act but not acting right this moment. Nothing new. If you were looking for a signal, you didn’t really get it.Bernanke said the risks of a surge in inflation were low and that there was a modest risk of a broad-based decline in prices.Bernanke said  the Fed could also use communications tools, such as extending its pledge to hold rates exceptionally low. He cited the possibility of additional bond buying — whether Treasury debt or mortgage-backed securities — lending through the Fed’s emergency loan window, and lowering the rate the Fed pays banks on reserves held at the central bank. Which is almost a new idea. Holdings of cash and other liquid assets at US industrial corporations rose to $1.7 trillion in March 2012; that’s cash held in short-term and low-risk instruments, which is what the Fed has been selling to buy longer-term as part of …

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Thursday, May 3, 2012 – Jobs More or Less, Europe More or Less, HSBC Mess

DOW – 16 = 13, 206SPX – 10 = 1391NAS – 35 = 302410 YR YLD unchanged = 1.92%OIL +.09 = 102.63GOLD – 17.90 = 1636.80SILV – .58 = 30.17PLAT – 28.00 = 1540.00 Tomorrow the government releases the employment report for April. Economists predict the U.S. gained 160k to 175k jobs last month, up from a disappointing 120,000 in March. The preliminary increase in March was the lowest in five months and fell well short of the 246,000 average from December to February. We’ve seen several reports on jobs that might give a hint on tomorrow’s report: The four-week average of initial jobless claims was 383,500.Jobless claims declined by 27,000 to a seasonally adjusted 365,000 in the week ended April 28. The Labor Department said continuing claims decreased by 53,000 to a seasonally adjusted 3.28 million in the week ended April 21. Continuing claims reflect people already receiving benefits. ADP’s report on private-sector payrolls slowed to 119,000 from 201,000 in March. The employment component of the Institute for Supply Management’s manufacturing report rose to 57.3% from 56.1%, on a scale where readings over 50% indicate expansion. The employment component of the Institute for Supply Management’s services report slowed to 54.2% from 56.7%, on a scale where readings over 50% indicate expansion. Planned layoff announcements rose 7% to 40,559, according to Challenger, Gray & Christmas. What does it mean? It means wait until tomorrow’s report and we’ll find out. This is not the kind of report that you bet on. …

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