Month: August 2011

Obama Talks to Buffett About Economy

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President Barack Obama, preparing for a post-Labor Day speech with plans for stimulating the economy, talked with billionaire Warren Buffett about how to boost job creation and spur growth. “The president and Mr. Buffett discussed the overall outlook on the economy and the reaction to the headwinds we’ve experienced over the last couple of months,” said Josh Earnest, an administration spokesman. “They talked a little bit about some possible measures that would spur investment and increase economic growth and they also talked about some measures that could address the long-term fiscal situation in this country.” Obama placed the call yesterday … Read more

Sign of a top? GLD Moves Into Top Spot, Surpasses SPY As Biggest ETF – Focus on Funds

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GLD Moves Into Top Spot, Surpasses SPY As Biggest ETF Is $5,000/Ounce The New Target In Gold’s Run?MKM: Buy Silver ETF (14% Upside); Pair Utilities With October Calls By Murray Coleman Here’s another rather stark sign of our times: – The SPDR Gold Trust (GLD) on Friday moved past the grand-daddy of all ETFs, the SPDR S&P 500 (SPY), as the leader in overall assets. According to data provided by State Street’s (STT) Global Advisors ETF unit today, here’s a breakdown of assets as of Friday’s close: GLD: $76.67 billion SPY: $74.38 billion But something to keep in mind about … Read more

S&P replaces president with Citibank exec after U.S. downgrade

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(Reuters) – The chief of Standard & Poor’s will step down next month, to be replaced by a senior Citibank executive, in a move announced a few weeks after the credit rating agency downgraded U.S. government debt and sparked a row with Washington. S&P’s parent, McGraw-Hill Companies Inc, said on Tuesday that Deven Sharma, who has served as S&P president since 2007, would step down on September 12, to be succeeded by Citibank chief operating officer Douglas Peterson. “S&P will continue to produce ratings that are comparable, forward looking and transparent,” McGraw-Hill said in a statement, adding that Sharma would … Read more

Obama’s Attack on Goldman Sachs May Trigger Recession

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The regulators Goldman Sachs NYSE:GS witch hunt is spooking investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009. They slipped further in after-hours trade to $105.45. Should a large scale prosecution or arrest be made the US market faces a real crisis. Whilst it has been a bumpy economic year in the USA it is our opinion the economy has recovered well from the 2008 disasters despite poor administration and wasteful spending in the White House. However, Obama’s latest attack … Read more

Ongoing Greek Bail Out

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Greece will receive next tranche of EU-IMF aid on time Greece will receive the next tranche of EU-International Monetary Fund (IMF) aid package on time in September, Greek Deputy Prime Minister and Finance Minister Evangelos Venizelos said Monday, rejecting scenarios of potential delays and obstacles due to the ongoing debate within the EU over the loan collateral. “Our financing needs next month will be covered. There are funds available. There are about 45-B Euros (US$57.69-B) still available from the 1st bailout pact,” stressed Mr. Venizelos during a press briefing at the Finance Ministry. Some EU member countries over the past … Read more

China Details Yuan Use Offshore

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SHANGHAI–China has released draft guidelines on foreign investors’ use of yuan acquired overseas for direct investment in the country, taking another significant step forward in further internationalizing the Chinese currency and opening the nation’s tightly controlled capital account. In a statement late Monday, the Ministry of Commerce laid out for the first time the framework for the so-called yuan-denominated foreign direct investment, formalizing a trial program launched in the second half of last year. While under the trial program approvals were granted on a case-by-case basis, the new … Full article available @: http://online.wsj.com/article/SB10001424053111903461304576525731746088812.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29&utm_content=Google+Reader

Politics to Stall USA Recovery

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The Word from Republicans on The Hill is, “we will oppose Obama’s plans” US President Obama is widely expected to announce a new jobs plan on or just after Labor Day when he returns from his vacation. The plan will likely include the extension of payroll tax cuts, new revenue for transportation projects and an extension of emergency unemployment benefits for the 9.1% of Americans still unemployed. Mr. Obama’s campaign advisor, David Axelrod, said Sunday that there is nothing in the proposal “that reasonable people shouldn’t be able to agree on”, but many Republicans are already preparing to reject and … Read more

Layoffs sweep Wall Street, along with low morale

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(Reuters) – In early summer, before layoffs began sweeping across Wall Street, billboard-sized photos of employees were plastered on the walls, pillars and elevator banks of Credit Suisse Group AG’s offices in the United States and abroad. The museum-quality prints, depicting workers from administrative assistants to senior executives, were emblazoned with motivational words like “Proactive” and “Partner.” By mid-July, however, the photos disappeared and the Swiss banking giant began laying off 2,000 employees. Security guards prevented employees from taking cell-phone pictures as the posters were stripped away, according to one employee who was present. “It sent an entirely wrong message,” … Read more

Global Baking Regulation Update

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Enhancing financial regulation has been a common view between governments since crisis in Y 2008, but debates over implementation details continue, especially since the recent debt crisis has given rise to Double Dip recession danger. Bankers and financial experts have agreed that the Global banking system needs prudent regulation, but how to strike a balance between regulation and financial innovation is Key issue not yet solved.. Dai Peng, an official with Export-import Bank of China, one of China’s policy banks, said at Saturday’s 5th Annual Bankers Forum that increased regulation and financial innovation should receive equal attention in the reform … Read more

USA Economic Calendar

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On the Economic Calendar in the USA August 23rd, Tuesday New Home Sales, July (10:00): 310-K expected, 312-K past August 24th,  Wednesday MBA Mortgage Index, 08/20 (7:00): +4.1% past Durable Orders, July (8:30): 2.0% expected, -1.9% prior (revised from -2.1%) Durable Orders -ex T, July (8:30): -0.4% expected, 0.4% prior (revised from 0.1%) FHFA Housing Price I, June (10:00): 0.4% past Crude Oil Inventories, 08/20 (10:30): 4.233-M past August 25th, Thursday Initial Jobs Claims, 08/20 (8:30): 400K expected, 408-K past Continuing Jobs Claims, 08/13 (8:30): 3700-K expected, 3702-K past August 26th, Friday GDP – Second Estimate, Q-2 (8:30): 1.1% expected, … Read more

A Tale of Two Intervals

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S&P 500 Daily Chart S&P 500 Weekly The Chart on the top shows a somewhat overbought market on April 29th and a normal correction.  I see no unusual predictive ability examining the daily chart of the S&P500. On the other hand, the chart on the bottom shows a major bearish divergence on April 29th .  Note this is a weekly chart and has quite a different outcome.  This presaged a sharp downturn although I had no way of knowing the severity of the drop.  The month of August so far has turned out to be worse than any month in … Read more

‘t know what it is do you, Mr. Jones?

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The S&P 500 is down 13% for the month to date in August and it’s not even over.  This is a far worse month, 30% worse than October 2008 which was down 10% although we had two back to back 10% down months.  People are not talking about that.  Gold has gone parabolic.  Something is happening here but we don’t’ what it is, but then again maybe we do.  It’s the final unwinding.   And with it goes the Euro.  Talk about too big to fail.  I don’t want to sound like I’m panicking.  I’m not but then again you … Read more

Bank Taps Fund, Raising Jitters in Europe

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Amid renewed fears that the euro-zone crisis could put fresh pressure on short-term funding, an unidentified bank made use of the Federal Reserve’s swap facility via the Swiss National Bank, borrowing $200 million earlier this month. The SNB disclosed that it applied for $200 million of dollar swaps on Aug. 10, at a rate of 1.08%. The funds were paid back on Aug. 18. In a sign of the nervousness sweeping the markets, both UBS AG and Credit Suisse Group, Switzerland’s two largest banks, issued denials Friday … Full article available @: http://online.wsj.com/article/SB10001424053111903596904576518462334049434.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+%28WSJ.com%3A+What%27s+News+US%29&utm_content=Google+Reader

Apple is worth as much as all euro zone banks

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LONDON (Reuters) – Technology company Apple is now worth as much as the 32 biggest euro zone banks. That’s the stark result from a steep fall in the share price of banks including Spain’s Santander, France’s BNP Paribas, Germany’s Deutsche Bank and Italy’s Unicredit, compared to a steady rise in Apple’s valuation, according to Thomson Reuters data. Earlier on Friday the DJ STOXX euro zone banks index fell 4 percent, valuing its 32 members at $340 billion. That’s based on the market capitalization of their free-float shares, which for some French banks in particular is less than 100 percent. The … Read more

U.S. Stocks Little Changed Amid Economic Concern; Oil, Euro Rise

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Aug. 19 (Bloomberg) — U.S. stocks fluctuated between gains and losses as investors weighed growing concern over the global economy and Europe’s debt crisis against valuations near the cheapest level since 2009. Crude oil and the euro rose. The Standard & Poor’s 500 Index rose 0.2 percent at 11:59 a.m. in New York after rising as much as 1.2 percent and falling 0.9 percent. The Stoxx Europe 600 Index slipped 1.6 percent after dropping as much as 3.6 percent. Oil rose 1 percent as it also swung from losses to gains. Gold futures topped $1,880 an ounce for the first … Read more

Low Rates Hit Money-Market Funds

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Money-market mutual funds, those havens of safety for investors during tumultuous times, are facing their own pressures as interest rates continue to decline. The funds, which historically aimed to provide higher yields than bank deposits without risk of losses, are waiving fees and consolidating—or closing their doors altogether. The drop Thursday on the 10-year Treasury to below 2% in intraday trading provided fresh bad news for the funds. Money-market funds once were profit machines, collecting $13 billion in fees at their peak in 2008. But they have seen their revenues shrivel by 65% over the past three years as short-term … Read more

The New World Order

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Most Americans are too distracted to recognize that the New Global Order (the Order) has emerged. It is safe to say that the USA will most likely continue to be a main player in the Order. But, right alongside it will be China, Russia, India, Turkey, Japan, South Korea and Brazil. It is now unclear if the EU with Germany carrying the whole weight, will be able to play. Alone, Germany would be a Key player IMO. Washington, no matter what it does will not be able to stop this transformation. US politicians, however, will continue to bluster that the … Read more

Volatile Stocks Seen Leaving Lasting Scars on U.S. Fund Investors’ Psyche – Bloomberg

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Cash is King Younger investors aren’t replacing their retiring counterparts. Cash holdings are at the highest levels since the record in March 2009, according to an Aug. 16 survey by Bank of America Merrill Lynch. Investors from 18 to 30 years old have the highest cash position of any age group at 30 percent of their portfolio, MFS Investment Management said in an Aug. 8 report. Almost three in five investors cite fear about volatility or needing money someday as a reason they hold high or increasing levels of cash. “Investors are in cash for a reason and, regardless of … Read more

Taking Stock Dividend Play Breaks Out – Better Bets

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TAKING STOCK: Dividend Play Breaks Out, But There Are Better Bets Published: Aug 17, 2011 By Tomi Kilgore A DOW JONES NEWSWIRES COLUMN When it comes to performance on Wall Street, it’s all relative. With Treasury yields exceptionally low and the potential for a further slowing in the economy, buying stocks with a steady, high-dividend yield seems like a no-brainer. But before investors jump on the bandwagon, they should consider that recent relative performance data suggests high-yield corporate bonds are a better play. A good way to bet on dividend plays is via the SPDR S&P Dividend exchange traded fund … Read more

Euro experiment must end

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There doesn’t appear to be anyway out of the sovereign debt problem short of printing money.  Euro bonds don’t seem to have much traction although the idea is a nice hail mary and may still arise from time to time.  If the countries in Europe wanted to be more like the United States of Europe, they should have had a political union, a unified army, and a democratically elected United States of Europe government before they undertook monetary union. Several large systemically important European banks will fail unless bailed out by their prospective Governments.  Oops, they can’t print money the … Read more

U.S. investigating S&P over mortgages

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  (Reuters) – The Justice Department is investigating whether Standard & Poor’s improperly rated dozens of mortgage securities in the years before the financial crisis, The New York Times reported on Thursday, citing sources familiar with the matter. The investigation began before S&P, a unit of McGraw-Hill, downgraded the long-term U.S. debt from a AAA rating to AA-plus this month, the paper said. In the mortgage investigation, the Justice Department has been asking about instances in which S&P analysts wanted to assign lower ratings to mortgage bonds but may have been overruled by S&P business managers, the Times reported. Justice … Read more

SEC May Have Destroyed Papers on Bank Probes

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The Securities and Exchange Commission may have destroyed documents related to investigations into major banks and hedge funds, according to Sen. Chuck Grassley (R-Iowa). “From what I’ve seen, it looks as if the SEC might have sanctioned some level of case-related document destruction,” Grassley said in a statement. “It doesn’t make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame, and to what extent its actions were consistent with the law.” … Read more

Wall Street tumbles on economy, bank worries

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(Reuters) – Stocks tumbled more than 4 percent on Thursday after data pointed to a stalled economyand as bank shares sank on a report regulators were scrutinizing the U.S. units of big European lenders. The decline was broad as well as steep, with just a small handful of the S&P 500’s components in positive territory. The KBW bank index slid 5.5 percent, with Citigroup Inc off 9.6 percent at $27, and Morgan Stanley down 7.5 percent at $15.75. “The market is in meltdown mode,” said Sal Catrini, managing director for equities at Cantor Fitzgerald & Co in New York. “The … Read more

‘ U.S. units

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(Reuters) – The Federal Reserve Bank is taking a closer look at the U.S. units of Europe’s biggest banks, concerned that a euro zonedebt crisis could spill into the U.S. banking system, the Wall Street Journal reported. The $2.5 trillion U.S. money market funds industry — which supplies short-term dollar funding to banks — has retreated from the euro zone in recent months, concerned that the continent’s debt crisis is spiraling out of control. That and the drying up of interbank lending has led to a trebling of dollar funding costs for euro zone banks in the last month. One … Read more

Governments Still Buying Gold

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Thailand, South Korea and Kazakhstan added gold valued at about $2.59 billion to their reserves in July, joining Mexico and Russia in increasing holdings this year as central bankers hedge against depreciating foreign-currency reserves. Gold fell for the first time in four days after the metal’s rally toward $1,800 an ounce prompted some investors to sell the metal. Immediate-delivery bullion lost as much as 0.4 percent to $1,784.20 an ounce, and traded at $1,787.90 at 9:09 a.m. in Singapore. Gold’s relative strength index has topped 70 since Aug. 5, a signal of a potential drop. “the next gold consolidation will … Read more

S&P Backs French Triple-A Rating

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PARIS—A senior Standard & Poor’s Corp. analyst Thursday confirmed France’s triple-A rating and stable outlook for the country, dispelling investor fears that the top-notch grade of the euro zone’s second-largest economy may be at risk. “We’re confident in the triple-A rating, stable. We have confirmed it, we confirm it today,” said Carol Sirou, the head of S&P in France, in an interview on French radio. “There are several rumors, but we never comment on them.” France has increasingly appeared to be the weak link among top-rated euro zone countries, with higher deficit and debt-to-gross-domestic-product ratios than the other five triple-A … Read more

Greece, Ireland, Portugal Should Default on Debt, Pimco Says

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Aug. 17 (Bloomberg) — European politicians should let Greece, Ireland and Portugal default while taking steps to ensure Italy and Spain won’t, according to Pacific Investment Management Co.’s Neel Kashkari. “They are delaying and denying as long as possible because the medicine to actually put out this crisis tastes so bad,” Kashkari, head of new investment initiatives at Pimco, said in an interview on “InBusiness With Margaret Brennan” on Bloomberg Television. “They are always behind, always trying to play catch-up, and the crisis is always getting worse.” Germany, France, the International Monetary Fund and the ECB should unveil a “massive” … Read more

Producer Prices Surge in July as Inflation Fears Ratchet Up

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U.S. core producer prices rose at their fastest pace in six months in July, pushed up by higher tobacco and light truck costs, according to a government report on Wednesday that could stoke inflation fears. The Labor Department said its seasonally adjusted index for prices paid at the farm and factory gate, excluding food and energy, rose 0.4 percent—the largest increase since January—after rising 0.3 percent in June. That compared with economists’ expectations for a 0.2 percent rise. Overall prices received by producers rose 0.2 percent after falling 0.4 percent in June, above economists’ expectations for a 0.1 percent gain. … Read more

Fed Faces Criticism as Political Season Intensifies

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  Don’t mess with Texas, at least when it comes t0 monetary policy. Rick Perry, the latest entrant into the race for the Republican presidential nomination and already among the frontrunners, fired a shot across the bow of the Federal Reserve Monday. “If this guy prints more money between now and the election,” the Lone Star state’s governor said “it would be almost…treasonous.” That kind of scathing criticism of the Fed usually was leveled behind closed doors. In the same Texas tradition, in the 1960s President Lyndon B. Johnson excoriated then-Fed Chairman William McChesney Martin for raising interest. But that … Read more

”ll Fizzle

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Financials look likely to survive, but that doesn’t make their shares a good deal As U.S. stocks turned volatile this month, big bank shares got especially wild. The Dow Jones U.S. Financials Index plunged 17% in August through the middle of last week before rebounding 8% by the close of trading Monday. During the same stretch, the Dow Jones Industrial Average lost 12% and gained 7%. The bounce suggests investors don’t expect a 2008-style collapse of the financial system. On that point, there’s reason for optimism, but stability alone doesn’t make the sector a good deal. Banks face two longer-term … Read more

"The insomniac hedge fund guy" is a moniker Harvey Sax, the portfolio manager for The Insiders Fund has used from time to time on email, blog , and social media posts. While Mr. Sax is the portfolio manager of The Insiders Fund, these posts are not communications from, nor endorsed by, Alpha Wealth Funds, LLC or any of its managed funds. References to Alpha Wealth Funds or its affiliates are for identification only and do not imply sponsorship or approval. All registered trademarks herein are the property of their respective owners.

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