That Was The Week That Was-4th Week June

• Seven weeks out of the past eight its been losing sessions for the Bulls. You’d think we’d get a break but last week it was all about Greece and then manipulating oil prices and back to Greece again. Italian bank bad news snuck in on Friday…  so here is the play by play…
• Monday last started off slow but ended with all indices up, including oil but not gold. All it took was a whiff of a possible solution to the Greek crisis and it gave the markets confidence to move forward.
• Death Cross?  For chart watchers –the technical support number, according to Douglas Fabian, for the S&P 500 index is 1,259. The good news is that the market refuses to fall below its 200 day moving average. However, the day that the markets fall below their 50 day moving average and if  that number also falls below the 200 day moving average, that cross pattern is considered a Death Cross and bad things happen. The 50 day moving average is currently (as of last Monday) 1,322.
• The argument persists if we’re heading into a double dip, are we in another recession and just don’t know it or is this simply a normal market adjustment.
• Fed-Ex predicts Rosy forecast Wednesday morning before the bell.
• Jimmy ‘The Mouth’ Cramer sounded like heading for the Fall-Out shelter Monday as he derided the domestic market, the politics and the global markets. In a Street Only interview he said he didn’t like any of the charts and suggested safe havens for clients such as Clorox, Coke and Proctor and Gamble. I don’t get this guy. On his show Monday a caller asked what Cramer thought of owning Ford and Cramer answered, ‘… no matter how much I like a company if the CEO lies to me… then he had…well…you know what I think.’ (Can anyone tell me what’s with this guy?) It was that strange with no answer to the question. Did Ford CEO Mulally lie to Cramer?
• Those that believe we’re in deep do-do include MarketWatch writer Douglas McIntyre who reports that the double dip recession has begun and gives the following reasons: U.S. Debt, Housing (always Housing), Unemployment (even CBS new got in the act showing graphics on Monday’s broadcast and stating it would be two more years before unemployment fell to 8%); and the China slowdown.
• On the Flip Side Jeff Reeves, writes why stocks will come storming back: Companies are flush with cash; Treasury rates stink (but still investors are climbing into that rowboat); Big dividends in stocks; Bargain valuations for stocks (but nothing spells trouble like saying a stock is a bargain and cannot fall further and it does); IPO boom (you gotta give him that); Steep market declines signal a buying opportunity; Floods, tornados and tsunamis are not permanent and finally the U.S. and the world economies are still growing. Go ahead, hang your cappy on anything you feel comfortable with.
• From The Department of So Much Confusion: Molycorp’s (the rare earth company) CEO dumped another $8.9 million onto the market, the third such sale. Share down from $79.16 in May to $52.80 Monday last. Still Piper Jaffray analyst Michael Cox upgraded shares to Overweight.
• China’s inflation heads to the USA. A lot of imports are coming in with higher price tags. The WSJ reported that most economists thought the U.S. should import less and export more. (honest- it wrote that!)
• Banker CEO’s won’t go to jail even though some should. The Fed suing JP Morgan and Royal Bank of Scotland for duping (the Fed’s words) credit unions into buying more than $3 billion mortgage bonds that went south and was the chief cause of some 40 credit unions to fail. Credit Unions never pretend to have the most sophisticated people on board to direct their investments. The stuff they bought was all labeled AA or better, according to WSJ and other sources. So why aren’t the ratings firms being sued, too? I ask nicely.
• JP Morgan settles $153.6 million in a mortgage bond deal that was crafted by JP, sold by JP and known to fail before it was sold to investors by JP. And JP profited!
• The Greece crisis averted…for a bit. With a midnight Greek government confidence vote- needed in order to get money from EU –demonstrators huddled outside the offices last Tuesday. This was the first step in another austerity plan. Next will be more cuts to social welfare programs and even higher taxes. Greece plans on selling pieces of itself off to foreign bidders to pay off its debt. China stands in the wings with checkbook in hand.
• So, I asked myself, how did Greece get in such a mess? Then I remembered ages ago an acquaintance who day-dreamed of moving to Italy because everyone got to retire at the age of 50. The same happened to be true of Greece. The problem has been too many social state programs, too much spending and not enough money to continue to make Utopia happen.
• Greeks riot just the same as we will when our government eventually awakens and cuts social security and Medicare. You wait, you betchum.
• According to authors Reinhart and Rogoff in their book, ‘This Time Is Different- Eight Centuries of Financial Folly’  - Ever since 1832 Greece has spent half its time in various stages of default with debt obligations. At one point in the mid-19th century- Greece was in default for 53 straight years!
• Why not apply Latin American rules to the Greek problem and re-write all the old unaffordable debt and rewrite it for new more affordable debt? On the present course of action its only time before Greece finally default. See the last word on this…
• The largest Hedge Funds just got bigger by $10 billion. Bridgewater posted a positive return in 2008. It continues to be a moderately conservative fund in a land of gun-slingers. The hedge fund industry has had its assets pass the $2 trillion mark.
• Stocks moved up on the anticipation of the Greek vote Tuesday in a stacked deck with over half the government members of the same party. Like Sara Palin would tweet. this is exactly how traders like to roll –knowing the odds were in their favor and the markets were all up in a broad based rally. The game of global chicken continues with the stronger members of the EU supporting the weaker until concessions are granted and eventually the country ends up selling everything they own to pay their bills. (This will include utilities, transportation, parks, ports, airports and anything of value.) Greece is a tourist town and not a strategic trading partner with anyone. What happens to Greece is being watched closely by other weak EU members like Italy, Spain, Portugal and Ireland.
• Earning season next on tap here at home. The S&P 500 trades at 12xs 2012 forecasts and either is cheap or can go down a lot from here. Woody Dorsey, proprietor of Market Semiotics, predicted a short-term bottom around June 21-July1st and a short-term recovery high around July 18-22nd.
• Morningstar likes Apple a whole lot – fifty percent more lot.
• Greek politicians waffling- afraid of being voted out of office or doing the right thing Wednesday as U.S. futures lower before the open. Just wait until some gutsy U.S. politician starts the campaign to fix entitlement programs SSA and Medicare. The howling from those who would be close to getting benefits will make the Greek revolt seem minor. A mere piffle…
• The Ben Bernanke spoke (‘No Mas’) and markets fell Wednesday last. Depending on the frequency setting of your hearing-aide the speech by the Fed Chairman was either sobering or a rationalization that the Fed has done what its done and cannot do more. (He didn’t say a thing we didn’t know before.) Rates will stand where they are at almost zero and the rest is for the markets and the economy to heal itself. The John Maynard Keynes prescription of printing money and creating massive deficits to shake the economies loose from depression have so far not been 100% successful. The Ben Bernanke glumly offered up:
• Cheap money is a necessary but not sufficient solution to the debt-deflation problem.
• Fed forecast for 2011 revised 2.7%-2.9% down from the 3%-3.3%.
• 2012 unemployment revised to decline 7.8% – 8.2%.
• Inflation revised for 2011 to 2.3-2.5% from 2.1-2.8%.
• Coke is mixing it up with Goldman Sachs. Coke is accusing GS of limiting the amount of aluminum (needed for bottling of Coca-Cola product) leaving the GS warehouses and thereby artificially hiking prices. Goldman has a huge aluminum stockpile, including a warehouse facility in Detroit. Stockpiling has become an efficient method of artificially creating price hikes but GS has just messed with one of America’s largest companies and biggest users of aluminum and may have met its match. Expect action in the metal soon.
• From the School of Jethro Bodine Economic Study the U.S. and others have decided to clamp jumper cables onto the ‘oil bidness’ and release strategic oil stockpiles. The idea is to flood the market and to reduce the price of crude and therefore gasoline and jump start the economy. Traders, caught by surprise, saw crude fall to under $90 but ended the day up over $91 on Thursday. This deep thinking has the rational of supposedly make traders nervous about making big bets on oil rising and keep the ‘fools’ from pushing the price up.  There is only so much strategic resources a country can use up before it becomes imprudent and traders will pounce on the first sign of weakness driving prices higher. It’ll be such an ‘in-your-face’ hammer to drive home a lesson not to try and manipulate the markets….you wait…a costly investment.
• A 1% increase in the 10-year Treasury will result in a loss of 8.22% of the bond’s value. Recent noise by some Fed official(s) to begin raising rates but Bernanke is firm in holding off both for political and debt repayment reasons.
• Thursday markets off 112 by noon with gold off $33 and the Naz showing a slight gain. Markets came back a bunch closed at off 60 and gold off a tad. Banks hit. IBM up.
• The Street reported how some of the brightest hedge fund managers have lost Biiiiig Time betting on China small caps. The idea some of us ‘regular’ folk think of following these ‘smart’ money people, who have surely done their homework, with our money is flawed.  According to the Street the list of geniuses who have been suckered in includes: John Paulson, Hank Greenberg (of AIG fame), Wellington Management (same folk who manage some Vanguard stuff), David Rubenstein of Carlyle, one of the largest equity firms and our old friends at Goldman Sachs. The cause of most losses has been lies and forged documents.
• Shortly after Goldman Sachs sent a letter to clients to short the Chinese Yuan the Premier of China announced that the country has inflation under control.
• Morningstar- buy Ford $14, fair value $24, sell $40.
• How goes the second half? According to Mark Hulbert and his research: When the Dow falls in the first half the Dow rises in the second half  60.6%; when the Dow rises in the first half the Dow rises 71% of the time and these numbers are true 66.7% of the time since 1896.
• I keep hearing whispers on bio-tech. Jimmy ‘The Mouth’ wrote about watching Dendreon (DNDN) and Barrons does a piece Saturday on Gilead Sciences.
• Italian bank shares swooned and trading cut short when regulators were not confirming that a stress test in July would not be successful.  News was not helpful Friday and contributed to the ‘I-don’t- know-what-the-hell-is-happening’ method of investing. Naturally stocks fell here.
• Week ended with Gold down on Friday – metals having a torturous time. Oil inched up over $91- almost daring the release from SPR. And no word from Washington on making a deal to keep country running and increase debt.
• Individual stock strategists- those that concentrate on an individual company or industry are especially optimistic, according to WSJ June 27th edition, on corporate earnings for the current quarter. Earnings have underpinned the stock market’s rise from its 2009 depths and is especially important now. This in the face of economists who are much more fearful. Matthew Lloyd, chief investment strategist at Advisors Asset Management, says he values the focus of stock analysts on the fortunes of individual companies over strategists and economists.
• Finally – in a not so widely publicized interview in The Weekend Australian- Jamie Dimon, CEO of JP Morgan was struck by the gloomy similarity between the Aussies and the U.S.  He said Greece would not default on its debt but if it did it would be survivable. Other countries have defaulted including Russia, Argentina and Mexico and the world has survived. The U.S. has deep capital markets, innovation, capital expenditure and one of the mighty economies in the globe. So sayeth the Dimon.
• China has stepped up its commitment to the EU and Euro as it has reduced its holding of U.S. debt and, according to Sunday’s WSJ, increased its EU bond holdings. The Chinese have foreign exchange reserves of more than $3 trillion and has said that it is willing to ‘seize the opportunity to support the quickest possible recovery of the global economy and stabilize growth’.
• The Very Last Word – From Morningstar and senior analysts Pina and Davis interviewed on Friday by  Jeremy Glaser who reported, ‘Its not a question of if Greece will defaults but when. It could be two or three years down the road.      ‘Banks are simply buying time as debt holders will eventually tire of extending the debt. The question is what and who gets hurt the worst.’ Which explains all the stress testing in Europe and the U.S. and the recent addition of higher cap reserves for certain banks. It also explains why bank stocks are not performing and traders are looking at regional banks and not the majors.

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

Estate Planning – Thoughts

Contrary to what the insurance companies would have you believe insurance agents are not estate planners. They provide life insurance products that assist in the completion of the estate planning process. Lawyers are the professionals that you should see to complete an estate plan which, in some cases, would also involve your accountants and insurance and investment professional.

Estate planning is simply a method of facilitating who gets what when you die and who manages what for your benefit while you are living. It also provides instruction if and when you are unable to speak for yourself and who you want to speak for you. You can also name someone other than a family member to manage your money if you are unable to do so for yourself. Most people think of a bank as custodian.

While some think that tax reduction is a primary aim of estate planning- it isn’t. True, there are methods and means of reducing estate tax legitimately but estate planning solely for tax reduction is not the main purpose. Estate planning is to provide an orderly method of disposing of all the stuff we’ve accumulated in our lifetime. If, for example, you own a Mercedes and a Dodge pickup you want the right people to get the right vehicle without creating a fuss. If you simple say give my cars to Joe and Pete there could be a disagreement stemming from who gets what.

Estate planning shouldn’t be considered only as something people do in contemplation of death. Estate planning should also be considered as a living benefit. It is an important element for those people that may live for a very long time but are disabled through sickness or accident. They could have a stroke, develop Alzheimer's or be paralyzed and those charged with caring for them need instructions on what to do for them and how to do it. There are greater odds of this happening in the middle life years than death.

Estate planning also isn’t something just the elderly do. Making a will, deciding who should be guardians of underage children and making sure that there is enough insurance, cash or liquidity to take care of necessary living expenses for spouse and children is a responsibility for those married and with children under the age of majority.

In the early years of marriage often there is no money or assets to leave. The answer in that situation a substantial term life insurance policy can be all the estate planning one would need. Add a will that provides instruction for guardianship and instructions on who should administer the funds for expenses and seemingly complicated estate plan gets boiled down to basics.

An estate plan is not something you do once and put on a shelf. It is, to be effective, something revisited and brought up to date every few years to reflect lifestyle and wealth changes.

To get an estate planning checklist call your lawyer or if you need a referral call me and I’ll be pleased to provide the names of a qualified professional in your neck of the woods.

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 June

•  Marketwatch.com reported that when the cost of a home becomes less than renting investors will step in to stop the value slide of real estate. Investors, it seems, are starting to snap up  properties. When an investor moves into your neighborhood this bodes well for future values. The top 10 best markets for home investors: Indianapolis, Winchester, W. Va.; Gainsville; Tucson; Tallahassee; Haggerstown-Martinsburg, MD; Salt Lake City; Richmond, VA; Gainsville; Winston-Salem.
• According to ‘Mystery Broker’ quoted in Barrons.com thinks, ‘ U.S. economy slowed more by tragedy in Japan than most investor realize, that GDP could return to 3% in second half. The housing market is at or near bottom, the dollar should enter a cyclical upturn and no country outside of Greece will default, though Portugal may have to restructure debt.’ However, the markets will remain in this trading range for some time before moving on.
• Markets opened higher last Monday but the air was taken out quickly as markets shrugged off optimism and ended mixed with the Dow up a single point. Insiders quit their selling, or at least held off for a day, reported The Street. M&A (merger and acquisitions) picked up steam with money cheap (Zero!) with VF Corp buying Timberland and Arby’s was cut-loose from Wendy’s Arby’s Group and rumors for recent IPO Glencore bidding for Eurasian Natural Resources was reported as being false.
• Ford lost a $2 billion lawsuit brought by dealers alleging that the company overcharged dealers for trucks. The stock got kicked even though Ford defended itself by stating that they would appeal. Analysts also rushed to the company’s  defense and reaffirming ratings (price $18 plus) and stating even if company lost the decision it would take years and raised 2012 EPS to $2.19.  Word from WSJ is that Ford spending $1 billion to upgrade Lincoln into a world class luxury brand. Some Lincoln dealers will go by the wayside.
• From the Department of Feeble Picking: The Finnish phone maker  Nokia, one year back, was praised as the stock comeback kid.  Today MarketWatch asks, ‘Who’s in worse shape- Nokia or Research in Motion?’ RIM, the maker of Blackberry, has lost 20% recently and is at levels not seen since 2006. One host on Friday’s CNBC was quoted as saying he was buying shares in the company, although he appeared a bit green at the gills.
• Public Radio (gasp) got on the bash Obama bandwagon Monday morning. Commentary blamed the Prez’s Health plan for companies not hiring, not knowing costs and spending money on equipment more than investing in new hires. Just thought you’d like to know…
• Kate Kelly with CNBC reported that Facebook IPO would be valued at $100 million….opps…BILLION!
• China has an inflationary problem (WSJ) and their dealing with it by tightening money. China funds, hedge funds, mutual funds and private equity firms have all gotten smacked around. Investors have been faced with fraud in the past and only solid due diligence aids in keeping it to a minimum. With Chinese company valuations low many professional traders are simply hanging on and waiting for the pain to pass.
• China’s slow growth tightening will allow oil to fall. China’s middle class now earns 69% of the U.S. wage earner and looks to other countries for cheaper labor. The U.S. is now one of those countries that China uses for a cheap labor force.
• Banks-yes, banks lead gains Monday. Sell still on Goldman Sachs, even though investors now believe government got their information wrong.
• Time Magazine purports to know the reason why we’re dragging out this Depression in the June 20th issue Time reports that American business in the first quarter of 2011 earned almost $2 trillion in profits. Still not many CEOs would think of building a factory or R&D center in the U.S.A. Their first thought would be China, Brazil or India. These countries are churning out  70 million new middle class workers and customers every year. That’s why the U.S. worker is stagnate and you won’t see the employment or wage numbers change much over the next five years. Which is confusing when you read the Bloomberg China story exporting its cheap labor work to the U.S.A.
• Germany, when the two Germanys united, offered subsidies to forestall outsourcing. This could work here. Plus German goods are not cheap but provide quality and good wages for German workers.
• Am I the only one fed up with Washington? Playing politics until the last minute to raise the debt limit and blaming it on us –   At the same time the President isn’t being effective.
• Michelle Bachmann is officially running for President. The noise you hear is Washington, Adams and Jefferson rolling in their graves. Friends say she is the ‘smart one’.
• Tuesday markets opened higher and stayed there. A solid triple digit day with gold and oil down. Gives one hope until you read that there isn’t enough bearish consensus to support a contrarian Bull market and that, according to Mark Hulbert, the Bull may have indeed died May 3rd of this year.
• Retail sales were down but not down enough to make the markets collapse. In other words it was bad news on the retail side but not as bad as some investors expected. Expect, economists said, for clothing and other items to cost more this fall. Inflation in the cards. Still other reports show the consumer spending….read on, dear reader.
• Wishing to make it so -If Fed Fund rates are kept at nothing and inflation contained and global worries kept to a minimum the domestic stock market should do well. And that is if our politicians okay a higher debt ceiling, put together a reasonable budget and work together like adults forgetting party affiliations. Oh, okay, lemme see that Bachmann for President brochure…
• The jobless rate turns out lower or flat in Most states. Michigan not one of them- still double digit. According to Labor Department joblessness declined in nearly half of all U.S. states last month.
• The Wise Ones recommend not to invest in any of the transportation companies. Transport stocks are having engine trouble. Not only the autos but airlines, too. Railroads are on a tear. Maybe its why Buffett bought his own train set but lost a small fortune or at least half of it on U.S. Air, including common and preferred.
• Buy rating on Japan as it starts coming out of its slump.The Bank of Japan upgraded its assessment of the Japanese economy for the first time in three months. Even Toyota Motors announced it would reach 90% of capacity in June.
• Big Puff Piece on Single Premium Immediate Annuities –puleeeze- you buy when interest rates are high.
• The American Consumer is alive and well and spending on average at a 3% growth the last five months. According to Morningstar, some months less some months more. It all averages out in the end.
• A rough patch- Not a Double Dip-definately not replay of 2008 – repurchasing by corporations as they spend the cash hoard – if they thought they’d be caught they wouldn’t be spending what they got. Stock Buy-backs are running at record levels. Bob Johnson, director of economic analysis at Morningstar said, ‘Soft patch, yes; double dip- absolutely not.’
• The week ended with the Dow and S&P 500 indices up for the first time in six week. The Naz was down.

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

That Was The Week That Was- 2nd Week June

•  We had summer for two days last week and now back to normal.
•  Where should investors invest right now? According to Greg Zuckerman, who writes for the WSJ, investors should have taken profits from growth companies while shifting into safer companies, especially those with foreign market exposure.  James Paulson, chief investment strategist at Wells Capital Management, recommends emerging market stocks and tech. He notes technology companies sitting on piles of cash. Kenneth Hackel, president of CT Capital is a fan of Google. Some experts now agree that the Fed rate hikes may not come before March 2012. Paulson’s hedge fund lost 6% in May primarily due to his holdings in Citi and Bank of America.
• What we can expect this week: Wednesday the May CPI numbers will come out along with manufacturing in the New York area. Thursday brings housing starts and new permits. Friday will bring consumer sentiment numbers.  You can bet those and all numbers this week will be scrutinized like they came from a crime scene.
• Up and Down Wall Street essayist Randall W. Forsyth reports that the housing market will continue to decline even though it has reached the economies of the year 2000. So far home prices have effectively unwound the entire credit boom gains. Compared to equities, silver and gold houses are fantastically cheap. Buyers can make some sweet deals. However there is such a huge glut on the market that it will still take years to clear the inventory. The question is what will clear out all the empty homes on the market? The answer Forsyth gives is neglect and rot. Mother Nature herself will provide enough deterioration that cities will eventually bulldoze and destroy them.
• Poor growth translates into turning the U.S. into a Greek tragedy. Economists once excited about the U.S. turning the corner now sourly wish they’d kept their mouth’s shut.  The U.S. would do rather well, explains Rana Foroohar, in her Curious Capitalist column, if the economy grows over 3% a year. Growth under 2% creates a nightmare debt increasing to 144% of GDP over the next 10 years. Growth at 3.9% creates reduction in debt and no major overhaul of our entitlement programs. it’s all about jobs…
• Food prices on basic staples may rise 120% to 180% by 2030. This includes paddy rice, wheat, maize and processed rice. This from the London based charity Oxfam.
• George Soros- billionaire crackpot leftist- sold $800 million of gold in the first quarter. He thought he timed the sale at the top of the bubble but Matthew Lyons writing for London Eye reported he got it wrong and the bubble is at least a year away. The blow-out phase, we saw it with silver- where it suddenly spikes through the roof- just isn’t there yet.
• Selling Medicare reform to old poops is tough when old poops have their fingers in their ears and refuse to listen to change. Republicans did a survey and found 33% of those 65+ support change, 27% oppose and 40% don’t know. One GOP Hill insider said what the GOP needs is a salesman like Betty White or Andy Griffith. While change, if it happened, wouldn’t impact those that are currently 65+, the poopsters carry a lot of political weight.
• Weiner and stupid gets its own reward…. anyone remember Teddy Kennedy?
• Steve Jobs shows up to announce new cloud music service and Apple stock falls 1.6% on his appearance of losing more weight.  Jobs has been ill, taken a leave of absence, and rumors are that this is not something he will recover from.
• Quick…who owns Volvo? Ford? No. Sweden? No. Why its Geely Holding Group of China. Get ready for new more luxurious Volvos as Chinese owner Li Shufu states that he plans on going head to head against other luxury brands because that’s what the rich Chinese buyer wants.
• Stocks continue their fall last Monday. Even Jimmy (The Mouth) Cramer has had enough and ranted against the President, coming within a syllable of calling him inept and a socialist brigand. Please understand, dear reader, Jimmy C is right only about half the time…
• According to news published Barrons.com hedge funds lost on average 1% in May and are continuing to buy Gold and Silver. (2) Emerging Market Funds see Inflows Return (good news for emerging market investors) (3) Citi cuts Legg Mason (see last week’s blog) (4) FaithShares to close 4 ETFs and plan on keeping only Christian Value open. (I wrote and laughed about this idiocy a year earlier) (5) Silver has fallen some 25% since April. Andrew Horowitz suggests that investors wait until Silver breaks above $40.25 an ounce before reentering. (remember this is a trade!)
• Starbucks is upgraded   to Outperform from Market Perform by BMO Capital.
• Analysts are bullish on copper. The iPath DJ-UBS Copper ETN is up only 0.3% (contrary to those who have been falling down about the high cost of the metal).
• Another bet on the dollar strengthening by Mark Arbeter who thinks an upside of 12% in the dollar and a drop of 45% from current levels on silver.
• Ford said that they expect to increase sales by 50% by 2015. This means increasing from almost nothing sales in China and India. Ford stock barely budged on the news as the company also reduced more debt.
• Commercial real estate office owners rush to sell their buildings before the corporate market softens. Lenders, so far have been accommodating, but now with what is considered fair value some owners are now putting their properties up for sale. Seems banks and lenders will still provide financing at exceptionally low rates.  

• Stealing by a broker from a client usually is a man’s game. But according to Financial Advisor magazine a former Wachovia female broker swiped $14 million from clients and used the money to support a lavish life style including a helicopter and two zebras. Customers should always double check and confirm purchases. One zebra would’ve been enough, you’d think?
• PBS Radio reports Congress shocked at billions in United States Afgan aid misspent. Really? No, really!?
• High gas prices have caused the economy to stumble, according to The Ben Bernanke, in his speech Tuesday. Forgetting to mention that his QE2 was all about lowering the value of the dollar, keeping interest rates low while buying Treasuries. Oil, as you know, is traded in dollars…. This the head of the Federal Reserve. There are days you just wish you hadn’t gotten out of bed…
• Laugh of the Year – Jamie Dimon, CEO of JP Morgan Chase, told the Fed Chairman that he (Dimon) fears that new banking regulations and oversight are harming the banking industry and economy. Like all of a sudden we got amnesia about banks involvement in the mortgage mess, the depression, jobs, et al. Bernanke and Dimon the new Martin and Lewis.
• The Ben Bernanke really knows how to put a stinker into a party punchbowl. The rally the other day to break a five week losing streak was just getting going when he-The Bernanke-opened his mouth.  Fear increased and any momentum was lost. This has been the longest losing streak since February 2009. Investors want to know which way the economy is heading and Wednesday’s Beige Book, the report on  12 Fed districts, shed little light reporting that there was slower manufacturing growth (albeit still growth) along with higher goods and energy prices. In a WSJ article the report was …generally optimistic about looking forward but less so than the last report… more on the chairman later….
• Exxon discovered two major deep water oil wells and a natural gas find in the Gulf of Mexico. The energy giant has been criticized by many saying it is a mere bank and its days of exploration are long over. Think Jimmy (The Mouth) when you read this.
• Speaking of Oil…Taking a line from Kojak, ‘Who loves you, baby?’ At the recent OPEC meeting the Saudi’s may not be BFF but at least they’re willing to crank out more production to keep prices reasonable.  The Libyans and Venezuelans who don’t care and have their own agenda of sticking it to the U.S. are demanding less production and higher prices.
• IPO LinkedIn- from $122 to $73 close on Friday….going…going… somebody been a-selling…
• From the Tycoon Report: Ben Bernanke: Evil Genius or Bumbling Buffoon? Boiled down Teeka Tiwari reports, ‘Without question, we are making every mistake that Japan made when it went through its housing led banking crisis that started in 1989. …it lasted for 20 years…without a massive tax hike the only other thing that can save us a massive global war (think WW2)…there has not been the large cathartic wash-out that is required to set the next stage for a large scale, sustainable growth.’
• Banks-  as new debit card rules limiting how much banks could charge is days/weeks away.  A vain attempt to get the matter pushed forward six months was quashed. The current rule is expected to cost banks about $15 billion a year. Expect higher bank charges to make up the difference. Master Card and Visa both fell on the news even though they have nothing to do with fees and collection which is left to the individual banks.
• Bankrate.com gussying up for its second IPO experience. Bankrate.com has been a solid resource to search for most competitive fixed income rates and credit cards.
• Bloomberg- More than half the fund managers including BlackRock, Fidelity and Franklin have turned bullish on Japanese equities.
•  Barton Biggs, former Global Strategist with Morgan Stanley, and now hedge fund manager, said about older tech companies you can buy them now at incredible cheap valuations. He is not buying LinkedIn or any of that ilk nor does he like the financials; and the reason he was quoted, ‘I’m concerned we’re going to be looking at write downs.’
• Markets up last Thursday! A day does not allow me to celebrate too much.
• So why are U.S  bonds rallying at these low rates? The five year bond yields just 1.5% and with Core inflation running 1.5-2.0%, why are investors  putting their money at risk? The U.S. relies on 50% of sale of bonds to foreign investors and given time foreign buyers just won’t put up with these numbers. But, right now, according to MarketWatch, the odd circumstance of the winding down of QE2, weakening global economy and continued issues with European sovereign debt all contribute. (see next piece)
• A 1.5 billion Euro bond sale failed after concerns about whether Spanish cities and regions have more debt than they have acknowledged. Usually a bond offering fails when 5-10% of the offering goes unsold –this time over half stayed on the shelf- even with a rating of triple-A from Moody’s.
• With all the talk about staying away from energy and financials – Thursday’s big movers were financials and energy. Citi up almost a dollar even with bad news of hackers stealing credit card information. Crude closed $101.93.  I told you…
• ING, the Dutch financial services company, is getting ready to sell its on-line bank and offer up an IPO in 2012. This part of the bailout imposed by the European Commission. The insurance division heavily into mortgage mess and was ordered to shrink its balance sheet by 45% by 2013. This underscores that saving with an insurance company does not guarantee safety.
• Sob- before I get to the end of the week a few comments after reading Barrons’ Alan Abelson who writes, ‘Beware of Scarecasts’, that while there may be a double dip and even with the vast financial sentiment is bearish… None of that is exactly a secret. ‘For bull markets rarely go kaput when just about everyone pays at least lip service to the need for caution.’ The Barrons cover story for Saturday was about the Mid-Year Roundtable entitled, ‘Buy Low Stay Nimble’. The usual panel of experts were asked what they thought of the coming year: Abby Joseph Cohen was upbeat given she thought things would slow down; Mark Faber was bearish and thought folks should own more gold; Scott Black liked certain stocks but was less than thrilled with the economy as a whole going forward; Mario Gabelli was ebullient and stayed the course with stocks he liked at the beginning of the year; Archie MacAllister who is a big fan of financials isn’t changing his mind and likes the Hartford, a lot; Bill Gross is down on Treasuries; and Meryl Witmer offers up some investment opportunities and thinks that the markets will end up higher because stocks are cheap. Almost everyone thought markets would be lower for the summer.
• The dollar traded higher Friday against the Euro. The Greek problem persisted and the European Political and Monetary officials are trying to kick the problem down the road, said Dean Popplewell, chief currency strategist at  Oanda Corporation. German lawmakers have insisted that not only will the sovereign debt holders take some responsibility but also private investors, with one possibility being to swap existing bonds for other securities that are worth less. (There is no way that they can devalue Greece currency which is the Euro, as they did or could in the days before the EU.)
• The President just doesn’t get it, according to Jim McTague in this past weekend’s Barrons.com. He hasn’t a clue, nor does anyone else in the White House on sound economic policy, namely jobs. ‘Winning the future,’ is the President’s mantra in the face of high gasoline prices, natural disasters and anemic job numbers. It’s simple- Jobs now will solve a lot, if not all, our ills. Voters are squarely blaming the President on the economy and no longer can he hide and blame the depression on George Bush. The future is now and the President and his cadre have no clue what to do. Even Wall Street, the whispers are, have turned against the President.

Finally- The Dow was off 172 points on Friday (this from a few days earlier when the news was that the markets were oversold) and even Gold and Oil were off their feed. This makes six solid weeks of losses. It is not the summer of 2o10 anymore.

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