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Thursday, June 21, 2012 – Like Crack for Bankers – by Sinclair Noe

DOW – 250 = 12,573SPX – 30 = 1325NAS – 71 = 285910 YR YLD – .02 = 1.62%OIL – 3.20 = 78.25GOLD – 41.60 = 1566.20SILV – 1.24 = 26.98PLAT – 19.00 = 1445.00Here is the bottom line on today’s declines; Wall Street has become addicted to free money from the Federal Reserve. Stimulus from the Fed is like crack for the Wall Street bankers. Yesterday, the Fed refused to pass out more free money. Today, Wall Street got a bad case of the shakes.One of the concerns when Bernanke and pals fail to act is that they can’t really think of anything they might do that would have any real effect, or maybe they’re satisfied with 2% inflation and 8.2% unemployment. So what if Bernanke doesn’t have any more ammo?Then we are left to the devices of fiscal policy, in other words; what can the politicians in Washington do to stimulate the economy? The most likely answer is that the politicians can drive the economy over a cliff. While that might seem cynical, it’s really just pragmatic. And then, of course there is the Lehman Brothers event with subtitles looming in Europe. If Europe collapses, the thinking is that Bernanke will find a few more bullets in the form of QE3, and he will once again toss money at the Wall Street bankers. The Wall Street crack whores will fire up their pipes and place “risk-on” trades with the certainty that the Fed will place a put against any …

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February, Friday 17, 2012

DOW +46 = 12950SPX + 3 = 1361NAS – 8 = 295110 YR YLD +.02 = 2.01%OIL +1.75 = 104.06GOLD – 5.00 = 1724.80SILV -.24 = 33.38PLAT + 11.00 = 1638.00 The stock market is looking great. The S&P 500 hit a nine-month high. The Dow is back at levels from the beginning of 2008, (record high was 1517 for SPX) (14,198 for Dow). At least it’s looking decent. The market was cruising along with triple digit gains, but couldn’t hold into the close. Confidence is one thing, but going long heading into a holiday weekend.., well, let’s not get carried away. Optimism was high that there would be some sort of  deal worked out to rescue Greece by burying the country under unsustainable debt.  Euro-zone finance ministers will be meeting over the weekend to hammer out details. The big challenge is to cut Greece’s debt down to 120% over the next 8 years; to do this, the Greeks will have an orderly default of debt, paying off bonds at about 30 cents on the dollar for private sector investors and about a 50% haircut for the central bankers that hold Greek bonds. And nobody is quite sure if the private sector investors are going to accept the haircut. In return for the discounts, the Greeks would accept, maybe, harsh austerity measures that will contract the economy. And they keep saying they will have a deal, probably by Monday. And all I can think of is that Homer is now …

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