That Was The Week That Was – 2nd Week August

                                   The new Gang of Six?

• Whenever a crisis erupts those that think they know better than anyone else come up with ideas as to what you  and I should  have done with our money. They don’t tell us ahead but always after the fact. Even with the downgrade experts still like U.S. bonds and the dollar because there is no safer haven.

 During the meltdown Monday I spoke with a few people and one thing I mentioned is that you don’t lose money until  you sell. The news has been horrific and that’s because newspapers, radio and cable news sell bad news. Don’t make a decision when things are in crisis. Its in the same Family of Rules as: Don’t grocery shop when you’re hungry (2) Don’t go swimming after you eat. There is too much emotion for anyone to make a sensible decision. If you have concerns, and who hasn’t, call me- there are avenues that may not have as much potential going forward but could be proper for you to rest easier in the future.

Looking Forward investors hope for some stability this week rather than the roller coaster of last week. Also, according to The Street, there are a lot of issues unresolved that may still disrupt the markets. Attention, The Street admonishes, should be on global austerity and some sort of credible plan to foster domestic confidence. (2) Watch the Fed and see if it follows through (3) Resolution in Europe in key markets Italy and Spain. (4) Consumers? Will they stop spending? Or, will they bounce back. even modestly to support the economy? Those questions and whatever answers hold the key to a modest but effective economic growth.

• Even though Events in 2011 have been fearful and costly, especially the political theater in  Washington, the last minute Debt deal, the lack of providing a reasonable budget, the nine percent domestic unemployment, the European Union crisis, the Middle East crisis including the Egyptian uprising, the Libyan revolt and civil war; and the Japanese earthquake/tsunami along with its nuclear reactor meltdown, global companies have done well. It is amazing the fundamentals have been as strong as they have  with domestic companies reporting record profits.

 

Has The World Gotten 10, 12 or 15% worse in the last 48 hours?

• High Frequency Computer trading programs and traders were accused of being responsible for Monday’s sell-off  by both Pete Najarian and Jim Cramer on CNBC. ‘You couldn’t get ahead of the  selling,’ said Cramer. ‘You knew it was orchestrated that way the selling was proceeding in lock-step.’ This was not retail selling or institutional selling. Najarian was visibly incensed  by the machines continued onslaught throughout the day and suggested that the SEC examine their use and perhaps curtail their trading during volatile times.
• While this was happening , European leaders were reportedly not worried about business but on vacation.
• There was some attempt at reasonable financial thought Monday as analysts made buy recommendations on a variety of stocks. It was laughable though as all the recommended stocks fell and that included Yum Brands, Wells Fargo, Royal Dutch Shell and Proctor and Gamble; to name a few.
• Billionaire hedgy John Paulson has lost another 11% in his Advantage and Advantage Plus Funds. It is rumored that Paulson is down approximately 50% year to date. He reports so far investors have not run for the exits.
• Marc Faber says the correction has been so vicious because investors have lost faith with politicians and current economic policies. Then Faber should explain why the retail investor is sitting still while the high frequency traders are running amok? It just isn’t so that the little guy is burning his own house down. Faber repeats what most of us know, ‘In my opinion, government bonds are the short of the century.’  Not so fast, Marc. The Fed just have put that tactic on hold for the next two years!

• On Tuesday angels sang, the sun shined and flowers bloomed. The Federal Reserve Committee met Tuesday and agreed to do nothing except inform us that interest rates would remain low until somewhere in 2013.  Discussions included the Fed acknowledging a slower economic growth and only gradually decline in unemployment. Additional tools to aide in the recovery could be to buy bonds as needed or lengthening the duration of the debt it holds. In other words a modified QE3 if the Fed needs it to boost the economy. (According to one guest on Monday’s CNBC the QE1 & 2 initiatives were perfectly acceptable as the U.S. was simply borrowing from itself). The big news on a possible QE3 and low rates did cause the markets to pop over 4%- the biggest jump since March 2009.

• With interest rate ‘guaranteed’ to remain at effective zero for the next two years investors have an opportunity of buying longer maturities. Longer maturity bonds provide higher yield. What has held back many investors from the higher yield has been the worry of sudden interest rate hikes that would cause loss of principal. The yield on the 10-year closed on Tuesday was 2.24% and the 30-year 3.61%. (There still remains the market risk of rising rates as bond traders can sell positions causing rates to rise and effectively principal losses).
• Heard at Bloomberg -Wilbur Ross, another billionaire but one who buys things others don’t like steel, textiles and stuff, said he was buying stocks Tuesday. Ross asked the question, ‘ Has the world really gotten 10, 12, 15 percent worse in the last 48 hours? I don’t think so. Buying stocks at today’s prices over a couple of years’ time period will prove to be a uniquely rewarding experience.’  Ross also said from Los Angeles, ‘ We bought some on Friday, we bought some more today, we will probably buy more when New York opens again tomorrow.’ Once risk adverse investors capitulate things can get back to being more normal after that.’
• Stocks fell Wednesday as worries over France and the slowing economy  shook traders.
• A bumpy ride as fear, fear and more fear drove markets to another huge down day on Wednesday. If you studied some stock charts you’d see there was spot buying as stocks popped in price only to be pummeled a few minutes later. Martin Senn of insurance giant Zurich Financial said, ‘Clearly we are in a selling climax.’
• Cramer on his Mad Money lectured that an investor could believe the sky was falling (or words to that effect) or believe central bankers on both sides would do whatever was needed to contain the mess, bring order to markets and keep economies from drifting into a global recession.  This was also the language used in Bloomberg Thursday morning.

 CNBC After the Bell gave strong endorsement for CISCO. Also -Analysts at Gleacher & Company have a buy rating on the stock with a $20.00 target. There is a lot of normal regular business being conducted during this sell-off.

• Good News Some clients have had orders filled on stocks they thought they’d missed and which fell back to more attractive and CHEAPER price per share.
• If the folks passing out the Jim Jones Kool-Aid were so darn sure of themselves why are they not rich?

Lack of confidence in Governments is the root cause of the volatility.

• Joy as Thursday brought stocks almost back to where they were on Monday. A modest jobs report and Cisco posting better than expected earnings set the stage for a good day. Gold fell back slightly as margin requirements were hiked. Paul Nolte, director of Investments at Dearborn Partners, said, ‘Its like a basketball game. It would be nice if markets could settle into a 4%-5% trading range instead of moving on a daily basis that much.’ This is Nick Nolte and not Paul, just so you know.

7 billion shares traded on NYSE Thursday

• Tech was the hot spot Thursday but so were the banks, although Bank of America is squarely in the sights of the short sellers.
• Fear drove investors to pull $14 billion from stock funds. That does not include individual stocks. Money market funds (that earn basically nothing, zip, nada) had inflows over $47 billion- breaking some records for sure. Cisco was up 14%.
• The S&P 500 yield closed higher than that of the 10-year Treasury. In other words if you owned the S&P 500 index you earned a skoosh more than a 10-year.
• Do you remember when I wrote of the ‘Death Cross’? This is where technical analysts warn the 50 day moving average line moved below its 200-day average. This is to indicate a short-term price decline and longer term market warning, or worse. It came and went and seems nothing happened. The S&P was up 3%.  Maybe we’re supposed to wait? It’s like on time release?
• Anyone wonder why banks don't lend? According to Texan Thomas Depping, chairman of Main Street Bank, he plans on handing in the 27-year old bank’s charter and selling all four branches to the competition because the new regulations are stifling business. According to the Independent Community Bankers of America, a trade group, state and federal agencies have gone to extremes now poring over each loan, including those to small businesses. Depping plans on setting up a new lender to do business the way he wants and outside the official banking quagmire of rules. Backed by Paul Allen of Microsoft Depping will set up his business immediately after leaving Main Street.
• The New World is getting investors to reach for higher yields, according to the WSJ, by extending the olive branch of certainty and keeping rates at current levels. Still there is a lot of angst from investors about parking their money into a 30 year fixed and be subjected to sudden whiplash. (Personally I’d be a investigator into corporate and certain strategic bond funds that provide more oomph for the buck plus the liquidity – if ya’ll know what I mean.)
• Value Trap? Class? Notes? Pencils up. You think you spot a stock cheap and getting ready to pounce and someone like me dashes cold water on your dreams of riches. As soon as you buy the cheap stock just keeps getting cheaper. So how do you spot a Value Trap? The Answer: The stock has dropped more than the average stock in the S&P 500 index during the previous 90 days and the earnings are being revised downward faster than its peers. Like the Man said, ‘Be careful out there.’

                        WELCOME

TO THE                WORLD OF     SOPHISTICATED                                    CONFUSION Larry Fink, CEO of Blackrock, the world’s biggest financial house, talked to Barrons and said, ‘The markets worldwide are unsettled because of inaction and really bad results from government. We did not see leadership worldwide. We lost one of the fundamental bedrocks of investing- the certainty of good government.’ Larry Fink recommend corporate stock dividends as income alternatives rather than bonds.

 

- ‘WE LOST ONE OF THE FUNDAMENTAL BEDROCKS OF INVESTING- THE CERTAINTY OF GOOD GOVERNMENT!

• Bargain Days:  Insiders are buying shares of beaten down stocks.  Here’s a list of stocks MarketWatch.com reported that some CEOs and corporate insiders have been scooping up: Corning, Chiquita Brands, Morgan Stanley, Chesapeake Energy, Microsoft and Krispy Kreme.
• Finally- it ain’t over till its over. According to some technical analysts lead by Howard Gold and Michael Kahn the market has further to go down. Gold reported that the clues are the Fed openly saying the economy is sick and we’re not going to raise rates anytime soon- like get used to it – and that the open rebellion by three voting Fed members means that there is unlikely to be as an aggressive QE3 as there was QE2. Mark Arbeter, chief technical analyst of S&P, said he thinks the S&P could fall to 1020 or maybe as low as 935 (this is another 15% below Wednesday’s close of the previous week). Michael Kahn says he too sees support for the S&P around 1010 to 1050 and after that 930.  Both suggest lightening of equities in portfolios during rallies. The S&P 500 index closed 1179 last Friday.

and the FDIC closed one bank on Friday bringing the total in 2011 to 64. In 2010 157 banks closed for the year.

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

 

Answers to Questions Everyone Wants to Ask

The last dozen years have been difficult. In Michigan it seems as if we’ve been in a depression for all our lives.  The markets since the 2000 dot com crash and correction have continued to act as if they’ve been permanently medicated. Certainly they’ve not acted in a functional and dependable way. For that we can thank politicians and Wall Street Bankers. Most are now on summer break or campaigning to be reelected because of the ‘swell’ job they’ve done and a promise to ‘do better’. 

Now we are faced with another crisis coming at us on top of the 2008 Depression. The markets have fallen for 11 straight days all the while Washington politicians dithered, ignoring our pleas to compromise, and creating enough of a true mess where, for the first time, the credit rating of the United States has been downgraded. One of the reasons S&P handed out the lower rating was because they reasonably saw a dysfunctional political process. I cannot imagine a more humiliating experience than to be a politician and named as a primary reason for the humbling of the greatest country in the world. How these people responsible will answer their constituents in explaining how they got to be part of the problem instead of finding a solution is beyond me.

So where do we go from here?

Jimmy Cramer said on his program Thursday that investors want to know one of two things: They want to be told that things will be okay or to tell them to sell everything they own. Neither is practical. Selling after the fact and when there is no need is just not in the cards. Remember what happened to those that sold at the bottom of the depression and  still haven't gotten to where most of you are. They lost a lot more than the folks who bought and held.  Once you sell you just never seem to time your reentry to take advantage of the uptick. Fundamentals from an investment viewpoint are better than what we’ve experienced. This latest crisis is a direct result of lack of leadership and concern for anything other than political advantage from Washington.

Sunday Randall W. Forsyth in his Up and Down Wall Street column for Barrons wrote, ‘The market’s action last week suggested a liquidity event like 1987 rather than a systematic crisis as in 2008, according to David P. Goldman, the former head of credit research at Bank of America. There was an intense scramble for liquidity that suggested selling by hedge funds, which prompted an across the board dumping of all assets, especially those favored by the hedgies, such as the aforementioned emerging markets and commodities.’

Michael Santoli, from Barrons.com shares his views on what we can expect next. I have taken literary license to condense his answers.

This is not like 2008.  Don’t expect the same thing to happen like it did in 08. True. the markets and investors are jittery with close memories of 2008 and the more recent market Flash Crash of May 6 2010 where the markets suddenly swooned 900 points. We will see volatility. But, it’s not the same.

On Europe- unlike Lehman Brothers which was politically killed by rivals in and out of the government-(my thoughts)- the PIIGS cannot go out of business. Spain is just not going to fold up and go somewhere else. Their debt costs can go up, people will suffer but they wont close their doors and go out of business.

Is it possible to tell if a 10% correction (it’s 11% and counting but close enough) will be the start of a Bear Market? The answer from John Roque at WJB Capital says in the past 17 years in the 7 prior instances when such an extreme was hit the index was higher 2 weeks and 3 months later each time. But some of those were preludes to much lower prices rather than all clear signals.

Andrew Bary reports that for many of us its time to start shopping for bargains. His article states that while no one can predict when the sell off might end if the S&P 500 merely gets back to its 2011 peak in April the index will close UP 14%.

In this week’s Bloomberg’s BusinessWeek Barton Biggs, once of Morgan Stanley and co-founder of Traxis Hedge Fund, said August 3rd after 7 down market days and before the U.S. downgrade, ‘ I am very tempted to think this is a time to be buying stocks pretty aggressively. We are going to have a strong rally out of this position.’

Hold the phone, says Mark Hulbert. Many contrarian indications suggest that too many short-term market timers have refused to toss in the towel on their bullishness. Until they do contrarians believe a durable bottom won’t be in place.  In other words there may indeed be more selling to wash out the courage of conviction.

John (You Can Call Me Billionaire) Paulson said the economy is doing well enough to keep earnings rising and bring back some bullishness to the stock market.

In each of the prior three times the S&P fell 10% or more on 10 trading days the markets rallied an average of 18%. Those times were late 1974, October 1997 and August 1998.

In Smart Money the consensus is not to sell and some investors are ‘tantalized’ by the valuation of some of the largest stocks such as Chevron, Goldman Sachs and Intel all under 9. Well Fargo told its clients that a significant segment of today’s stock market is very inexpensive.

Domestic stocks may be done selling. It is worse overseas. The Euro Stoxx 50 index is down 15% this year, Japan’s Nikkei is off 9% and Brazilian stocks are off 24%. The U.S. markets have just reversed all their gains.

On the S&P downgrade Matthew Rubin at Neuberger Berman said, ‘It has a definite fear. The markets are being driven by fear and not fundamentals….it will have a detrimental effect on the American psyche.’

Of course no one really knows what will happen as we have never been here before. But even with the downgrade of U.S. Treasuries the reality is that there is nowhere else for investors to flee to safety except U.S. Treasuries. Investors look for political and economic stability in addition to timely payment and guarantee of principal. There is no alternative to the U.S. dollar.

From Heard on The Street Monday August 8th, ‘ Experience has shown that a downgrade doesn't have to be catastrophic for government debt. When S&P downgraded Japan early last decade, yields on government bonds had a muted reaction and 10-year government bonds remain around 1% today.

From Bloomberg.com on the downgrade consumers may see higher interest rates on their credit cards and increased interest on new mortgage rates. There will be a trickle down to a higher cost to the average person.

Marilyn Cohen, president of Envision Capital Management, says the market may have priced in a downgrade.’ Jeff Reeves at Marketwatch wrote the downgrade means nothing. Washington, he notes, is still useless, and Treasuries are still safe havens. He concludes what we already know, ‘…the downgrade is just the latest development in this asinine game of chicken that Congress is playing to decide the White House in 2012.’

Warren Buffett said, ‘Cutting the U.S. ratings was flawed. Financial markets create their own dynamics, but I don’t think we’re facing a double dip recession. Clearly what the stock markets do have is an effect on confidence, and this selloff can create a lack of confidence.’ He went on to say that the U.S. rating should be quadruple A rating.

And, if you want to see  stocks worth buying or funds worth holding go to my blog.

And, finally, from my perspective the Fed meets and may see the need to do a QE3. For that we have to wait and see.

Hope this helps and if you need anything else please call Paul Stanley @ 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this and all my blogs with someone who cares about their money.

 

That Was The Week That Was – 1st Week August

•  Rep Gabrielle Gifford's returned to the House to vote for the debt increase. ‘ I had to be here for this vote. I could not take the chance that my absence could crash the economy.’ 

 

• Nervous traders witnessed a massive selloff that started overseas and ended Thursday in a massive drop in the last hour of domestic trading. Computer trading programs triggered a race for the bottom as investors and traders watched the carnage.
•  
• It was the worst day in three years and blame was spread to Tea Party activists, overseas and domestic governments along with corporations sitting on trillions of cash and refusing to do anything with it.  It started with investors worried about the European debt crisis that now included Spain and Italy. On this side of the waters the straw that seemed to break the backs of domestic markets was the news by Bank of New York Mellon who announced they would start charging big customers 13 basis points to hold cash. John Brady, Senior VP for MF Global, said, ‘I think that has shaken the markets. Charging customers to hold cash is pretty punitive. It starts to smell like Japan.’ Computer sell programs kicked in and once started could not be reversed.  The National Post in Canada seemed to have a handle on the worst day since 2008 and put the blame: U.S. Politicians, Tea Party Activists and spending cuts during a fragile economic recovery; weak employment; Chaos in the Euro zone with government officials not saying a word about Ireland or Portugal; a commodity selloff with oil falling to a five month low and both the Swiss and Japan trying to weaken their currencies and counteract the world’s expectation of a safe haven.
• No surprise that major investors and traders were expecting a United States default Monday as politicians wrangled for a political edge and completely forgot about what the job they were voted to do. The Debt deal didn’t mollify investors but sparked fears that spending cuts could curtail growth. The crash was a complete surprise and almost a perfect storm set up by the governments on both sides of the Atlantic. Nothing was safe as margin accounts were unwound and sell at any price- the rule of the day.

 

 As if it couldn’t get worse Standard & Poor’s lowered its debt rating of the United States (for the first time in History!) to AA+ from AAA! The rumors of a downgrade had been swirling all day Friday as the markets had a 400 some point swing day from up-down- and finally ending slightly up in a mixed market day. While it was business as usual in Washington with lawmakers off on another vacation and the President campaigning S&P drew a line in the sand and was firm on its decision to downgrade U.S. debt. The reason the ratings agency gave…the political system of the United States has become less stable and that the budget cutting announced earlier this week didn’t go far enough. We deserve better.

• Before you throw in the towel a few syllables about what’s good. Corporate profits remain robust. Around 80% of the S&P 500 companies have reported earnings and aggregate earnings and revenue are both up about 13% from one year ago, according to Yardeni Research. Corporate cash is at recover levels and a growing number of companies are buying back shares and raising dividends. Here are a few companies  Dave Kansas at WSJ mentioned as having attractive valuations:
• The S&P 500 trading at 13.6 P/E versus traditional 16.
• Apple sitting on $76 billion in cash. 14 x’s forward earnings.
• Intel at 9 times
• General Electric at 12
• IBM at 13
• Ford at just 6 times forward earnings.

• Warren Buffett, ‘Be fearful when others are greedy, and be greedy when others are fearful.’

 

• Gold fell as traders unwound margin accounts. In case you were wondering. In a panic nothing holds.

 

• All the efforts of Quantitative Easing 2 were wiped out in a few hours which will give the Ben Bernanke pause to consider QE3. On CNBC Market Wrap discussion included the very real possibility of the Fed stepping in to stabilize markets with a QE3. Especially if the Fed thinks the country is slipping into a recession!

• In order that we not forget: Jimmy Cramer’s Rant against the Federal Reserve and The Ben Bernanke just celebrated a 4 year anniversary, ‘ They know nothing!’ on August 3rd. The rant heard around the world happened one year after the markets collapsed and the Fed dithered and sat on its hind legs doing nothing. At the time one Fed official, Bill Poole of St. Louis, wanted to RAISE interest rates. The discount rate at the time was 6.25%.  Unemployment was accelerating along with mortgage foreclosures and the stock market was posting losses each week. Finally someone awoken The Ben Bernanke and rates started to come down but very slowly. Without Cramer it may have happened much later. (I’m not a huge fan of the Jimster but give him credit when its due). Will this happen again?
•  Lies the government, brokers, bankers and mutual fund salespeople tell you: it’s not true that most Americans are ill prepared for retirement. Research at the Rand Institute shows that 7 out of 10 Americans aged 66-69 are adequately prepared for retirement. The report does state concerns notably among singles with no college education, and especially among single women, are especially vulnerable.
• George Soros, billionaire, hedge fund manager and all around left wing crackpot, is leaving the investing- for -others business. The 80-year old Soros says his hedge fund will return investor money and act more like a family business. Some have suggested that the types of investment that brought Soros money and fame may be getting a little long in the tooth and this is a good time for him to hang up his spurs as long as his legacy is intact.
• Consumer Reports’ rule for investors: Don’t invest in anything that eats or needs repainting.
• From the Department of  Another Way To Game The System: Rules were enacted, eight years ago, to curb analysts from meddling with trading. This was to support a so-called Chinese Wall and not fluff the company value to investors in order to get at the company investment banking biz. Now there is a new game afoot. Seems that after the 40 day Quiet Period, after a new stock is issued, investment houses are apt to release positive reports on stocks they  brought to market. Traders buy just before the expiration of the 40 day period in anticipation of the bullish report.  Game on!

• Jimmy (The Mouth) Cramer comes in second at a Louie Look-a-like Contest: Jimmy top right and Louis C.K. star and producer/director of Louie seen on cable channel FX in the other uncanny pix.

Here’s the rest of the week play by play as it unfolded…

• Monday last the markets soared at the open and just as quick dropped like a stone as manufacturing numbers came under question plus whether or not Congress would actually agree to increase the debt. At the close all indices closed off their lows. I  watched CBS news Monday as 4 Congressmen were interviewed by Scott Pelley and three of the four were candidates for anything other than doing the work of government. Dysfunctional and ignorant are probably safe descriptions. Even Joe Biden said that the last two weeks showed how dysfunctional Congress is.
• Jim O’Neill, head of Goldman Sachs asset management arm, told Bloomberg that portfolio weightings into emerging markets for most investors should be raised. When asked which of the BRIC countries he likes the best the Jimster said, ‘I would actually pick Russia right now.’ Market Vectors Russia (RSX) is up 4.5% in 2011.
• Technician Michael Kahn at Barrons.com illustrated weakness in the industrials. Interestingly he also stated that the weakness extended to the airfreight biz- (remember FedEx gave sterling going forward projections for the balance of 2011). Caterpillar and 3M also closed lower and fell below their own rising trendline.
• Surprise! Toyota raises outlook after a 99% profit slump. The Japanese automaker said it expects a second half rebound. The automaker, with all its problems, is still in the hunt as #1 world auto maker. Morningstar likes shares in TM to $105 and they closed Monday a tad under $82.00. All domestic manufacturers had superb July as Chrysler was up 20% and Ford and GM were up 8% and 9% and both suffered stock losses on Monday and Tuesday.
• Your friendly neighborhood banks are working on language to include in savings and check documents that include arbitration as the only way a customer can resolve a dispute. Forget about taking your case to court or joining a class-action lawsuit some banks  have already included arbitration language into their agreements.  Regions bank just strengthened language in their 43 page agreement when a customer opens an account to read: ‘will not have the right to pursue a claim in court or a jury decide the claim and you will not have the right to bring or participate in any class action or similar proceeding in court or in arbitration.’ Banks with  mandatory arbitration are: Well Fargo, JP Morgan, TCF, BB&T, Huntington and Regions.
• Stocks cratered in the last hour of trading Tuesday. The debt limit was passed and sent to the President. Notably absent were any photos of the government officials who made the ‘deal’ possible. It was a sad pix of the Prez sitting all alone at a desk and signing the bill into law. See him below on August 2nd and then signing the health care bill into law with all BFFs. The Prez  usually has a big crowd even when he orders lunch.  Note all the pens lined up in front of him –Stocking stuffers?   Tuesday stocks had been meandering all day, slightly off their feed, when consumer spending was revealed as anemic and threat of a ratings cut by either Moody’s or S&P  finally triggered computer sells. Late news printed by the WSJ that afternoon was as poignant as a Mickey Spillane story: There’s no doomsday on the horizon, as much fun as it would be to prepare for one. There’s not even necessarily a crash. But there’s likely to be a long period of challenging conditions for investors. The 18% average real returns (after inflation) of the 1980s and 1990s are as over as M.C. Hammer pants. The 7% real returns of the last two centuries look optimistic, too.’
• A sympathetic Bounce is what we were looking for in the markets after 7 days of down, but it wasn’t what we got on Tuesday. Government lead us to the brink and many still don’t have a clue to what they did. Jimmy (The Mouth) Cramer on his Mad Money said he was Not recommending investors to sell- even though-he said- he had done it before and had no qualms to do it again.
• The Swiss aren’t too thrilled with a stronger Franc and announced they would do whatever needed to be done to halt the rise of their currency. A stronger currency buys less goods and services. News crushed the Swiss Franc while both the Euro and Dollar jumped.
• Japan nixed a stronger Yen on Thursday. The global battle for cheap currency is on. Gold will benefit from this price war.
• Stocks finally edged into positive territory but not without a lot of anxiety Wednesday. GM reported a 7.6% gain over  last year and investors still have turned away from the autos in 2011. Efram Levy, analyst at S&P, has a strong buy and a $42.00 target on the stock, still shares are down 26% this year. Ford is down 31%. Some fault the talks with the UAW but the UAW is lovey-dovey and wants nothing to disrupt the manufacturing process or jobs
• Psssst- Regions Bank Vice President John Turner, Jr. bought $50,000 shares of the bank at $5.94. Morningstar has shares of RF fair valued at $8.00.

• Hello? Dendreon the company once being whispered as the possible thousand dollar a share because of its cancer drug. Sales were disappointing and shares in DNDN were slashed Wednesday by 62%! Zipcar, a most recent IPO in its first quarter as a public company announced narrower than expected loss and shares were up.
• Retired or Expecting to Retire? Republican House Majority Leader Cantor said Wednesday that Americans better get used to Entitlement Promises being broken. He went on to say that when the committees meet they will look to preserve benefits for those 55 and older. ‘This is the better way for American’s to get their house in order.’ Still no word about reducing Congress’ automatic pay raises, reducing their pensions or benefits as a way of sharing the pain – since the U.S. government has a lot to account for the financial crisis and they way its been handled.  
• Finally- while we can expect volatility on the S&P downgrade both Moody’s and Fitch have affirmed the United States debt as AAA, although Moody’s cautioned it may downgrade U.S. debt in the future. The U.S. joins China and Japan in the AA club. Other double As include: Belgium, Spain, Israel, Taiwan, Saudi Arabia and Abu Dhabi.

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