retirement interruptus: That Was The Week That Was

Th..th..th..that’s all, folks! Expect cell phones and cost of usage to get more expensive ( or maybe not?) as ATT&T girded its loins for an extensive battle with regulators to acquire T-Mobile. It’ll take a year to get to an outcome but in the meantime a rising tide will benefit Verizon and, some folks think Sprint. Domestic markets moved 178 points on that and other news. Gold back to where it was pre-tsunami and oil over 103 a barrel.
Financials moved up last week as the Commerce Department revised US GDP for the 4th quarter. Regional banks were among the strongest performers.
Citi plans a reverse stock split 10-1 plus a dividend. Usually a reverse stock split is the kiss of death for a company but AIG pulled it off and it worked only after AIG stock was hit by short sellers and then reversed direction and almost doubled. CEO Pandit, in Bloomberg’s Businessweek, plans on more exposure to emerging markets even as the company currently earns more than half its profits in developing countries. This is one of those stock plays you watch and watch and watch.
Michael Dell of Dell (the computer company) just bought (OK, not now but the week before) another $150 million dollars of his company stock. Pundits say the company is no longer relevant and Dell is saying, it is not over. On December 7th Michael Dell spent $100 million for shares. What does Michael know that no one else does?
Since the financial crisis sent US stocks to a 13 year low in March 2009 the market has staged it biggest two year bull run since the Great Depression. …and it did that despite high unemployment, the European debt crisis, and a devastating oil spill. In 2011 with high oil, uprisings in the Arab world and Japan’s earthquake, tsunami and threat of a nuclear meltdown the S&P-500 index is up three percent!- Bloomberg BusinessWeek.
The bank behind AT&T is JP Morgan who put up a $20 billion bridge loan ONLY if AT&T used the bank as an advisor on the deal. The WSJ reported, ‘So much for trying to whittle banks down to more manageable size!’
Detroit now the size of Columbus, Ohio.
Hoarders in the office, according to a recent Office Max survey: 46% of employees said they had trouble prioritizing what to throw out, 59% said they hid office supplies from co-workers and (gasp) 56% said they took supplies home. One worker stole 400 rolls of toilet paper, 160 bundles of paper towels and 12 soap dispensers. (clean body, clean mind, take your pick. kingston trio.)
Wondering why your processed frozen dinner is going up and up in price? Wheat since June, 2010 +27%, Cocoa doubled since 2007, Coffee beans since 2007+104% and milk powder + 23% since November 2010. Adding a commodity based mutual fund to your portfolio will help you take advantage of rising prices.
Warren Buffett would like to buy something in India but worries about foreign ownership issues. He expressed an interest in a company that is simple and that he could understand like candy or chewing gum. (Source 3/22/11 Reuters).
Tuesday last markets off slightly with oil up on…what else…Mid-East concerns and also as Japan released an additional 22 days of oil reserves to stricken areas. On commodities grain fell but cotton was up.
Aluminum is up 33% from the second quarter last year but copper is insane in its increase in price. Aluminum takes a lot of electricity for its production and Rio Tinto CEO Albanese does not see electric power getting cheap anytime soon nor anywhere in the world. Albanese think that scientists will find ways for aluminum to replace copper.
Ah, the worm turns….as the National Credit Union Administration or NCUA is threatening to sue Goldman Sachs, Bank of America, Merrill, Citi and JP Morgan Chase for misrepresenting the risk of bonds to wholesale credit unions. Those CUs sold the bonds to the retail credit unions with a loss of $50 billion in mortgage backed securities. It could be the lack of sophistication at the credit unions made them the perfect suckers for those products. Sellers knew this and exploited the issue.
Euro extends losses Wednesday last as Portugal rejects austerity plan and PM resigns.The pound also down slightly and the Yen relatively unchanged.
Copper trading into the stratosphere trading at all time highs even though rising inventories added to investors unease. Oil hits new high for the year but copper, which usually traded lockstep, is faltering.
Turmoil caused…well, everything was pretty much up last Wednesday as materials bolstered a pretty sour market into double numbers as gold and oil also gained.
Bestest smartest phone according to Walter Mossberg, who does that sort of investigative hard thinking for WSJ.com, is the Verizon ThunderBolt. The man literally gushes about the thing.
Ouch! Fed objects to Bank of America for a modest dividend increase. The reason is that BA is a definite laggard between the big four banks in capital. Experts say it is not the mortgage mess that got BA the kibosh but its unsecured credit card loans. The bank can resubmit its request for increasing dividend while investors are left to wonder what part of BA’s capital plan may have caused Fed discomfort.
The Flip Side from Barrons.com and in their recent ‘Barron’s Take’ is that BAC (ticker) is a buy and the recent selloff as an excellent opportunity to add or buy shares. Anthony Polini at Raymond James rates Bank of America a strong Buy with a $24 price target. Other experts disagree stating that $15 is the price the stock is range bound until the company gets rid of some of its problems or at least clarifies what its problems are to investors.
Add Syrian dissidents to the global turmoil and still the domestic markets did well posting over an 84 point gain on the Dow. Oil over 105 as Euro Pacific chief global manager Schiff blames the policies of inflation and higher oil on the Federal Reserve. (Yes, darling, you’re right!) Toyota will restart production on Monday following the lead of Nissan after shutting down since March 11th.
How much does the world depend on Japan for exports and imports?
According to Thomas Kosteigen’s Ethic Monitor in MarketWatch.com water is looked at as a policy issue rather than the scarce resource should be looked at as a business. (Excuse me, has Tommy ever seen the movie Chinatown and/or reviewed history on the building of the west by cattle barons and farmers? In some parts of the country the local water commissioner is more powerful than the governor.) Of course water is looked at as a business and a political tool in many parts of the country. It’s just not that well globally organized. For those interested there are Water Funds and ETFs. The list should grow as more become aware.
First Palin and now some say Bachmann as the darling of the Tea Party. Puleeeeze. Old toast seems smarter than Bachman while Palin is simply a no pretence opportunist. Has anyone heard of Lisa Murkowski?
Friday markets up 3 day Bull, just cranking upward. Libyan war and Japan nuclear possible Chernobyl-like meltdown concerns aside revised GDP gave continued momentum Dow up 50 with oil and gold off slightly. For the week IT, Materials and Energy led the gainers.
Who loves you, baby? Seems Invesco Van Kampen Kevin Holt likes both Concast and Citigroup.
All Hedge Fund Managers not omniscient. Take Philippe Jabre, one of Europe’s best known (not the richest or smartest note) hedge fund managers bought Japanese stocks on the earthquake news and then lost 13% as the Nikkei Stock Average tumbled. Philippe lost his nerve faster than Butch and Sundance being chased by the Pinkertons and sold for a $300 million loss before the markets bounced. (How do you say, ‘Oh, poop!’ in French?)
Jason Zweig reports in the WSJ’s Intelligent Investor that FINRA (The Financial Industry Regulatory Authority) which oversees the brokerage business looks to alter the maximum 5% broker charges. (To be fair many brokers discount far below the recommended full commission) For the record Yours Truly charges 1%.
Next Door Neighbor’s Government fails or falls and elections for new faces for the 4th time in 7 years. I went on line to understand how the Canadian’s government works and ended up confused. Seems the Queen is still the head of everything with the Governor General appointed under her who is more of a figure head and then the Prime Minister who is really the elected official who does the heavy lifting.
With radioactive threat in Japan it seems coal (we have jillions of tons of the stuff) has been a beneficiary of the upwards price. This will continue as I have been a big advocate of client’s owning energy in a diversified managed fund that contains oil, natural gas and coal.
Finally: FDIC closed a small bank in Illinois bringing the total for 2011 to 26.