Wednesday, August 28, 2013 – What Could Go Wrong?

What Could Go Wrong? by Sinclair Noe DOW + 48 = 14,824 SPX + 4 = 1634NAS + 14 = 359310 YR YLD + .05 = 2.76%OIL + 1.09 = 110.10GOLD + 1.80 = 1418.80SILV – .13 = 24.49 It is now almost certain that the United States, and an as yet unspecified number of its allies, will launch an airstrike against Syria and the forces of Bashar al-Assad. Let’s look at how this might happen. We know that it is highly unlikely that US troops will be on the ground in Syria; that would be highly risky, very expensive, and extremely unpopular. The White House has said there will not be boots on the ground. While the US is trying to cobble together a coalition of the willing to give some legal cover for attacking Syria, American military planners are fine-tuning a playbook that will likely focus on missile attacks and possibly bombing runs. Right now, there are four Navy destroyers waiting in the eastern Mediterranean Sea. It is expected they will lob cruise missiles toward Syrian targets; likely starting the missile barrage at night in order to limit civilian casualties. In the light of day they will assess damage and start the next round of attacks; if they need to hit harder, they’ll call in the big bombers, the B-2s, which are capable of flying round trip from their base in Missouri. The idea is to attack the command posts, communication nodes, troop and delivery systems, things like missile …

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Tuesday, July 16, 2013 – No Inflation Except if You Drive

No Inflation Except if You Drive by Sinclair Noe DOW – 32 = 15,451SPX – 6 = 1676NAS – 8 = 359810 YR YLD – .02 = 2.53%OIL – .55 = 105.77GOLD + 8.30 = 1292.50SILV + .08 = 21.11 Start with the big economic report of the day; the Consumer Price Index, or CPI, which measures inflation at the retail level, increased 0.5% in June. A 6.3 percent surge in gasoline prices accounted for about two thirds of the increase. In the 12 months through June, the CPI advanced 1.8 percent. Stripping out energy and food, consumer prices increased 0.2 percent for a second straight month. That took the increase over the past 12 months to 1.6 percent, the smallest rise since June 2011. No real inflation except for energy prices. A separate report from the Fed showed output at the nation’s factories, mines and utilities rose 0.3 percent in June after a flat reading in May. Another report showed confidence among single-family home builders at a 7-1/2 year high in July, with expectations of stronger sales and buyer traffic. In earnings news, Coca Cola reported earnings of $2.6 billion, down from $2.7 billion a year ago. They tried to blame the shortfall on bad weather but I think people are cutting back on drinking soda. Goldman Sachs posted second quarter net income of $1.9 billion compared with $962 million, in the period a year earlier. So, profits are up 100 percent. How is that possible, especially considering the …

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Monday, July 15, 2013 – Lazy Days of Summer

Lazy Days of Summer by Sinclair Noe DOW + 19 = 15484SPX + 2 = 1682NAS + 7 = 360710 YR YLD – .04 = 2.55%OIL + .52 = 106.47GOLD – 1.60 = 1284.20SILV + .01 = 20.03 On a quiet Monday in the middle of the summer, in the middle of July, stocks pulled out modest gains today, but it was good enough for another record for the Dow Industrials and the S&P 500. The S&P posted its 8th consecutive advance. The Nasdaq 100 posted its 14th consecutive advance. Volume was light, the slowest trading session of any full trading day this year. So, this record setting rally is looking a little long in the tooth. The Commerce Department reports retail sales rose a seasonally adjusted 0.4% last month, that was less than expected. Let’s break it down: Sales got a big lift in June from the auto industry, with purchases up 1.8%. That’s the biggest gain since last November. Gasoline sales, meanwhile, climbed 0.7% on a seasonally adjusted basis.  Sales also rose for home-furnishings, pharmaceuticals, personal care, clothes and hobby items. Sales fell 2.2% at home-improvement stores, by 1.2% at bars and restaurants and by 1% at department stores. The auto sector generates about one-fifth of all retail spending. Excluding autos, sales were unchanged. So, here’s what is happening; the price of gas is going up; people are trading in their old gas guzzlers for more fuel efficient cars; the savings on gas pay for the newer car. …

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Monday, July 08, 2013 – Nothing Recedes Like Progress

Nothing Recedes Like Progress by Sinclair Noe DOW + 88 = 15,224SPX + 8 = 1640NAS + 5 = 348410 YR YLD – .07 = 2.65% OIL – .17 = 103.05GOLD + 13.50 = 1238.30SILV + .18 = 19.18 Took a little break for the Fourth of July, so we have some catching up to do. Friday morning the jobs report showed the unemployment rate holding steady at 7.6%, even as the economy added 195,000 jobs. Better than expected but not good enough; possibly proving the adage that nothing recedes like progress, or at the very least we know that the path of progress is neither swift nor easy. More than 8 million people are working part-time for economic reasons; nearly 3 million are working in temp jobs; more than 4 million are in the ranks of the long-term unemployed; more than one million are considered discouraged, they’ve just given up I suppose. If the labor market holds steady and job creation continues at the current rate, the unemployment rate will dip below 7 percent sometime in mid- 2014; by which point the majority of American workers will be part-time. We really should be adding more than 300,000 jobs a month, not fewer than 200,000. As the Economic Policy Institute points out, we would need more than five years of job growth at this rate to get back to the level of unemployment that prevailed before the Great Recession. Still, the 195,000 new jobs should boost expectations for growth and inflation, …

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March, Wednesday 28, 2012

DOW – 71 = 13,126SPX – 6 = 1405NAS – 15 = 310410 YR YLD + .01 = 2.20% OIL +.13 = 105.54GOLD – 18.50 = 1663.10SILV – .55 = 32.14PLAT – 16.00 = 1640.00 Oil prices fell. The United States, France and Britain are in talks about possibly releasing strategic petroleum reserves. The problem is not a lack of supply. Not now anyway. Maybe tomorrow, maybe next week, maybe this summer; not today. The economy faces multiple risks: the Greeks might vote the technocrats out of office and tell the ECB to go to hell; Spain might default next and it would require a firewall that is bigger than the mother of all firewalls to avoid a cascading default; the Euro-banks hold twice as much toxic waste as their American counterparts, and their American counterparts still have extremely significant exposure to the Euro-trash; Japan’s debt to GDP makes the southern European countries look fiscally conservative – oh yeah the country is radioactive; China might slow down and the slowdown might be worse than expected. And then there are a few problems here in the US: unemployment at 8.3% (or is that inflation?), unemployment around 18% if you count all the invisible people that nobody wants to count, and the banks are still behaving badly and with impunity. I get the feeling that something is going to break. I don’t know what, but something is just going to stop working. Maybe it will be a breakdown in the electric grid, …

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