That Was The Week That Was – End of July

• Oh, my, the G-20 agreed to debt reduction instead of promoting stimulus spending. Obama capitulated. The compromise was to have language to cut deficits with ‘growth’ as a priority. Germany argued moving later rather than sooner to reduce debt could produce unsustainable debt levels and even defaults- see Greece, Spain, et al.The US argued growth friendly, which is where it ended.
• Reverse Mortgages reduce up-front fees. Problem is less equity in homes.
• ‘Smoke if you got ‘em.’ Markets responded to the Supreme Court’s refusal to a tobacco industry ruling which the government sought $10 billion for smoking cessation programs and disgorgement of $280 billion in profits. Tobacco stocks rose as did telecom stocks on Monday. The rally petered out by the close as markets fell slightly.
• China stocks fall Tuesday morning and drag the rest of Asia and Europe along with them.Concerns over the IPO Ag Bank of China suggests that investment activity slowing.
• China AgBank IPO may be largest ever but not the best China has to offer.Pricing of shares may come 6th of July.AgBank banked by the government with a specific mandate to narrow wealth gap between city and rural citizens.
• In May it was the G’s that dragged markets down: Greece, Governments and the Gulf. June it’s the C’s with China and Consumer Confidence. I don’t have enough in me to do the whole alphabet, how about you?
• Markets off emulating overseas- Dow off 268 points. Huge disconnect between perception and reality driving average investor’s nuts. Tuesday’s massacre was telling investors, according to Jimmy ‘Ze Mouth’ Cramer, said on his show Tuesday night, ’last house built, last car made, last loan given because the world ends here. Sarcasm played well to whatever audience wasn’t drowning their sorrows with vintage May 2010 red.
• Hedge fund billionaire Paulson is wildly bullish on the economy while economist Paul Krugman argues that we face a third depression. Interestingly Ann Benjamin, CIO of leveraged asset management at Neuberger Berman see plenty of good companies that have been downgraded by the rating’s companies and will be soon see their credit ratings upgraded. (This should not surprise any investor)
• Save a tree – Stop a law: 1935 Social Security Act took 28 pages to explain. 2010 Financial Reform Bill filled 2,319 pages.
• Nancy Pelosi wants greater oversight of the CIA and other intelligence agencies to be expanded to all of Congress in contrast to the President’s more conservative  view of only a select few, notably the gang of eight. That should eliminate any secrets in Washington.
• Finally in the I’m With Stupid Department, AG Eric Holder had a tete a tete with Afgan Prez Karza about the $3.2 billion dollars of cash and aid being flown out of country to parts unknown by peoples in the  Afgan government. Karza denied knowledge of any wrongdoing and agreed to investigate. Wonder which one was crossing their fingers.

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