Tuesday Musings- Last Week In April

• Ouch- Monday banks fell as debate on final financial reform package hit a wall. Dow saw slight up Monday with all other indices down. The financials were off 1.7%. Whirlpool was a bright spot with a 10% gain that led the Dow. Office Depot was up 6% after being upgraded. It was week were losers outnumbered winners the combination of Greece and Goldman knocking the markets for a loop.
• Market guru Woody Dorsey says this could be the correction coming. He sees ‘global tightening trend’ emerging that may cause weakness in stocks. The coming April employment report could bring stocks down this week.  
• I remember when people used to smile.
• Dems pull derivative provision from proposed legislation after Warren Buffett explained he’d have to set aside $8 billion to cover potential losses. Sen. Ben Nelson (D Neb.) asked that the language be taken out of the proposed bill. Nelson owned between $500,000 to $1,000,000 of Buffett’s Berkshire stock as of last year. No word if he still does. Anyone want to bet?  
• Start hoarding kisses, candy kisses ‘cause cocoa surges on short supply. I love their bellsy Holiday commercial.
• Call the phone police! Cops bust California blogger who published reports about Apple’s next-gen iPhone. Reports said blogger’s computers and servers were seized by California’s Rapid Enforcement Allied Computer Team. No word if REACT team kicked in doors while wearing Teflon pocket protectors, or not.
• Tuesday F posts $2+billion profit. Euro &  Asia  lower as Greece worries just keep on coming up like a plate of too spicy mousaka. Ratings agency downgrades debt of Greece to junk and Portugal two notches but still investment grade. (I’ve always said what leads markets lower and higher is stuff you don’t think about, it’s there you just don’t think about it.) Markets drop over 200 points, dollar strengthens, oil falls and gold up. It was any excuse to sell, and downgrading Greece was the catalyst for profit taking.
• But the real action and taking center stage Tuesday afternoon was grilling junior GS execs by Carl ‘Torquemada’ Levin and Company. Better then any soap the Senators even got the investment lingo right and bored right in. What was surreal was watching GS stock rise and fall as CNBC showed it in a small picture box all through the inquisition.
• The SEC examining ‘side pocket deals’ where hedge funds do not allow investors to withdraw their money while still charging a fee. Also at issue is valuation of assets which the fee is based and charged.  All during the economic meltdown.  Still want to invest with a hedge fund?
• Wasn’t the stimulus supposed to create jobs, fix roads, bridges, crumbling infrastructure? Just asking.
• Wednesday markets moved up, albeit slightly. Germany ponies up its share of Greek bailout, not without grumbling. Total bill is estimated at 100 billion euro. Spain downgraded by S&P. Back home- Fed reiterated rates will remain low for an extended period of time. No def on extended period of time. Traders exhale after holding their breath for 2 days. Senate Financial Bills hits rut and stalls again x 3. Treasuries slip despite healthy 5 year note sale.
• HP makes premium cash offer for beleaguered Palm. Do you remember Palm? Does anyone remember Palm? It was hot IPO in 2000 and then there was Apple. Now do you remember Palm? HP said it paid less than six bucks a share. Some said it was worth zero per share.
• Markets stoked on Thursday up 122 on the Dow. Barrons made strong recommendation P&G and Unilver – both showed strong sales and profits at Unilever jumped 33% as the consumer is back to brand names. Exxon, Conoco & Occidental up as oil prices lift the majors. Natural gas off-down over 1/3 since January high. Lukewarm winter provided massive stockpiles. Lack of demand and huge supply may hurt this trade until 2011.
• Friday brought bad news as financials led the markets lower following a sell downgrade on GS. Feds also investigating criminal charges. Spain unemployment hits 20%. Greece agrees to new austerity measures. President calls off offshore drilling. US economy grew at 3.2% boosted by consumers. Economists say we’re not in the clear just yet. Core inflation increased 1st quarter 0.6%, that’s not counting energy and food. This was the lowest reading since 1st quarter 1959. The WSJ reports, consumer spending bodes well for the future. Business spending also increased by 4.1% through the end of March as inventories increased to satisfy growing consumer demand.
• Top 5 mutual funds with assets & % amount invested in Goldman Sachs: Natixis CGM Advisor Targeted Equity A: 8.29%, CGM Focus: 8.20%, Wells Fargo Advantage Large Co Gr Adm: 8% & CGM Mutual: 7.71%. Current clients have no extraordinary GS exposure through my current recommended funds.
• Warren Buffett defends GS, said ABN Amro & ACA as making a dumb credit decision. He went on to say he didn’t care who was on the other side of the trade it was up to the buyer to assess the credit. GS pays Berkshire $15.00 a second for its preferred. 
• Sarah Palin was in Clarkston over the weekend. Am I the only one that finds her voice annoying?
• 7 banks were closed this past week, including one in Michigan, making a total of 64 year to date. Last year 140 banks were closed.

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