That Was The Week That Was – 3rd Week December

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• A reminder that your local homeless shelters will accept food stuffs, blankets along with cash donation. If you’ve received food goodies as a Holiday gift and you don’t want it to go to waste  call your local shelter. You can find where by going on line or calling your city offices.
• Monday last markets mixed as China did not raise rates. This was good news as Bruce McCain, chief investment strategist at Cleveland;s Key Private Bank said, ‘Anything that puts them on hold or slows their efforts to dampen inflation is good for the U.S.’
• Is it just me or does Sarah Palin make Hillary more appreciated?
• Buying Treasuries by the Fed was supposed to reduce rates but instead stocks up and so are the yields on bonds. Mortgage rates, too, have increased, which threatens to kill off the recovery in a market that needs all the help it can get. Rates have increased from 4.17% to 4.61% on a 30-year fixed just from early November. Tuesday saw the Ben Bernanke say that the Fed would continue to buy and keep rates low.
• The U.S. dollar is also up when the goal was to make it cheap with Quantitative Easing 2.
• FDIC estimates it’ll take 17 years before it’s fighting fit. They’ve hiked the cost to banks and raised the reserve amount needed to 2% of insured deposit.
• It’s not always about ME. Americans are really self-indulgent when it comes to investing but watch the recent $20 billion dollar deal China and India cut, which covers banking, power and infrastructure sectors. This ain’t your usual emerging markets.
• I’ve never seen a Chinese restaurant go out of business.
• Barrons.com’s Alan Abelson reported over the weekend that insolvency stalks China’s banks. An Asian version of The Ben Bernanke ‘kick the can’ management style stalks the Chinese banking sector with an estimated $1 trillion in non-performing loans on their books.
• Where was the action in November? According to Barrons.com U.S. Stock ETFs garnered (who talks like that?) $8 billion while taxable bond ETFs saw outflows of $660 million (a mere piffle). iShares Silver also saw strong inflows.
• Treasury selling is accelerating as many buyers loaded up on the QE2 announcement by The Ben Bernanke. Ten-year broke 3.5% with 40 basis points in just the first 2 weeks in December.
• Wednesday markets ended slightly down. News from Spain downgrade contributed to the decline.
• Twitter valued $3.7 Billion. The company announced a round of funding that placed the value on the firm.
• Mom and Pop are trading currencies and not stock. That’s the news from the WSJ last Thursday as two on-line currency trading firms went public in December.  Experts contend that daily foreign exchange has surged to a record $4 trillion a day in 2010. (That’s a T not a B, dear reader.) Leverage is the key to trading currencies and may cool the ardor of amateur investors once burned. Traditional, established on-line brokerages are expanding their services to include the foreign-exchange trade. Trading foreign currencies by people who for the most cannot make correct change could be a recipe for disaster.
• Stocks continued their run on better than expected jobs report last Thursday and a bullish view from FedEx for the coming year. Credit card issuers came under attack as new rules on debit card transaction fees will cost them billions in revenue.  Vegas may be coming back to life as casinos are getting bullish and Las Vegas Sands expects group room rates to rise at least 10% in 2012.
• Talking to a bond manager Thursday and he whispered that Bill Gross invested $17 million of his own money into bond funds. He was wrong. Gross invested $21.4 million into several closed-end Pimco funds. Obviously he believes QE2 will drive down interest rates – eventually. 
• Moody’s downgraded Ireland’s debt.
• From the Opps Department –Corporate execs sold $19 billion of their company shares during the previous two months in anticipation of ‘Obama’ tax hike. Sales locked in 15% cap gain tax. List of Captain’s of Industry included: Bill Gates, Berkshire Hathaway’s Charles Munger and Microsoft’s CEO Steve Ballmer.
• Finally – markets ended the week up a bit with markets mixed. The Conference Board’s index of leading economic indicators in November made its biggest jump in eight months. The index climbed 1.1%.

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