Tuesday Musing-Second Week In May

• EU worked over the weekend to put together bailout before Asian markets opened on Monday. Guarantees and loans $1 trillion. ( I took four nerve pills before the open)Like the AIG bailout this was a creditor bailout and not a Sovereign debt rescue package.  Whatever- it worked and domestic markets soared 404 points, gold only slightly off.
• Whispers at the close this is the beginning of a correction. But- James O’Sullivan, chief economist for MF Global, said, despite headwinds the momentum domestically is building and the ‘odds are heavily stacked for solid growth’.
• Anyone else see 60 minutes report on what’s happening with homeowners who are under water with their mortgage but working  and afford the payment but decided not? Fancy name for being a deadbeat, ‘Strategic Default’. Based on this non-rational thinking everyone who buys a car, drives it for a week should return it because it’s underwater.
• Today’s Jack Jones, Michael Buble’.
• SEC cannot find smoking gun, what was responsible for the 1000 point market drop.  6 exchanges work out deal when markets overheat. (Yes, we can get along).
• Tuesday markets off slightly. Gold hits all time high. Toyota bullish, GM mulling returning to the car lending biz after selling its stake in GMAC.
• By the by –? Wasn’t saving GMAC by the administration so people could get GM & Chrysler car financing? (I am soo confused).
• Wednesday morning brings news US prosecutors investigating Morgan Stanley for misleading investors re: mortgage derivatives it manufactured and sold.  Just as Martha Stewart learned you do not mess with Uncle Sam.
• Boeing upgraded to Outperform.
• 2 sides to the coin- arguments that $1 trillion EU bailout doesn’t fool bond investors and then others that praise the move and preach euro will regain strength. In the meantime strong countries are listed as Canada, Australia, Norway, China and India.
• Gold and dollar do not lock-step. One is very wrong.
• Wednesday markets got a shot in the arm as IBM gave positive guidance over the coming five years.140 points on the Dow. Cisco profit up 63% give positive news on domestic growth.
• Coming to your 401k plan soon fixed income annuities. Labor Department mulling. I say let it mull. Adding income annuities will only create more problems.
• Market closed Friday down but up for the week.
• Asian markets closed lower Monday, Dow down on midday trading and gold stumbles as Euro is at 4 year low.

If you have questions call Paul at 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money