Allowing banks almost a decade to get their financial houses in order set the stage last Monday for the domestic and foreign markets to rally. If this wasn’t so stupid I’d laugh. Regulators demand that banks raise their capital ratios in order to prevent another economic meltdown – but give them 8 years to get ‘er done. It’s like giving Lindsay Lohan probation…maybe…sometime. In eight years the financial, economic and political landscape will be totally changed. In the meantime some EU banks are in danger of possible default.
- Whoa, Nelly! The Hartford, according to Chuck Jaffe at MarketWatch, decided to encourage current variable annuity clients to exchange their old policy for a brand spanking new one. Not only were clients to lose some valuable benefits with their old policy but the advisors who sold the policies were not informed until the company had proselytized their clients. The Brits would call this, ‘ Rather cheeky’. Lawsuits will soon follow.
- Last Monday all indices up.
- Did Facebook wait too long to go public as Google and Twitter both announce adding social networking? Or, are Google and Twitter late to the party?
- Tuesday last Japan intervenes yen and their markets soar. Finally government is able to drive their money lower than the dollar enhancing their markets.
- Corn Syrup aka Fructose wants a new name. Seems the current name has bad connotations; namely cavities and obesity. The twins, Cane and Beet Sugar, are promoting themselves as the ‘pure’ sweetener in order to increase their market share. It doesn’t help the image that ‘Corn’ Syrup hangs around with ‘Beef’ Burger and ‘Greasy’ Fries.
- Drag out the wine press, Tony. The Chinese have discovered wine and not just any vino but the 2009 Bordeaux is supposed to be the best in the last 32 years according to wine expert Robert Parker. Bottles of the supremo vintage (if you can find them) are selling for $1900.
- Markets mixed on Tuesday as retail numbers came out slightly, very slight better, but better but not enough to promote excitement across all indices. Experts remark retailers had loaded up with back to school clothes and may not need to reorder for the Holidays.
- According to CNBC there is a $6.6 trillion gap between what people need to retire on and what they currently have.
- Markets up on Wednesday. The New Frugality is a new label of the U.S. consumer – spending cautiously and only as their income allows, according to Kathleen Madigan of Dow Jones. Consumer spending, she writes, will be closely tied to income growth. But, you knew that. I knew that.
- Money markets work the new rules and try new risk. WSJ reports funds are becoming more aggressive but working within the rules.
- MasterCard buying back shares as uncertainty still clouds the two major credit card companies.
- Gas prices still at high levels even though oil has tapered off. Oil has been tracking stocks until lately.
- Poverty rate accelerates to 14.3% the highest since 1994.
The deterioration in the labor market from 2008-2009 was the worst seen, according to Heidi Shierholz, with the Economic Policy Institute, a Washington think tank. Real median income also fell 1.8% for family households but rose 1.6% for nonfamily households.
- More people renting and not buying. Sigh. Remember this 2005 Time cover?
- Thursday markets edged up on tech news. Fed Ex expects a slower economic growth going forward.
- Michael Kahm tech analyst at Barrons.com, suggests this is a 2004 market readying to explode.
- Many of the large pension funds will be underwater- again- as their expectation of an 8% 2010 return is unfulfilled.
- Gold closed higher. Many still bullish but warn, as did Marc Faber, ‘Gold could pullback 20-30% in a day.’ Not a trade for the faint of heart at these levels.
- Finally, six more banks closed Friday bringing the year to date tally to 125.
Questions call Paul @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.
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