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Friday, August 09, 2013 – May All Your Wishes Come True

May All Your Wishes Come True by Sinclair Noe DOW – 72 = 15,425SPX – 6 = 1691NAS – 9 = 3660 10 YR YLD – .01 = 2.57%OIL + 2.57 = 105.97GOLD + 2.30 = 1315.70SILV + .31 = 20.66 As we started the week, I warned that August can be fairly volatile in the stock market; it seems like the lazy days of summer and volume is usually lackluster, as it was today, but sometimes that just intensifies price swings. The markets were down again today, the fourth decline in the week, and the first weekly decline on the heels of six weeks of gains. The Dow was down 1.5% for the week. The S&P pushed back to 1700 a few times but couldn’t break through. This week’s declines don’t seem to tell us much; we could go either way next week. Yes, I know the rally is long in the tooth; going back to March 2009, the rally is 4.4 years old, longer than the average rally, but it really is too early to start catching falling knives. There wasn’t much in the way of economic reports this week; earnings reporting season is winding down, Congress is away on Summer recess. I guess it’s been about a week since we saw the guesstimates on second quarter GDP, and you’ll recall that the guesstimates included revisions that go back 83 years. The government is recalculating the numbers to try to get a more accurate picture. One of the …

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Thursday, June 28, 2012 – Adverse Selection, Asymmetric Information, Large Numbers, and Healthcare

Adverse Selection, Asymmetric Information, Large Numbers, and Healthcare – by Sinclair NoeDOW – 24 = 12,602SPX – 2 = 1329NAS – 25 = 284910 YR YLD – .04 = 1.58%OIL +.79 = 78.48GOLD – 22.20 = 1553.00SILV -.62 = 26.42PLAT – 19.00 = 1396.00If you had gone to Las Vegas and put down $5 dollars on Obamacare with John Roberts as the swing vote, your odds would have been about a million to one. According to Vegas bookmakers, nobody placed that bet; it was just too outrageous. This morning, a majority of the Supreme Court upheld the constitutionality of the Affordable Care Act, otherwise known as Obamacare. The big surprise, was the vote by the Chief Justice of the Court, John Roberts, to join with the Court’s four liberals.On the crucial issue in the case – whether the “individual mandate” requiring almost all Americans to purchase health insurance was a constitutionally-permissible extension of federal power under the Commerce Clause of the Constitution – Roberts agreed with his conservative brethren that it was not. If that was the end of the decision, it would have killed Obamacare, instead, it just tripped up the reporters at CNN and Fox who were so intent on trying to deliver “breaking news” that they forgot to read before speaking.  Roberts upheld the law because, he reasoned, the penalty to be collected by the government for non-compliance with the law is the equivalent of a tax – and the federal government has the power to tax. What’s …

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Wednesday, June 27, 2012 – To Your Health; Spanish Junk; Barclays Bad; Falcone Flunks; Bhopal Veggie Garden; Goodnight Stockton

To Your Health; Spanish Junk; Barclays Bad; Falcone Flunks; Bhopal Veggie Garden; Goodnight Stockton – by Sinclair NoeDOW + 92 = 12,627SPX + 11 = 1331NAS + 21 = 287510 YR YLD -.01 = 1.62%OIL +.27 = 80.48GOLD + 1.60 = 1575.20SILV – .17 = 27.04PLAT – 18.00 = 1415.00According to the Centers for  Medicare and Medicaid Services, health spending accounts for about 18% of the GDP of the United States. So, tomorrow’s ruling by the Supreme Court on President Obama’s health care plan is pretty important, but so far the economists can’t seem to figure out the implications. This is not to say I have any advance info on the Supreme Court decision. They might say the Act is fine as it is, they might say they will eliminate the mandate but leave the rest unchanged, they might throw out the whole thing.  If they vote against Obamacare it will be seen as a highly partisan act. What better way to show the Court’s impartiality than to affirm the constitutionality of legislation that may be unpopular? That might be a stretch; I think I’ll stick with the idea that we’ll have to wait till tomorrow.The only safe bet is that there will be unintended consequences. For example, what if the Supremes strike down the mandate portion but leave the rest intact? The Obama administration put a mandate in the Affordable Care Act because the law requires insurers to charge the same premium regardless of health status. Without a mandate, it would …

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Friday, June 1, 2012 – Someday the Violence Will End – by Sinclair Noe

DOW + 93 = 12,554SPX + 10 = 1325NAS +  27 = 285810 YR YLD -.02 = 1.64%OIL – .47 = 84.35GOLD + 6.20 = 1595.70SILV -.06 = 28.63PLAT – 10.00 = 1437.00 For the week, the Dow advanced 3.6 percent, the S&P 500 rose 3.7 percent and the Nasdaq jumped about 4 percent. It was the best percentage weekly gain for all three indexes since December. President Obama held a White House press conference this morning. The initial focus of the prepared remarks dealt with the European economic problem, not a Euro-debt crisis as the president noted. Obama went on to talk about the US economy and a few other issues. Obama tried to explain how the European economic problems could impact the American recovery and pushed Congress to pass parts of his “to-do” list aimed to stimulate economic growth. But during a question and answer session, the president said the private sector is “doing fine,” and he referenced the importance of jobs losses in the public sector. Mitt Romney criticized him for being “out of touch,” and so Obama backtracked and said the economy is not doing fine and he said: we’ve actually seen some good momentum in the private sector… record corporate profits…so that has not been the greatest drag on the economy.” He once again pressed Congress to provide aid to states to employ public sector workers including teachers and provide small businesses with tax breaks to help rejuvenate a sluggish recovery. Of course that isn’t …

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Thursday, April 26, 2012 -Home Sales Up, Expectations Up; Beard on Beard Violence; Spain Sinks; Draghi’s Pretzel Logic; Big Banks Payday Tactics

DOW + 113 = 13,204SPX + 9 = 1399NAS + 20 = 305010 YR YLD -.02 = 1.96%OIL – .50 = 104.05GOLD + 12.80 = 1658.10SILV + .38 = 31.19PLAT + 16.00 = 1574.00 The number of people seeking U.S. unemployment benefits last week was 388,000; basically unchanged from a week earlier. The National Association of Realtors’ pending-home-sales index rose 4.1% to 101.4 in March. March pending home sales were up 12.8% from year-ago levels. A sale is listed as pending when the contract has been signed but the transaction has not closed. Sales of existing homes during the first quarter were the strongest in five years, and the NAR said the pending home sales data suggests the second quarter will be equally good. Pending sales are now at a 23 month high. We told you there would be a push to stimulate the economy by way of the housing market. It probably started with Operation Twist, and the Fed buying mortgage backed securities, and then continued with the push for HARP 2.0. We had a plethora of earnings reports today. Pulte Homes posted a smaller than expected loss. Citrix Software posted a better than expected profit. Amazon.com reported better than expected earnings even though profit dropped 35% from a year earlier. Of the 51% of the S&P 500 companies that have reported first-quarter results so far, 72.4% have reported earnings above expectations, 11.8% reported earnings in line with expectations and 15.7% reported earnings below estimates. It’s all about expectations. …

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