That Was The Week That Was –4th Week September

•   From the Department of, ‘Gee, I Didn’t Know That’, the recession ended June, 2009. This news gem courtesy of an obscure think tank who’s only function is to determine when recessions begin and end called the National Bureau of Economic Research. The announcement came just before the markets opened last Monday. In the meantime, as folks celebrated, the unemployment rate is still stuck at 9.6% and 16% of all working-age Americans lack a good job. All the while large companies sit on a stockpile of $18.4 trillion of cash and liquid assets.
• The good news tickled the markets fancy and off it went on a triple digit spree. The dollar down, gold and oil up.
• Was this the shot the market needed to trigger a Dow Theory buy signal? For Jack Schannep it was but for traditionalists like Richard Russell, editor of Dow Theory Letters, he’s not quite ready to say even a short-term buy has been generated.   
• Not so fast with that ‘recession is over’ talk, said the Oracle of Omaha, Warren Buffett. The country still remains in a recession. His defines a recession differently, ‘It ends when real per capita gross domestic product returns to its pre-downturn level.’
• Someone in the Administration must have given a policy speech because the markets ended mixed on Tuesday.
• So why the nice run for stock these last few weeks? Folks at CNBC think they know: A Reversal of Double Dip Fears –Valuations are Holding –More M&A Giving Confidence and finally – Shorts Had to Cover. (Now your turn to make up reasons.)
• SAIC, the Chinese auto maker is thinking of buying into the GM IPO in November. Interested in the stock once it becomes public let me know.
• Blockbuster filed for bankruptcy. The stock trades in the pinks in pennies. I could never understand the business model for renting movies and games.
• The old Admin economic team is being broken up. Latest to be shoved out the door is veteran egotist Larry Summers who loses the political battle with Geithner. Back to Harvard for Larry with the excuse du jour that his tenure would be lost. Sure, believe that and there’s a wee bridge to Windsor I’d like you to buy.
• Jen Granholm yakking it up on CNBC prime time Tuesday with Maria B. (Yes, our Gov. Granholm.) She was doing a lot of Granholmization as she bragged up the state of Michigan and all the benefits it held for the business world. (Can someone tell me where the hell she’s been for the last eight years? Now, out of a job she’s doing what she should have been doing. It’s like bad Presidents acting Presidential after they’ve been voted out of office.) Maybe she’s auditioning for a reality show?
• From the Department of ‘It Ain’t Gonna Happen’, to repay the government 100% what it borrowed shares of GM stock have to sell at $133.78 per share. Rumor has it, according to 247/Wall Street blog, GM shares will be priced around $20.00.
• Markets broke their 5 day winning streak Wednesday as all indices down. Gold surged as investors flocked to the metal and Treasuries.
• Thursday markets couldn’t make up their minds as jobs data came in much worse than expected. Last hour all indices collapsed except oil and gold were higher.
• More jokes from Washington as, according to WSJ, Dems put off plans to eliminate Bush tax cuts before the mid-term elections. Frightened, finally, of voter backlash, Dems threw in the towel last Thursday saying, ‘…we’re not going to pass what needs to be passed…’
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• Friday markets closed up-up=up! A triple digit day ever with bad news in the mix traders squinted them to good news and all indices powered up at the open and never let up closing near their highs. This may be the best September in 50 years with positive returns of eight percent for the month. Still there is caution ahead as Michael Kahn at Barrons.com shares that the Nasdaq 100 seems to be stretched too thin and be close to a pullback. Of course Michael and all my technical chart reading friends don’t count on momentum and just plain investment exhilaration to continue the market’s move up.
• Randall W. Forsyth predicts the dollar is going lower (bodes well for stocks), and gold higher. Gold, he says, is no longer a commodity but being treated as a currency.
• Friday Fed Chief Bernanke reiterated his dissatisfaction with the course of the recovery in a speech he gave at Princeton (boola-boola). He said the Fed may downgrade its forecast for economic growth when it next meets.
• Credit Unions… betcha didn’t know this…see the chart…and you thought they were safe and sane…
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• And 2 more banks were closed Friday bringing the total ytd 127.

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