That Was The Week That Was-2nd Week November

• Monday last was just the beginning of the markets back tracking giving up 37 points on the Dow as the dollar strengthened against all currencies except the yen and gold kept on a climbing.
• What metal if you missed the gold rush? How about silver, according to CNBC. Seems silver, which has more uses than gold in manufacturing, is trailing historical values.
• In my inflation blog November 8th I wrote the  QE2 Fed policy wasn’t making us any friends overseas and seems I was  right. The prez got an earful on his visit to India from world leaders who own U.S. dollars and/or seeing the price of oil pop. Germany, who else, is at the head of this parade.
• From a Morgan Stanley recent report reprinted in MarketWatch.com November 9th: ’ Our analysis indicated that China’s economic shift toward domestic consumption and away from investment is beginning and will likely prove a mega-trend through 2020, supporting our economist’s views that China is entering a golden age for consumption.’  Get this? 
• Wedge Partners analyst Brian Blair issued a stunning forecast on Apple’s prospects in 2011. Boiled down he said he thinks Apple is the best positioned company in the tech sector and thinks the firm can sell 100M iPhones and 48M iPads next year. Mama mia! ‘
• WSJ weekend edition extolled the virtues of utilities. The experts say money managers and investors are snapping up shares as they’ve finally realized the growth potential in a ‘green world.’ We’ve been saying that for over a year and have been buying utility mutual funds & stocks for our clients.
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• Longevity in your family? The Bobby Layne Retirement Plan called for him to die when the money ran out. But, new products called longevity insurance can guarantee income starting at age 85. You don’t get anything now but at a certain senior age you start getting fixed income checks for the rest of your life. Watch my coming blog for more details on this very interesting product.
• Tuesday markets off 60 points on the Dow as concerns over European banks. Ireland stand first to fall as the WSJ reports that bad loans dominate at what were once sleepy banks lured into a world of bad debt and speculation. Expect more through the holidays. Dollar strengthens.
• Same day same WSJ report commodities continue to surge as strong demand from emerging markets are pushing prices higher. Copper, gold and cotton at all time high’s while the U.S. Department of Agriculture cut its harvest estimates for soybeans and corn. This is just the beginning, dear reader. 
•   Reason #1 I don’t cruise. For four days last week Carnival luxury liner without power being towed to nearest port. Passengers eating pop tarts and Spam. ‘nuff said?
• Is Bernanke’s QE2 over before it starts? Seems many traders believe it is. The engine to spur the markets may have pooped out.
• Wha’s with Cisco? The tech giant posts big numbers and then gives glum guidance. CEO Chambers said the company would power through what the company believes are short term challenges. After the weak guidance 13 tech companies saw their stock price lowered.
• Let me see if I have this right. A bunch of nitwits in government and banking threw the global economy into the toilet and the Administration of both parties bailed them out. Now a Deficit Panel has a White Paper that demands the American public pay for it by slashing Social Security, increasing the gas tax and eliminating the deduction of mortgage interest.  (Sounds fair to me, how about you?)
• China’s markets fall 5% as fears of rate increases to combat inflation spook investors. Fallout will continue until sense returns.
• Mark Hulbert reports in MarketWatch.com that Cisco’s stock spanked for reporting sales to grow more slowly. Price of share now undervalued according to Prudent Speculator editor Buckingham. (If this doesn’t define 2010 markets I don’t know what does.)
• Silver, according to ETF Tremds, the hot metal du jour.  
• The prez can’t get a trade agreement with S. Korea. Restrictions by the Koreans only allowed 6000 U.S. cars to be sold while the Koreans sold close to 500,000 in the United States.
• Gee-20 says manana to deal with economic imbalances such as currency wars. Leaders at the Seoul conference brushed off the president and agreed to next years summit to develop an imbalance assessment. (Can someone tell me why else they were there? Anyone?)
• Markets fell hard Friday on China growth worries (it’s always something), as all stocks and commodities took a substantial hit. Still stocks look like the only game in town according to Zacks.com as corporate earnings were positive almost 4-1 over companies that did not meet expectations, the S&P is trading at a modest PE of 13.1; the bond rally appears to be ending and signs that the small investor is coming slowly back is always encouraging.
• The General Motors stock offering expects to issue 365 million shares or raise $10 billion. According to James Stewart at WSJ.com at the stated high end of the IPO the shares are a great deal. Even China’s car maker SAIC is finalizing a plan to buy shares at the IPO price.
• Finally, it was a lousy week that started that way and just got worse. The Koreans gave the president the bum’s rush using his recent election losses to renege on a deal that would have allowed more cars to be sold in their country. Traders got gutless as China’s rate hike and metals sold off more than expected. Even Saturday Night got into the act making fun of the president and the Koreans in the opening set.

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