retirement interruptus: That Was The Week That Was

The week started bad and ended bad and there was nothing anyone could do as the forces of nature put an exclamation point on Friday.
It all started on Monday and Magic couldn’t keep the markets from tumbling and oil from rising as the dollar tanked and there was mixed reaction from traders. The week opened with markets lower. Even Apple and Google saw a sell- off as fund managers cut their stake in two of the tech bellwethers stating that the icons of the web needed more hits and they couldn’t foresee that happening.
The dollar was crushed and threatening to break through a leading bearish indicator. The fact that the dollar has not been a haven of safety during the Middle-East crisis has some traders alarmed. As oil spiked the dollar fell and since oil is traded in dollars worldwide made oil relatively the same in price to everyone except us during the Middle East crisis.
The Magic Show continued last week with the Ben Bernanke supposedly focusing on domestic core inflation when in fact he was manipulating the price of oil even as Traders thought they were.
Morgan Stanley UPGRADES Starbucks and according to Barrons.com it is on track to becoming the fastest growing large cap restaurant.
All it takes is confidence to set the markets roaring as a triple digit Dow gain Tuesday last was sparked by positive comments by Bank of America’s CEO Brian Moynihan who said he ‘believed’ the bank had the ability to earn between $35-$40 billion in pre-tax earnings when the business normalizes. He went on to say the bank was focusing on returning every dollar in capital to shareholders through regular dividends, share buybacks and special cash dividends. Barrons.com apparently agrees in their weekend on-line commentary, saying the bank has the possibility of having shares go higher.
Not everyone was giddy with BofA’s bluster. Howard Ward, Chief Investment Officer of growth equities at Gamco said, ‘They can take market share from one another, but its an industry facing no growth and a lot of regulations that haven’t been sorted out yet.’ Cue the Hallelujah Choir.
FDIC seized two banks; one in Milwaukee and another in Oklahoma bringing the stealth total to 25 banks for the year. It ain’t over.
According to the UN food prices hit a record in February. ‘Millions more people are sliding into poverty as they struggle to afford basic food supplies.’
Sprint & T-Mobile back to talks…again…but expect nothing ….soon…. Sprint up but continues to disappoint and is a darling of the trading range set.
Barrons.com reported that a report from Spectrum Group, an Illinois consulting company that survey the rich and retired, found that 75% of the R&R expected a call back from their financial advisor within 12 hours of their initial call and that the #1 pet peeve was that their advisors did not! Seems 57% of the glitterati would switch advisors if given bad advice but 73% would leave when ignored. Lesson, dear reader, is to find a polite but ignorant advisor.
Say bye-bye to Smith Barney as Morgan Stanley decides to remove name of wealth management firm it now fully owns. It bought 51% in 2009 from Citi and recently negotiated buying the rest of the company.
Does anyone remember Dunkin Donuts cereal? It was Big in the 80s.
Wednesday last another ugly day as Moody’s downgraded Spanish government debt triggering a drop in the Euro with gold and oil both slightly off.
China swings to a Trade Deficit! and the sky didn’t fall and ‘shut-my-mouth’ markets didn’t tumble into an abyss as February imports exceeded slightly exports. Good news as this may temporary alleviate pressure against the government to make the Yuan stronger against the dollar.
Besides wanting to know from Maury ‘Who’s the daddy’ other interested folks are wanting to know where the price of oil is heading. The wise folks at Barrons.com were accommodating and interviewed energy analyst extraordinaire Greg Priddy who said, ‘There is going to be a continuation of some risk premium in crude as we head into the future. And there is still a possibility of additional disruptive events. However, I don’t think another major disruptive event in the near term is the most logical scenario. But with this political unrest percolating…we are not going to see the fear premium come out of crude anytime soon.’
From The Leave It To Beaver Department of Nostalgia: In 1990 unemployment was 5.3%, gas cost $1.16, a first class stamp was 0.25cents, a new home was $149,800. But no one was any happier because we had Dan Quayle as vice-president!
Thursday opened with markets in disarray after Wednesday’s punishing triple digit drop across all indices including metals and oil. Japan hit with a tsunami and fears of it striking Hawaii and the western mainland. Saudi police fired at about 200 civilian protestors as unrest spread into Arabia. Too much bad news and not a glimmer of good is forcing Bulls into retreat.
Management unrest at GM as the CFO called it quits.
Bill Gross of PIMCO eliminated all Treasuries from his Total Return Fund. That is most telling. I spoke with PIMCO dealer services on Thursday and they told me that Gross liked emerging market debt a lot.
Friday the markets mixed with gold down a skosh and oil down about three dollars a barrel. But the amazing thing is that the markets didn’t panic. 3M led the day with Caterpillar following; a bet that rebuilding in Japan would benefit the stock. The yen jumped as nervous Asian investors brought home their currency. There was also some relief as demonstrators were peaceful in Arabia and not violent as predicted.
Football (what are we to do with our Sunday afternoons?) may be delayed or cancelled for the season as the Player’s union decertified and it’s every man and bruiser for himself. Expect courts to determine what’s next.
The venerable Las Vegas Sands Hotel and Casino is no more. The last place I had the pleasant olden day experience of 2 deck blackjack dealt by hand is …sob…closed forever. Business simply stank..or is it stunk?
Lehman probe by US attorneys is over, done, fini, ended, cancelled as the government knows it cannot prove its case. Everybody is off the hook. Even if the prosecutors had a slight edge it would take until the middle of this century to prove any kind of criminal endeavor.
Finally-European markets were down 2% , oil ended at $100., retail in February was up 1%, the Dow and S&P were both off 1% for the week while Nasdaq was down 2.5%. As 2 nuclear reactors were in crisis the Bank of Japan propped up the Yen with massive infusion of cash but it was a temporary measure. This was the last thing Japan needed as they were just digging themselves out of a lousy decade of deflation. Expect more turmoil this coming week.