Insomniac Hedge Fund Guy

Can Apple Be Apple Without Jobs?

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Wednesday evening’s announcement from Apple (Nasdaq:AAPL) that CEOSteve Jobs was resigning could hardly be called a surprise, but it will certainly accelerate a transition process that has been ongoing in fits and starts for a number of years. Apple has tapped a solid manager to replace Jobs, but competition in Apple’s core markets is heating up and investors may be right to wonder whether the company can maintain its over-the-horizon vision and ultra-confident operating strategy without such a rare visionary leading the show. News That Really Isn’t New That health issues would eventually force Steve Jobs to step down from … Read more

‘s Jackson Hole Fed Meeting Remarks

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For one weekend every year, the economic world turns its watchful eyes away from New York and Washington and to Jackson Hole, Wyo. This weekend, the Kansas City Federal Reserve will again host the annual Federal Reserve conference in the valley just outside Yellowstone National Park. Recent economic troubles have brought intense scrutiny to the meeting, and markets will be watching Fed Chairman Ben Bernanke’s Friday morning speech particularly closely for the barest hint of future policy moves. Full article available @: http://finance.yahoo.com/news/Markets-Await-Bernankes-usnews-3591226210.html?x=0&sec=topStories&pos=main&asset=&ccode=

Buffett’s Berkshire to Invest $5 Billion in Bank of America

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Aug. 25 (Bloomberg) — Warren Buffett’s Berkshire Hathaway Inc. agreed to invest $5 billion in Bank of America Corp., aiding a lender hobbled by costs tied to subprime mortgages. Buffett’s company will get a 6 percent dividend on his preferred stock investment and warrants to buy 700 million common shares about $7.14 each, according to a Business Wire statement today from Omaha, Nebraska-based Berkshire. –Editor: Dan Kraut   Full article available @: http://www.businessweek.com/news/2011-08-25/buffett-s-berkshire-to-invest-5-billion-in-bank-of-america.html

Treasuries Advance as Report Shows U.S. Jobless Claims Rose

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Aug. 25 (Bloomberg) — Treasuries rose as a government report showed initial jobless claims unexpectedly increased last week, fueling concern the economic recovery is slowing and stoking demand for U.S. debt. Treasuries snapped three days of decline speculation Federal Reserve Chairman Ben S. Bernanke may disappoint investors betting on a commitment to step up stimulus. European and Asian stocks rose a day before Bernanke’s remarks at a conference in Jackson Hole, Wyoming. Pre-auction trading indicates today’s $29 billion government offering of seven-year notes will produce a record low auction yield. “The Treasury market is reacting to the headline number being … Read more

VIX Falls as Sentiment Turns on Wall St

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TVIX, a measure of stock market volatility, fell 5% percent to 33. The VIX traded as high as 48 Aug. 8 after staying below 20 for much of the year. VIX is the ticker symbol for the Chicago Board Options Exchange Market Volatility Index, a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index or the fear gauge, it represents one measure of the market’s expectation of stock market volatility over the next 30 day period. The VIX is quoted in percentage points and translates, roughly, to the expected movement in … Read more

‘s cuts Japan rating, blames politics

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(Reuters) – Moody’s Investors Service cut its rating on Japan’s government debt by one notch to Aa3 on Wednesday, blaming a build-up of debt since the 2009 global recession and revolving-door political leadership that has hampered effective economic strategies. Japan is preparing to elect its sixth leader in five years to replace unpopular Prime Minister Naoto Kan, under fire for his handling of the response to a March tsunami and subsequent radiation crisis at a crippled nuclear power plant. The downgrade, while not out of the blue, served as another reminder of the debt burdens that nearly all of the … Read more

Investors trade in tight range ahead of Bernanke speech

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(Reuters) – World stocksedged up and oil advanced on Wednesday as investors tried to position themselves ahead of a Federal Reserve Chairman Ben Bernanke’s key speech. The gains follows weeks of market turmoil, with disappointing U.S. economic news and escalating worries about the debt crisis in Europe hitting sentiment. Benchmark stock indexes are on track for their worst month since the fall of 2008, after the Lehman Brother fall. World stocks as measured by MSCI .MIWD00000PUS were up 0.1 percent on the day but were on track for a 10.3 percent year-to-date loss. The U.S. benchmark Standard & Poor’s 500 … Read more

To my friend, the bear

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Darn, a 322 point rally just after you announced a five alarm fire with the sell all call to boot. Yes, we’ve taken a hit.  Confidence is way down and that’s what most of the early indicators are showing.  But don’t’ listen to what we say, look at what we buy.  People lust over Apple products, Taylor Swift concerts, and the residential rental market is absolutely booming.  Maybe owning a house is not the best idea for everyone after all. Europe is a great concern to us but then we appear to be a great concern to them and then … Read more

Students Need ‘Bs’ to Keep Parents’ Cash Flowing, Fidelity Says – Bloomberg

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Students Need ‘Bs’ to Keep Parents’ Cash Flowing, Fidelity Says By Alexis Leondis Two-thirds of U.S. parents said they’ll only pay for their children’s college education if they maintain minimum grades of B, on average, according to a survey by Fidelity Investments. The average grade point parents will require to pay tuitions is 3.1 out of 4.0, or about a B, once their kids are in college, based on the survey of almost 2,400 families released today by the Boston-based mutual-fund company. Seventy-five percent of respondents said they don’t want to burden their children with college loans compared with 65 … Read more

FRBSF Economic Letter: Boomer Retirement: Headwinds for U.S. Equity Markets? (2011-26, 8/22/2011)

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Boomer Retirement: Headwinds for U.S. Equity Markets? By Zheng Liu and Mark M. Spiegel Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance. A key demographic trend is the aging of the baby boom generation. As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement. Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades. via FRBSF Economic Letter: Boomer Retirement: Headwinds for U.S. Equity Markets? (2011-26, 8/22/2011).

Markets Rally Ahead of Fed News

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US shares add to gains on anticipation of Fed action US Stocks are rallying Tuesday, with the S&P 500 and the NAS up more than 2%, as buyers emerged before a highly anticipated address by US Federal Reserve Chairman Ben Bernanke later this week. Technology and other growth stocks drove much of the market’s gains, with the S&P Information Technology Index .GSPF up 2.4%. A weaker-than-expected reading of the US housing sector was the latest in a string of discouraging data that has raised expectations the US Fed will take measures to prop up the economy. New US single-family home … Read more

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