4/25/11…another manic Monday

This week’s economic calendar is quite full with several housing related indicators. However, the highlight of the week will be the 2011 Q1 advance report on GDP (Thursday). We will also get March New Home Sales (Monday), the February Case-Shiller Home Price Index and April Consumer Confidence (Tuesday), March Durable Goods Orders (Wednesday), March Pending Home Sales (Thursday), and March Personal Income & Outlays, the Q1 Employment Cost Index, the April Chicago Purchasing Managers Index, and the final April Consumer Sentiment (Friday).

In addition to the economic calendar, there is a FOMC Meeting (Tuesday and Wednesday). On Wednesday, the FOMC Policy Statement will be released at 12:30 p.m. (ET) rather than at the traditional 2:15 p.m. Instead, Chairman Bernanke will hold the first ever post-meeting press conference at 2:15 p.m. (ET). The press conference is schedule to last approximately 45 minutes. Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA

Bloomberg Top Stories:

*Silver, Gold Reach Records as Dollar Weakens; S&P 500 Index, Futures Climb

*Barrick Gold to Buy Equinox for $7.68 Billion, Topping Offer by Minmetals

*Global Profits Top forecasts From Apple to Novartis on Productivity Gains (translation: not creating jobs, therefore not sustainable! TB)

*Gross’s Bearish Treasury Bet Clashes With Dealers Seeing Scope for Rally

*S&P 500 Options Highest Since Lehman Brothers Signal Gains as Buyers Hedge

*Sales of U.S. Homes Probably Rose From Record Low as Market Struggled (foreclosures will do that won’t they and that is what half of sales are! TB)

*Malaysian Ringit Advances Beyond 3 Per Dollar for First Time Since 1997

*Corn Seen Topping Wheat, Raising Tyson Costs, Boosting Sales at Syngenta

*Hedge Funds Bullish on Natural gas as Nuclear Output Falls – Speculative! TB

*Dudley Sees Interest on Reserves as Tool of Choice Sparks New Fed Debate

*Syrian Forces Storm Daraa as Activists Detained in Sweeps Over Three Days

*California State Employees Making 25% More Than Texans Yields $56,000 Pay

Bloomberg Quote of the Day: “A little learning is a dangerous thing but a lot of ignorance is just as bad.” – Bob Edwards…sounds like our Congress! TB

Thursday’s volume (813M shares), not surprisingly, was the lowest of the week and was the 24th straight below average session yet it was a nice up day…proving once again on low volume you can do anything, after all it’s up to you, New York, New York…just keep spreadin’ the news!

The Dow wa +0.4%, Transports +0.6%, S&P 500 +0.5%, Nasdaq Comp and 100 up 0.6% and 0.8% respectively while the struggling Russell 2000 small cap rose 0.7%. Amazing: there were 388 new 52 week highs and just 34 new lows while Advance/Declines ranged from +1.5-2x. Bonds rallied for a second, albeit abbreviated session as per usual they had an early close ahead of the weekend. Since April 14th the long bond has been in a range of 4.47% to 4.43% and the 10 year note from 3.41% to 3.36%, both treading water but at least below 4.50% and 3.50% respectively, but that may all change with the big FOMC meeting this week – finally! Meanwhile Gold has had seven consecutive higher highs, all records above $1,500… surging to $1519.20 overnight and is now $1513.50 +$9.60! Meanwhile the manipulated Crude contract is at $113.16 +.87 and very near the April 11, rally high of $113.46…don’t you think the pump prices, as high at $5.60 in one Florida gas station will put a damper on growth…psychologically if for no other reason.

Global equity markets are mixed: GTSE -0.1%; CAC 40 +0.4%; DAX +0.6%; Nikkei -0.1%; Hang Seng closed but +1.1% on Friday!; Korean Kospi +0.8%; Indian Sensex -0.1%. U.S. Futures little changed: DOW +9; SPX +1.90; NDQ +1.25…this week will be like ‘Waiting for Godot’…or the Iceman to come.

As Rush Limbaugh (TB never thought he would be quoting him), used to say: another week of the American people and their budget being held hostage by the U.S. government as both parties play to their constituencies.

Face it we are in gridlock, global political systems in turmoil, a serious lack of jobs creation…do you really care if unemployment is 8.8% or 9.2%? No, not when the real unemployment rate is over 15%! How can we profess to be a consumer based economy and not worry about where the money comes from to pay for the goods we produce…ah, but the weak dollar will make our goods, much of which, for export at least, are produced abroad…but think it out…companies over there will lose business to Americans and from their own people so no country can be an island…least of all Great Britain, whose greatness is about as transparent as the Royal Family and the wedding events this week. At least we don’t have that to deal with although we have had several attempts at ruling aristocracies here…Bush’s, Kennedy’s, etc. That is not healthy in a democracy, or even a democratic republic is it?

How can the leader in the GOP be Donald Trump…because he is a ‘successful’ business man? Tell TB that a measure of success is screwing  anyone who ever backed your ventures…leaving yourself rich and them holding the bag. Tell him that if John McCain was not and is not a consensus builder in his own party, that The Donald will be able to  drive home to Congress that they must do his bidding? They will not! All of which makes it more obvious to TB that unless a REAL leader appears on the scene…something we haven’t seen in years…and that goes for Obama, who has a gift of words, but no real backbone to put them into action…implies that Obama will be reelected…stop groaning…remember he is the Devil you know…or would you prefer The Donald? Bachmann? Palin?…can’t even think of one person to toss out there for the Dems.

No wonder 75% of Americans polled are disgusted with Congress…mandate? Gimme a break!

So as TB said a couple of weeks ago: the market will go up! – until it doesn’t. You decide.

. . .  – – –  . . .    . . .  – – –  . . .

Hope your Passovers and Easter’s were good ones. For the markets of course, Friday was a ‘good one’ since they were closed!

Listening to our esteemed (sic) Senators on the Sunday talk shows left a lot to be desired about a solution to the budget crisis. If this is the best the ‘Gang of Six’ has to offer, heaven help us…the same old reheated pabulum! Still on that kick that tax increases are not necessary they will simply repeal some of the breaks. Hello? Do any of you recall 1986? Oh that was great…simplify the tax code and create three brackets…those three brackets, since lowered by Dubya’s tax cuts are all that remains of the simplification while the tax code has grown in length and complexity. Does any thinking person seriously believe you can beat highly paid tax lawyers and accountants at their own game when their livelihood depends on it? Reagan’s ‘taxes on a post card’…what a glorious dream that is as impractical as the Star Wars Defense, whose only good was that it destroyed the Soviet Union economically since they couldn’t risk the chance that it would work (sadly Dubya still believes it will work in spite of the fact that our enemies are in small clusters around the world…the latest place being Syria.

Greenspan has uttered just one thing that TB agrees with in years and it was last week on Meet the Press: you cannot balance the budget on spending cuts alone…the Bush tax cuts have to be repealed in entirety. Is it fair? Damned right it is: the wealthiest Americans got 98% of the benefit and would have to give it up. The alternative being proposed by the magnanimous GOP is that those receiving sustainance, education, etc. be made to absorb it. Do the wealthy care about education? Nope, private schools…health care? Nope, they can afford the insurance and the best medical care, and the list goes on and on, but one thing for certain it is the ‘path to prosperity for the top 1-2% of taxpayers.

Have a wonderful week…don’t let the Fed ruin it for you!

TB

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1 Comment »

  1. Yarnman said

    TB–When I ran my own business, I would project my best estimates for revenues, expenses, and profit (or loss) in an annual plan. Essentially, this is what Obama and the Congress did when they agreed at the eleventh hour a few weeks ago on the 2011 Federal Budget. Implicitly, that agreement showed a deficit figure that REQUIRED an increase in the Federal Debt Ceiling. So what’s the hubbub over increasing the debt ceiling, when it was agreed to implicity a few weeks ago? Why is the House being given a second kick at the cat? –Yarnman

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