That Was The Week That Was-3rd Week October

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• I misplace car keys, pens and cell phones. President Clinton, according to a new book, misplaced the nuclear strike key for retaliation if we were under attack. Now we are told Fiji seems to have lost their document of independence presented by Prince Charles in 1970. The U.K. has agreed to send over a photocopy. (Has anyone checked our Declaration of Independence lately?)
• Back from a few days out of town and the investment forecast suddenly signaled squalls.  When I left it looked like clear equity sailing with QE2 on the horizon but last Tuesday China tosses in a rate hike and Bank of America losses billions and suddenly it’s a new ballgame. Gold falls as rate hike signals new direction. The worst day for the markets since August 11th.
• Dividends, glorious dividends. According to Bloomberg BusinessWeek ‘investors are driving up phone stocks not for their growth but their dividends’. Phone stock dividends are higher than their bond yields.
• Whisper from Wall Street 24/7.com is if Microsoft get their iPhone right their stock is cheap. HP out with their new tablet last Friday but smaller screen than iPad.
• Entitlements will be under scrutiny if lessons from across the Atlantic are any indication, according to Randall W. Forsyth of Barrons.com.  Means testing is coming, dear reader. You very well may pay into them but getting benefits may depend on need. Reductions of social security, Medicare and government assistance are on the menu of things-to-do for the coming decade.
• Goldman Sachs reinventing itself as it has reported its second consecutive quarterly profit decline- off 40%. Losses extended from 37% decline in fixed income net revenue and 43% loss in net revenue from stock trading.
• Last Wednesday’s action was in direct contrast to Tuesday’s. All indices up triple digits and China was forgotten like an uncle who doesn’t  send Christmas cards. CNBC reported that Bernanke’s buying binge will benefit global stocks like Coke and McDonalds.
• According to Barrons.com Technical writer the Tuesday selloff was just the ticket for a much needed dose of reality in a rising short-term trend. Markets, according to Michael Kahn, are expected to rise for the short term.
• Want to get into the metals mania but don’t know where to invest? Gold, silver, platinum or palladium? (Didn’t kids from Grosse Pointe chant that while jumping rope? ). A new ETF will have all four and it is called the ETFS Physical Precious Metals Basket Shares. The metals will be stored in vaults managed by J.P. Morgan Chase & Company. Later in the day a JP announced a new copper ETF.
• Suzie Orman shilling for Ameritrade. Suzie doesn’t trade but buys insured muni’s for her own account. I don’t get it. Maybe someone at Ameritrade hopes other don’t either.
• Kellogg, Snap, Crackle, Plop (Not me, Barrons.com reporting poor performance for the cereal giant).
• Best performing hedge fund bet against the U.S. economy. Up 38% year to date.
• Smart money is betting against Bank of America. The poster boy for the foreclosure mess is in the crosshairs as investor short the stock. According to Barrons.com investor pessimism remains robust. Robust is the operative word here.
• On that…CNBC talking heads wondered if an equity rally could be sustained without the financials…the consensus on Friday last, the mortgage foreclosure problem may be overblown and there are no problems with GS and a few others.
• Pity the poor French who now have to work to age 62 before receiving full state retirement benefits. The horror! The new law is effective November 1st and 69% of the citizenry oppose its passing. (Don’t the French have wines and cheeses older than that?) I have a bunion at least that old.
• A mere bagatelle as gold fell 3% for the week.
• Good news as cheap money is causing companies to pump up their pension plans. Honeywell, Lockheed Martin, Boeing and Parker Hannifin Corp are investing more into their pension plans to bolster them against future troubles.
• G-20 decided to give merging countries a bigger say in the IMF. This was an acknowledgement of sorts specifically for Brazil, Turkey and China.
• No currency wars, says T. Franz Geithner. (Unless it’s us.)
• Finally, FDIC shuttered more banks with a year to date tally of 137 closed and 800+ on their watch list.

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