That Was The Week That Was-4th Week May

• RSVP Gang of Six. The bi-partisan problem solvers on how the U.S. was to reduce debt and spending are fini, done, over and kaput. Tom Coburn of Oklahoma walked away saying they were getting nowhere and his colleagues were thinking too small. The game of chicken has officially begun! On August 8th, unless something is done, the United States officially losses the right to borrow and an economic Armageddon is possible, according to many economists. (The inmates have the keys to the asylum with little obvious understanding on the harm that they can do.)
• From the Department of Shame on You: The Disney Company applied for a trademark on the name SEAL Team 6, the elite Navy SEALs commandos.
• Entrepreneur Magazine founded by a bank thief. Now the company sues anyone who attempts to use the word Entrepreneur or any variation of the word in advertising or business.  This from BusinessWeek.
• The gamble – I’ve seen it happen at General Motors and K-Mart, people buying stock in a company that was in bankruptcy or bankrupt. Seems some hardened investors, according to Bloomberg's BusinessWeek, think there is some value in a company worth  nothing. Shares in the old Blockbuster have floated around from 4 cents to 23 cents with volume an astonishing 5.46 million shares a day.
• Nepotism is alive and well in Russian controlled state businesses. According to BusienssWeek: The Kremlin is packing board seats with the sons and close relatives of Putin allies making Russia an even bleaker place to do business in.
•  Monday last Dow sank 130 points while Nasdaq dropped 44. This is the 3rd week of losing since last August. It was due to Greece and fear of contagion that now Greece and down the road Spain, which has a much larger economy. We’ve been down this road before. The dollar, still king of currencies whenever a crisis, strengthened. Oil still under $100 and Gold up at the close. Still the trade of the day was the dollar. It was the simplest and most riskless way to make money.
• Interest rates may not get a hike as soon as some of us may think, according to a James Bullard, a top official at the Federal Reserve. My opinion has always been that The Ben Bernanke wants to keep rates as low as possible for as long as possible to eliminate the interest rate drain on new Treasuries.
• AIG considered by Morningstar a value at $37 and a buy at $18. The Re-IPO on Tuesday had a small gain as AIG and the U.S. Treasury sold $8.7 billion. The government gained $54 million on the leg of the first sale. The shares of AIG have fallen from their 2011 highs. Jimmy Cramer said he likes the company but wouldn’t be a buyer here. Shares continued to fall Wednesday.
• McDonald’s  upgrading 90% of U.S. stores. This upgrade, almost all borne by the franchise owner, will most certainly allow them to weather any future economic problems on the domestic front. Out of the 14,000 store some 6,000 will be upgraded over the next few years. Shares MCD trading at $82 with fair value given by Morningstar at $85.
• Remember when Krispy Kreme was the hot stock du jour? It’s alive and well as shares boosted by earnings. The problem is that shares do swing wildly in either direction depending on what the company declares. This time it was up 25% last Monday.
• WaMu, or Washington Mutual, Inc (WAMUQ) emerging from bankruptcy with shares trading under a nickel for the last several months up to 11 cents a share on huge volume.
• Even during Monday’s sell-off stalwart Apple held steady. You just gotta love this company. 
• The Greek crisis continues its saga Tuesday, acting as an anchor to markets as Europeans decide what to do. The problem also concerns other countries and the one currency they all bet their combined future on – the Euro. Greece cannot devalue its currency, limiting its options.
• Goldman Sachs readjusted (ahem) their forecast for commodities saying oil at $108, copper should be attractive opportunity at current prices. They did warn on corn to decrease and live cattle. We’ll be here all week…
• It’s been ugly and the summer hasn’t even begun. Mark Hulbert puts a smiley face on the current correction. He writes for MarketWatch that corporate insiders are more confident than worried. Just so you’d know…
• Bill Gross of PIMCO and bond king extraordinaire  and said that he was misunderstood when he was quoted as saying he sold all his U.S. Treasuries explaining he was ‘underweight’ Treasuries and not shorting them. He did say that…’at the end of QE2…what is clear is that a 1.79% yield 5-year offers a negative real yield after inflation.’  Yup, figured that out, too. Take the one, carry the two and divide by four…
• New Home sales rise. I’ve been hearing this. From the WSJ on May 25th this is interesting: New Home median prices in 2010 was $208,300 and in 2011 price $217,900. Sales, although up for the month to month, are down from last year. This may be the bottom.
• Citi fell below $40 Tuesday last but closed above the magic number of support. Oppenheimer analyst Chris Kotowski listed Citi as one of the bank stocks worth buying. He also recommended Goldman, JP Morgan, Morgan Stanley, U.S. Bankcorp and Wells.  Notice he didn’t mention Bank of America that has a huge problem with mortgages from their acquisition of  Countrywide and is killing the stock.
• Irish Banks unloaded some of their commercial real estate worth $1 billion to Wells and Blackstone Group. The banks and hedge fund paid between eighty to ninety cents a dollar for prime properties located in the United States. The WSJ article said the banks were under pressure to sell but how much pressure it did not say. The government and EU surely had a lot to do with the sale.
• Three day skid came to a halt as commodities, energy, materials and industrials became favs du jour on Wednesday. Weakness at IBM falling off $170 but Apple Up.  There is the Holiday Weekend and off to the Hamptons, or wherever for Wall Streeters as they desert NY for polo fields afar. Expect low volume starting Thursday and anything can happen.
• Oversold territory, said Keith Springer of Springer Financial Advisors. Defensive stocks fell on Wednesday – utilities, telecom and consumer staples.
• New ETF (exchange traded fund) specifically for the auto sector, coming soon.
• Thursday last markets edged up. The dollar fell as Asian investors sold the greenback and U.S. Treasuries popped to their lowest yield since last December. Prices of bonds react inversely to yield.
• Do you know what your pension is investing in?  More pensions are getting back to their early love fest with hedge funds as managers are struggling to find returns. Real estate is one sector hedge funds have done remarkably well with.
• Goldman Sachs, ah dear Goldman.The Street announced that Goldman’s Conviction List of stocks is not so for their own portfolio. In fact, the bank has sold exactly what they promoted. The stocks include Apple, Philip Morris, Qualcomm, Wells Fargo and Mylan,   among a few. At the race track this is called touting.
• Big disconnect between the very rich and the working class. Tiffany 1st Q earnings up 25% and the jeweler increase 2011 outlook. Oh, my.
• 4th Week down. Getting to be a habit as Dow off for the entire month of May. Up Friday last but longest losing streak since February 2010. Lay the blame on non-existent volume. Dollar fell against the dollar, oil over $100, gold up and personal incomes rose 0.04%.
• Wells Fargo announced they plan on growing into an insurance powerhouse buying agencies and companies to strengthen their casualty and project a Billion dollar life unit.
• Finally, Chrysler is paying off their double digit interest loans for several single digit. Expect huge hype as auto maker borrows about $9 billion and will repay the $7.5 billion to government. New loans expected to save the company $300 million a year in interest.

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

That Was The Week That Was-3rd Week May

• It’s always something. –If it ain’t one thing, it’s another. In the news: World markets shaken on Monday as Strauss-Kahn ex-head of the IMF was on his way to put finishing touches on Greek bailout before being tossed into the can by NY city police. The French think we’re barbarians the way we do the public perp walk. They also adore Jerry Lewis as a comedic genius. So there you have it…
• The week was one bit of bad news after another with the exception of the pop on share price IPO LinkedIn. Noah Weisberger, head of macro equity strategy at Goldman Sachs, is confident that the past three weeks are but a temporary speed bump and is bullish for the remainder of the year. He points to the relatively tame downturn in stocks versus other investments. 
• Tech & Consumer Discretionary sectors led stocks lower on Monday last. Jay Suskind, senior VP at Duncan-Williams said, ‘…we’ve seen over the last few weeks…a sedated economy. It’s less robust.’ That was the bad news the good news was that volume was light. Weakness in tech will continue if investors see an economic soft patch. Could be a long summer. Greek economic bailout concerns were in the background.
• According to the smart folks at CNBC Chinese businesspeople have been using copper as collateral for loans. Which may explain the run-up in the  price of the metal. It’s not the construction use but using it for cheaper loans that has run up the price.
• Fifth 3rd Bank upgraded to Buy from Hold by Sandler O’Neill analyst at R. Scott Siefers. Finally a bit of good news for the lower tier banks.
• Citi analyst Itay Michaeli thinks that Ford should command a premium as he increased the company stock to a Buy from hold. He slapped a price of $18 a share writing that an upgrade to investment grade appears likely late-2011 or early-2012. So far the stock has shown no inkling of breaking out.
• Google bellied up to the lending window and Monday sold its FIRST bonds. The cash rich company borrowed because the handwriting is on the wall that sooner before later borrowing costs will escalate. Google issued one-year, three-year and 10-year bonds for a total of $3 billion. Other tech companies that have issued bonds have been Dell, Cisco and IBM, according to Thomson Reuters. Someone certainly knows something…
• Not just tech but Investment Grade Companies are filling their tanks with cheap money before the Fed puts the kibosh on the party. Bond sales in May- so far- have totaled $56.7 billion.
• TiVo hooking up as it is distancing itself from Dish. New alliances with Charter and Comcast. According to BusinessWeek this is some serious development.
• How has the choo-choo business worked for Warren Buffett? Berkshire  Hathaway bought 77% of Burlington Northern Santa Fe for $26.5 billion. In the first 13 months Burlington has paid out $2.25 billion in dividends and another $1 billion is slated for May, 2011. Burlington is increasing capital spending by 31%, triple the increase of other major rails.
• Social Security, according to the Trustees, expects to run out of money by 2038.
• Markets mixed Tuesday. Watch IBM a former trader once told me. It’ll give you market direction. It was up almost a full point to close over $170.
• A tale of two tech companies. One (HP) fired their President and their stock went sledding  almost immediately. Dell CEO bought lots more shares in what some thought a dying company only to see shares pop with improved profits. Experts contend that HP can get cheaper.
• It’s true- It’s not what you know but who you know. Ask investors in LinkedIn, Twitter and Facebook. Ten years earlier rich folk couldn’t get a piece of a hot company before it went public. Today deals are cut where rich and connected investors are able to buy shares in hot tech companies before they go public. LinkedIn goes public and raises their price which only the founders and friends benefit. The S.E.C. is supposed to crack down on this little charade but given their history with Bernie Madoff affair it may be years. Watch for my blog on Private Company Stock Rules.
• David Weidner writes that this stock market is a shell game. He states that most investors believe we are in the early stages of an economic recovery and brushing off bad news like bed bugs. This year has seen a panic a minute and the rally continues. His fear is that traders and investors will go off their meds and see the market for what it is. He cites slumping global demand, a debt-ridden Europe, loan happy Chinese plus lousy domestic housing and job reports as prime examples of what ails us. Still profits keep piling up at major multi-national corporations.
• From The Department of Who’s Buying What But You’re Too Late To Tail-Gate: George Soros cut his gold and silver along with Bank of America and boosted his AT&T and Citi holdings. Carl Ichahn added Amgen (the biotech), Southern Union and Clorox. Warren Buffett sold more ConocoPhillips and bought MasterCard.  These be 3 of the brightest, richest investors in the world.
• Wednesday last stocks up while gold and oil down slightly.  Richard Bernstein, Wall Street veteran, his firm manages assets for institutions, chirped in with the following predictions:  Chinese stocks will underperform; Commodity prices will fall; Gold (I guess a different commodity for Bernstein) will also fall; U.S. Small caps will outperform whatever comes next; and finally Europe will exceed Investor Expectation.  (Thank you, we’ll be here all week!)
• Wheat futures on the Chicago Board of Trade jumped 17% due to wet weather in the U.S. and dryness in Western Europe. Consumers around the world will have economic issues with the pricing of wheat, especially folks in the Middle-East. Tunisians buy more than half what they need from other countries and consume more wheat than anyone else; up to 478 pounds per year per person. Yes, that’s over a pound a day of wheat!
• If anyone asks, and they haven’t, we haven’t seen anything like what’ll happen with the markets if and when the yahoos in Washington don’t get their act together.
• Story-time, dear reader. One one side you have the biggest U.S. Initial Public Offering of an Internet stock since Google (LinkedIn) and across the oceans another IPO for the ‘perhaps’ world’s largest commodity firm- Glencore International will begin trading on the London exchange.  LinkedIn has only made $15.4 million in 2010 but values itself at $4.25 Billion! Shares are pricing at $45 while Glencore is smartly keeping share price low to keep a loyal and supportive shareholder base for acquisitions and other expansion projects. Shares are being offered around $8.60 a share. Both stories unfold Thursday and go forward.
• Thursday the BIIIIG story was LinkedIn the Initial Public Offering as the stock posted bubble numbers. Asking price $45 and when shares opened on the NYSE they had been bid up to $83 and closed at $94.25, making a lot of people very rich indeed. Smart folk at Minyanville attest to the quality of the offering and say in 5 years LinkedIn will be a $25 billion dollar company. This is all the social media craze because Facebook and Twitter are the next private companies that will be going public. Everyone who missed Google wants a piece of what’s happening now.
• Jimmy Cramer in his Street Rant explained why he thinks LinkedIn is a bubble and said he’d be shorting the stock and recommends everyone to do so. Morningstar wrote that they think the current value of shares in LinkedIn is $27. and not a penny more; unless additional information is forthcoming.
• The International Energy Agency (I don’t know who they are either) said the world markets urgently need extra oil to prevent the huge price spikes we saw the first quarter of 2011. The reason they gave is that price increases in oil derail whatever economic recovery is going on. So far OPEC and others have been accommodating as the above chart shows. Jim Rogers on PBS radio Friday morning said that Oil will go higher. Expect bumps in the road but price increases are inevitable. Am I the only one that remembers oil around $75 a year earlier?
• Oh, my. Goldman Sachs is again in the bulls- eye as the Justice Department is reviewing data related to credit default swaps and fee arrangements, including anticompetitive practices. European regulators are nosing around, too. Plus the Commodities Futures Trading Commission’s staff has ‘orally advised’ that it attends to recommend… aiding and abetting, civil fraud and supervision related charges…against the trade-clearing unit at Goldman. The stock has been aimless with one analyst recommending sell.
• Tokyo Electric Power posted a $15 billion loss. Whispers suggesting the Japanese economy tossed back into recession.
• Markets finished up Thursday on good news from Am Express and the LinkedIn IPO. Gold up, oil also a smidge but closed under $100.
• Wha’s a matter with Bank of America? From a high of $40 to close a tad over $11 the major has serious issues. Since the beginning of 2011 BAC has been on a straight line downward spiral. We know the problem with Goldman is Goldman. We just can’t get a handle around the problems at BAC even though Morningstar reports its the mortgage losses there has to be more to the story. Doesn’t seem to be confidence in any of the financials.
• Friday Greece was downgraded by ratings firm Fitch (Big surprise, huh?). To give you an idea the Greek bonds maturing in 2012 are selling at a 25% discount. In other words, you can buy the bond and clip the interest coupon plus earn a hefty profit if Greece pays its bills in 2012. Chances are Greece will simply restructure- pushing maturities out- and you don’t want to be there for that.
• But…Fitch did report it expects the European Union and IMF to provide ‘substantial’ new money and there will be no ‘reprofiling’ of Greek debt. (Is there a gambler in the house?)
• News of Greece, which started the week, trickled down into our domestic markets and the Dow sold off and so did every index as oil closed $100 and gold up $16.50 on Friday.
• Looking at what happened elsewhere: Jobs increased for the second week in a row; revisionists were at work updating first quarter GDP numbers upward from 1.8% to 2.3% ( wow! and I mean that); manufacturing was down in great part because of an auto parts shortage from Japan; and housing was no peach as weak numbers came in and experts were expecting an increase in existing home sales.
• Fortune Brands sells venerated golf unit to Korea. Yes, dear duffer, the Korean’s known for their outstanding auto manufacturing (I am a huge fan of their cars.) now own, or will soon, Acushnet Company which makes FootJoy as well as Titleist. Fila Korea Ltd said they believe the brand will do well in emerging markets. The price $1.23 billion, which is about how many balls I lose in a normal season. (I keep that extra shift working!)
• This the beginning of the summer doldrums?  According to Mark Hulbert the Bulls may indeed be packing and getting ready to head for the exits.
• Finally, momentum, dear reader. It is all about momentum and ever since LinkedIn graduated to a public company with a huge valuation investors on both sides have spent more time than necessary arguing if the company is worth the current price, worth more or is a sell off in the cards. In the short-term even Jimmy (The Mouth) Cramer acquiesced and said ‘don’t fight short-term momentum’. The WSJ on Friday welcomed everyone in their LinkedIn essay to, ‘dot-com mania part two’.

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

 

Core Holding – And Stock Overlap

  Not that many years ago planners and brokers recommended to clients that they choose only one fund as their core mutual fund and then build satellite holdings around that core. The core would exemplify exactly what the client was attempting to do with their investment goal. If they were conservative and wanted preservation and income the core fund could have been a Bond Mutual Fund or Stable Value Fund. If the client desired growth the core fund could have been a world mutual fund or a large cap growth or value fund.

Morningstar, the analysis and reporting company, aided investors by noting which funds were appropriate for Core holdings and which were not.

Once the core fund question was established additional  mutual fund investments were added that either augmented or enhanced the client’s philosophy and goal. These funds could have been small cap, technology or mid-cap, among the dozens of offering.

Jack Bogle, of Vanguard fame, first suggested only holding two funds in any investment plan; one the S&P 500 index mutual fund and the other a long-term Bond Mutual Fund. Later, when the S&P 500 languished for an entire decade with little or no returns he revised his equity holding to the Total Stock Mutual Fund which held over 3,000 individual stocks in its portfolio.

A Core fund holding usually held a massive percentage of the total portfolio-sometimes as much as fifty percent.  Of course things have changed and investors today do not like putting all their eggs in one big basket and prefer to spread their assets among many different but similar funds. This creates another problem.

By buying funds and ETFs that have similar investment philosophies investors run into a problem called stock overlap. I’ve been noticing this even when examining my client’s holdings within one fund family. A mutual fund management firm will buy a trainload of XYZ stock at a cheap price and parse it out over several in-house funds. An investor who allocates between a world fund and a domestic growth fund, and using them as the Core, would expect the funds not to act in the same like-manner but are surprised when they do act almost in concert. The reason is that many of the largest holdings in each of the funds is overlapping because of the huge amount of stock the fund family bought and how it allocated that one stock to the various fund managers in the various funds they managed.

In order to minimize stock overlap investors need to move out from a single fund family and invest in altogether different mutual funds within their selected comfort range. There may still be a slight overlap because of the limited number of investment options but not as severe as that within one fund family.

A few years back it may have seemed silly to buy several funds from several different fund families with identical investment goals. It is for the same reason that Bogle gave up on his S&P-500 Index forever mantra and switched to the Total Stock Fund. Investors get a wider and broader allocation with minimal stock overlap.

Core investing has gotten a facelift. Today’s investor is perfectly fine with buying large cap value, growth or blended funds from several mutual fund families and integrating them as their Core. From that beginning they can add as many sectors as they desire to complete their plan. The goal, after all, is to minimize losses, reduce volatility and increase total return. By minimizing overlap investors can get reduce much of the portfolio ups and downs and get better diversity.

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

 

 

That Was The Week That Was-2nd Week May

• Jobs are what it’s all about. According to the WSJ Sunday before last companies cranked up hiring April to the fastest pace in five years. Don’t get excited there are 13.7 million Americans still out of work and another 8.6 million who wanted to work full time but could only find part-time jobs. Get the jobs picture rolling brighter housing will follow.  Speaking of which…
• Housing suffered another drop as median U.S. home values fell another 3% from the previous quarter. This the largest decline since 2008.
• Dow 16,000?! According to technical analyst Gene Peroni Jr. at 16,000 the Dow would represent a 27% gain from last week’s close. ‘There is still a reluctance,’ he said, ‘on the part of sideline investors.’ Peroni’s current outlook calls for continued strength from what he calls THEM stocks, an acronym for technology, health care, energy and manufacturing.’ I like the way this guy rolls. I also like tech, energy and manufacturing.
• AIG, the insurance monster, that was propped up by the government in order to pay all the claims for Goldman, Bank of America, JP Morgan and others for the ill managed mortgage mess is about to sell the U.S. shares. The government owns 92% of the company and needs $28.73 a share to break-even on their investment. The problem is gauging price. Morningstar like fair value at $38. a share  but others place share price closer to $23.00 a share. However experts contend that even if the government walks away with $22 a share they’ll be okay since there was profit on the residential mortgage-backed paper it acquired on AIG’s behalf at the beginning of the crisis. (AIG tickled $50 a share earlier this year before falling to current levels.)
• Citi completed reverse stock split and shares opened over $40.00 a share on Monday last and closed down. Jimmy Cramer wrote shares need to get rid of investors who bought for the split before gaining any altitude.
• Split Cisco into Threes – according to the smart folk at Morgan Stanley. Ehud Gelblum believes by dividing the company into threes hidden value may be uncovered up to 40% more than current share price. Cisco disagrees and states it cannot manage three separate ‘disparate’ businesses.  Lots of shorts on the stock.
• Buy Treasuries? The end of QE2 (coming this June) may actually boost bonds and not kill them.  Bond prices move inversely to rates. While fine folk at PIMCO sold their Treasuries the other folk at BlackRock bought more Treasuries anticipating exactly such a scenario. In other words BlackRock believes bond rates will fall while Pimco’s bet was that they would rise. More from the fine folk at Pimco later…
• Commodity price collapse last week attributed to computer sell programs. Oil rarely falls $10.00 a barrel in a single trading day and momentum built until everyone sold to get out of the way. Hope this explains…but it still hurt…
• World financial markets got a wake up call to the strength of the U.S. and its financial institutions. The dollar grew stronger immediately after the death of bin Laden. It was a reminder that the U.S. is still the strongest country militarily and financially. No other country comes close. The U.S is the world’s largest holder of gold in the world with Germany number two and China number three. In addition the U.S. has eleven aircraft carriers that are able to sail and strike anywhere in the world. China will float her first and only sometime this year. Hope this makes you feel better…
• Bounce on  Monday as commodities came back, oil closed over $100; gold and silver tacked on gains.
• David Weidner got testy with the Oracle of Omaha, Warren Buffett, writing that Buffett doesn’t get overly worked up over Berkshire quarterly earnings unless they’re good. (Meow) With claws extended Davey went for the jugular reported that Buffett keeps explaining his losses away by stating, ‘ …each security will grow to their intrinsic value…’; which Weidner writes is the value of a security that is only in Buffett’s brain and nowhere else…( tuna anyone?).
• You can almost imagine Homer spinning in his grave as ratings company Standard and Poor’s cut Greek ratings from BB- to B. The European debt crisis has returned like musical chairs at a kid’s party. Political pressure in Germany and other frugal northern European countries putting the kibosh on any additional aid. This is getting serious with little wiggle room. Greece may not be able to work any deals and  default unless EU raises more cash.  Add in the arrest this past weekend of the head of the IMF for allegedly accosting a hotel maid and this coming week can see more turmoil and uncertainty.
• PIMCO has more than $1 trillion in assets. In April Bill Gross increased short bets on U.S. debt. So far the markets have moved against him. Treasuries have increased .3% on the strength of the economy and the elimination of bin Laden.
• Despite a commodity correction 10 days earlier the charts show no relief for oil and especially gasoline. According to Getting Technical writer Michael Kahn investors can expect more upside. Technically Kahn explains, ‘…crude remains above its trend line. It also remains well above its November breakout level of 87…the excess were wrung out, but the bull market was left intact.’
• Alan K. Simpson, ex-senator from Wyoming and former Cranbrook graduate (Bloomfield Hills, Michigan), lawyer and all around Speaks- Before- He- Thinks kinda guy said Social Security was a Ponzi scheme and not meant to be a retirement plan. (AARP execs immediately got their shorts in a bunch even though ‘technically’  Simpson was right.)
• Tuesday markets closed up. Green all the way except for oil down a bit to close $103.50. If you’re counting four straight days of positives.
• Michelle Girard & Omair Sharif, economists at RBS Securities believe that while the Fed is in no hurry to raise rates in a few months they better start thinking seriously about the inflation picture. Girard and Sharif were winners of the MarketWatch Forecaster of the Month in April, beating out 42 other forecasting teams.
• Ouch. Gasoline lead  markets lower as  margin increases roiled investors into liquidity last Wednesday. The selloff wasn’t wide spread. Retail, especially Macy’s, did exceptionally well. Up 10% for the day. Apple also hung in plus positive news for J&J. Oil closed under $100. Gold and silver also found themselves lower.
• Dead Cat Bounce? This is where a stock jumps up, sucks in investors, and then continues its death spiral. Was it a bounce on Tuesday? It may have been for metals but not the economy according to David Callaway in MarketWatch.com. Professional investors still expect a continued economic recovery. The other side of the coin belongs to those that believe the second leg of the recession is going to be lead by more bank failures and derivative losses.
• Thursday markets started off lower but ended the session substantially up as oil settles around $100 even as Congress grilled oil executives in a bid to rid the industry of tax benefits. 
• Removing the Punch Bowl? According to Randall W. Forsyth last week’s turmoil could be a precursor to the Fed ending the QE2. Commodities may have temporarily ended their run. Mr. Copper has given up fifty cents a pound in April. Traders move to more defensive stocks, retail and pharma.
• Oil Company Tax Hike? Puleeze….either Congress thinks we’re dumber than we are or they’re dumber than we know they are. Watch commodity roller-coaster which identically matches last 2010 template.
• What did I tell you about silver last week?
• The 10-Year Treasury found itself attractive to investors (again!)  as yields fell almost 35 basis points to 3.15%, about where it was a year earlier. This was the lowest yields have been in 2011.  This flight to safety was acerbated by the Greece crisis, the U.S. debt ceiling, strengthening dollar, commodity price reversal and the upcoming end of QE2.
• GM’s stock price lags analyst’s expectations.
• Kirk Ludtke of CRT Capital Group has a $42 =12 month target. Ludtke said GM is the No. 1 player in the two regions that will account for half the world’s unit growth over the next five years: North America and China. 
• Friday the 13th usually bodes well both for stocks and Treasuries. Looking back at the past 10-years the 13th was up 65% of the time. It didn’t this last week.
• German growth accelerated.
•  Japanese banks lose ground as fear grows they may have to take a ‘haircut’ on billions of dollars in loans made to Tokyo Electric Power Company which disclosed three damaged cores at their reactors damaged by the earthquake and tsunami.
• Hedge fund conference in Las Vegas brought some interesting ideas last week.  Cooperman at Omega likes General Motors, which is sitting on a pile of cash and could return significant amounts to shareholders. Daniel Loeb of Third Point, LLC, is excited (?) about Delphi and suggested it could reach the high 20s.  Steven Tananbaum who runs GoldenTree Asset Management said in the past he has bet against Treasuries but currently he is ‘flat’ but may put the trade on soon.
• Finally- Jeff Reeves at MarketWatch names the three worst stocks in the Dow here to date. Here they are with no silly comments: Microsoft, Bank of America and Cisco.

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