Author Interviews

Erin Arvedlund

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/ERIN_ARVEDLUND_10-19-2014.mp3Podcast: Play in new window | Download (Duration: 19:50 — 9.1MB)Subscribe: Apple Podcasts | Android | RSSListen to the author interview. Click the banner to buy the book. Open Secret: The Global Banking Conspiracy That Swindled Investors Out of Billions by Erin Arvedlund “Gaming the LIBOR—that is, fixing the price of money—had become just that: a game. Playing it was the price of admission to a club of men who socialized together, skied in Europe courtesy of brokers and expense accounts, and reaped million-dollar bonuses.” In the midst of the financial crisis of 2008, rumors swirled that a sinister scandal was brewing deep in the heart of London. Some suspected that behind closed doors, a group of chummy young bankers had been cheating the system through interest rate machinations. But with most eyes focused on the crisis rippling through Wall Street and the rest of the world, the story remained an “open secret” among competitors. Soon enough, the scandal became public and dozens of bankers and their bosses were caught red-handed. Several major banks and hedge funds were manipulating and misreporting their daily submission of the London Interbank Offered Rate, better known as the LIBOR. As the main interest rate that pulses through the banking community, the LIBOR was supposed to represent the average rate banks charge each other for loans, effectively setting short-term interest rates around the world for trillions of dollars in financial contracts. But the LIBOR wasn’t an average; it was a combination of guesswork and outright …

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Financial Review

Thanks Hank

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-07-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 272 = 16,719 SPX – 29 = 1935 NAS – 69 = 4385 10 YR YLD – .07 = 2.35% OIL – 1.91 = 88.43 GOLD + 1.50 = 1209.30 SILV – .16 = 17.29 The S&P 500 dropped below its 50-day moving average last week and has yet to move back above that level. Coincidentally, the S&P 500 has been sliding for a few weeks, going back to September 19, which was the day of the Alibaba IPO, just coincidentally. The Dow is also trading below its 50 day moving average. Welcome to the start of earnings season. In the past 3 months the US dollar has jumped by 8% against the euro. That makes American goods more expensive relative to European goods. And it wasn’t just the dollar against the Euro, but against a basket of foreign currencies. It is estimated that a 5% rise in the dollar versus the euro results in a drop of about $1 for full-year Standard & Poor’s 500 Index per-share earnings; current estimates for the S&P are running around $118. Partly because of the dollar and the related decline in oil prices, earnings estimates have seen one of the largest downward revisions over the last few years aside from the weather-beaten first quarter of this year. Earnings-per-share are projected to have grown 4.9% in the third quarter, that’s down from 7.8% earnings …

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Tuesday, February 25, 2014 – Dumb Luck

Dumb Luck By Sinclair Noe DOW – 27 = 16,179SPX – 2 = 1845NAS – 5 = 428710 YR YLD  – .05 = 2.70%OIL – .76 = 102.06GOLD + 5.00 = 1342.60SILV – .07 = 21.99 Just a couple of economic reports to start. The S&P/Case-Shilller home Price Indices for December were posted today. Nationally home prices closed the year of 2013 up 11.3%, while posting a fourth quarter decline of 0.3%. After 26 months of consecutive gains, Phoenix posted -0.3% for the month of December, its largest decline since March 2011. Phoenix once led the recovery from the bottom in 2012, but Las Vegas, Los Angeles and San Francisco were the top three performing cities of 2013 with gains of over 20%. Another sign that the housing market slowed down during the fourth quarter: Fannie Mae, the nation’s largest mortgage guarantor, saw demand for foreclosed properties dip at the end of the year. Fannie reported last week an $84 billion annual profit for 2013 on the backs of large home-price gains and a series of one-time legal and accounting benefits. The report also showed that its inventory of foreclosed homes increased for the second straight quarter as it begins to take back more properties in Florida and other states where foreclosures have been tied up in courts. The report showed that the prices Fannie received on those properties, as a share of the underlying mortgage balances, declined slightly from the prior quarter for the first time in 2½ years. …

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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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Monday, December 3, 2012 – Still in the Woods and Other Economic News

Still in the Woods and Other Economic News by Sinclair Noe DOW – 59 = 12,965SPX – 6 = 1409NAS – 8 = 300210 YR YLD + .02 = 1.63%OIL +.01 = 88.92GOLD + .80 = 1717.00SILV + .22 = 33.76 Let’s start with the economic news. Business among manufacturers contracted in November and fell to the lowest level in more than three years. The Institute for Supply Management’s index of purchasing managers dropped to 49.5% from 51.7% in October. Any reading below 50 indicates contraction in the manufacturing sector. The decline in the overall ISM index largely reflected a steep drop in new orders but companies remained active fulfilling prior orders. Only six of the 18 U.S. manufacturing industries surveyed by ISM said they expanded somewhat faster in November. Nearly twice as many said their industries contracted. In the euro zone, manufacturers contracted for the 16th straight month, according to Markit. China’s manufacturing sector expanded slightly. In a separate report, the Commerce Department said spending on construction projects advanced 1.4% in October to the highest level since September 2009. The big economic news will come on Friday with the monthly jobs report. The best guess is that the economy added about 75,000 jobs in November, but that is just a guess; Hurricane Sandy has distorted some of the economic numbers. The fourth quarter of 2012 has clearly gotten off to a slow start. Consumer spending, by far the biggest source of economic growth, fell in October for the first …

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Wednesday, November 7, 2012 – Status Quo

Status Quo by Sinclair Noe DOW – 312 = 12,932SPX – 33 = 1394NAS – 74 = 293710 YR YLD -.11 = 1.63%OIL – 4.11 = 84.60GOLD + .40 = 1718.30 SILV – .18 = 31.94 Technically speaking, Barack Obama, Joe Biden and Senate Democrats were Election Day’s big winners. But that’s only if you believe something called the election results. Who were the night’s real winners? The policy wonks and demographic statisticians were big time winners. They were able to data mine and focus like a laser on key counties and precincts, and they played it to perfection. The Republican presidential primary candidates, who are no longer lonely. Chris Christie, because whatever his chances for 2016, he got to meet the Boss (Springsteen, not Obama). Tim Geithner, who now gets to land a cushy job as director of such and such bank or a big endorsement deal from TurboTax. Governor Jerry Brown because he doesn’t have to go back to the drawing board. That guy from fivethirtyeight, who nailed the prognosticating. And Barack Obama had an okay night. The losers would have to include all the lawyers who were itching for a recount. The state of Florida which showed they are incapable of a count. All those dudes in Colorado who will have to listen to all those jokes about Rocky Mountain High. Kid Rock, just because. Twitter, just because. And Barack Obama because he still has 4 more years. The good news is that the age of big …

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Friday, July 20, 2012 – Why Hasn’t Anything Been Fixed on Wall Street?

Why Hasn’t Anything Been Fixed on Wall Street?  -Sinclair NoeDOW – 120 = 12,822SPX – 13 = 1362NAS – 40 = 292510 YR YLD -.05 = 1.46%OIL – 1.14 = 91.83GOLD + 2.30 = 1585.00SILV +.05 = 27.43PLAT – 3.00= 1421.00For quite some time it has been accepted that Greece was toast; the Greeks would be forced to swallow the bitter pill of austerity; somehow the Euro-union would survive. And the EU seemed to be dealing with the meltdown of Ireland and Portugal as well; they just forced them to pay for their own bailouts; that plan isn’t working out so well with Spain. The Kingdom of Spain was supposed to be the firewall where the breakdown of the Euro-union stopped; that plan isn’t working our so well. The problem today is Valencia, a region of Spain, not the orange; they are asking for a $22 billion dollar bailout; apparently in addition to the $123 billion dollar assistance package that is going to bailout Spanish banks and backed by the Spanish citizens, at least theoretically. May be good for the banks but the Spanish economy is still in a downturn and the government says it will step up austerity measures.Spain’s IBEX stock index fell 5.8 percent, its biggest one-day drop in two years, and the risk premium on government debt hit a euro-era high as its borrowing costs rose to 7.32 percent. That yield is above the 7 percent threshold considered unsustainable, with little relief in sight. And that is …

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Wednesday, July 18, 2012 – A Primer on Money

A Primer on Money– by Sinclair NoeDOW + 103 = 12,908SPX + 9 = 1372NAS + 32 = 294210 YR YLD -.02 = 1.48%OIL +.72 = 90.26GOLD – 8.90- = 1574.50SILV -.13 = 27.28PLAT – 12.00 = 1412.00It’s earnings reporting season: Ebay profit more than doubles. IBM profit was up and they raised their outlook. American Express profit came in flat. I don’t think earnings have as much impact as they once did. Treasury Secretary Tim Geithner was speaking at a conference in New York. Geithner says the economy is definitely slower than we’d all like it to be. He cited 3 reasons: “It’s slower mostly because of the trauma from Europe, the after effects of the rise in oil prices earlier this year, and because government spending is actually falling now quite significantly. Those three things are a pretty significant drag on a recovery.”Geithner also defended his response, or lack thereof, to the Libor rate rigging scandal: “We acted very early in response to the concerns that the processes to set this rate were impaired and flawed, and vulnerable to misrepresentation,” he said. “The U.S., to its credit, set in motion at that stage a very, very powerful enforcement response, the first results of which we have now seen,” and “There is more to come,” he added, but provided no details. Four years after the fact, Barclays is fined; finally an investigation starts; maybe something will happen, wow, that was soooo powerful. Apparently Geithner never heard the phrase, justice delayed is …

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Friday, July 13, 2012 – Jamie Dimon is to Jerry Sandusky as Tim Geithner is to Joe Paterno

Jamie Dimon is to Jerry Sandusky as Tim Geithner is to Joe Paterno-by Sinclair NoeDOW + 203 = 12,777SPX + 22 = 1356NAS + 42 = 290810 YR YLD +.02 = 1.50%OIL +.99 = 87.07GOLD + 17.20 = 1590.40SILV + .13 = 27.44PLAT + 15.00 = 1438.00JPMorgan Chase reported second quarter earnings of $5 billion; part of that is from accounting gimmickery – turning loss reserves into profits and such; and that’s after losses from the trading unit in London. The Chief Investment Office, or CIO, also know as the London proprietary trading unit, aka., the London Whale, sometimes known as Voldermort, occasionally referenced as he whose name can not be spoken – they lost $5.8 billion. Jamie Dimon, the CEO said back in May that the losses were $2 billion; now Dimon says that in a worst case scenario the London Whale losses will grow to $7.5 billion; the slow motion train wreck is still happening and Dimon can’t stop it. Dimon claimed traders may have deliberately hidden losses and the bank will restate first quarter earnings within the next week or so. So, there was this small trading unit in London and they accounted for about one-quarter of the bank’s net income, several billions of dollars in profits, and wants you to believe that he didn’t know what they were doing. His best story is that he is remarkably incompetent yet pleasantly surprised when billions of dollars of profits just magically materialized out of thin air. All right, MF …

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