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Tuesday, October 16, 2012 – Big Bank Complexity, Debate Drinking Games, Food Supplies Not a Game

Big Bank Complexity, Debate Drinking Games, Food Supplies Not a Game -by Sinclair Noe DOW + 127 = 13,551SPX + 14 = 1454NAS + 36 = 310110 YR YLD +.06 = 1.72%OIL + .11 = 91.96GOLD + 10.90 = 1749.30SILV + .26 = 33.06PLAT + 5.00 = 1650.00 (audio at MoneyRadio.com) Today was the biggest gain for the stock markets since early September. What was behind the move? Was it a debate day rally? Was it a Vikram Pandit exit? Was it great earnings reports from some such company? Who knows? It’s rarely any one item that moves the market significantly. It is more likely that trading has reached a certain level or a particular moment in time, and the news events catch up with the charts. Yesterday, the earnings news centered around Citigroup which reported something I still can’t figure out; lots of debt that is counted as profit. Today, Vikram Pandit, the CEO of Citi, is gone. Pandit says he left voluntarily; others think he was forced out in a disagreement with the board of directors. The strange part is that Citi has seen a rebound of about 22% in the past 12 months. Pandit has been on the job for about 5 years; he took the job as the credit crisis was about to send the economy into the abyss; now, he walks away when the company has learned to turn debt into profit and appears to be finding stable ground. Citi shares have dropped 90% under …

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Tuesday, June 12, 2012 – Cleaning Off My Desk on an Off Day – by Sinclair Noe

Did you notice that the Non-bailout Spanish Bank Bailout grew over the weekend?  Last Friday, the International Monetary Fund said Spain’s banks would need to raise at least $46 billion dollars as a buffer against a sharper economic contraction and to stabilize the Spanish financial system and prevent contagion to the rest of the Euro-zone. Before the weekend finished, the bailout had grown to more than $125 billion and we were already hearing warnings that it wasn’t enough. The bailout has almost no chance of success and it seems just a matter of time until the Euro-powers that be impose harsh conditions on Spain. The Euro-zone leaders seem unwilling or unable to change from their austerity policies, even as Greece and Spain fall apart and the core euro-zone economies contract. Four years after the financial crisis began, many rich capitalist economies have not recovered their pre-crisis output levels. There are 60 million fewer people employed worldwide than if the pre-crisis trend had continued. In countries like Spain and Greece, overall jobless rates are approaching 25%, with youth unemployment over 50%. Even in countries experiencing “milder” unemployment problems, like the US and the UK, between 8% and 10% are out of work. If we include those who have given up looking for jobs or those who are forced to work part-time for want of fulltime opportunities, “real” unemployment could be easily over 15% even in these countries.The remedies on offer are well known. Reduce budget deficits by cutting spending – especially “unproductive” …

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Friday, April 13, 2012

DOW – 136 = 12,849SPX – 17 = 1370NAS – 44 = 301110 YR YLD -.05 = 2.00%OIL – .81 = 102.83GOLD – 16.80 – 1659.50SILV – .88 = 31.60PLAT – 20.00 = 1581.00 The S&P 500 is now down 3.4 percent from this year’s closing high, after falling 2.7 percent over the past two weeks. Wells Fargo and JP Morgan reported first quarter results; both beat expectations. JP Morgan came in with EPS of $1.31 on $26.7b in revenues; topping estimates of EPS $1.18 and revenues of $24.6b. Wells Fargo posted EPS of $0.75 on $21.6b in revenues, beating estimates of $0.73 and $20.4b. JP Morgan made a big chunk of earnings by lowering their reserves for loan losses by $2 billion. In the last 2 years, JP Morgan has generated $12.3 billion in non-earning earnings, even as non-performing loans increased by $600 million in the last quarter. Or as CNBS said, they “blew expectations out of the water.” Blowing smoke is more like it. WFC – 3.4% JPM -3.6% BAC -5.3% GS -4.4% C -3.5%. Jamie Dimon, the CEO of JP Morgan said he would fight buyback demands or repurchase claims on mortgage securities that turned sour. Bank of America has already lost a few of these multi-billion dollar battles. JP Morgan is in the same business as Bank of America. Jamie Dimon briefly responded to questions about the Chief Investment Office, or CIO; that’s the proprietary trading division. According to JP Morgan the CIO division uses approximately …

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