12/19/11…another week till Christmas

This week’s economic calendar has a housing orientation with the highlight being November Housing Starts (Tuesday). We will also get November Existing Home Sales (Wednesday), the third estimate of Q3 GDP, the final December Consumer Sentiment, and November Leading Indicators (Thursday), and November Personal Income, November Durable Goods Orders, and November New Home Sales. Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA.


Bloomberg Top Stories:
*Goldman Sachs Wins CEO Money as Global No. 1 With MBA-Equity Deals in ’11 – but profits?

*Stocks in Europe Rise With U.S. Futures as Won Declines After Kim’s Death

*Europe Ministers Seek $261 Billion in IMF Crisis Funds as Confidence Ebbs

*Sarkozy Unheeded as ECB Funding Salves Banks Not Governments

*UBS Capital Strategy Converges With Credit Suisse in Fortress Switzerland

*Microsoft Shrinking Margins Loom as cloud Push Drives Higher Costs

*Putin’s Setback Exposes Gasprom as Communists Seek to Double Tax Payments

*Heineken Rescued by Dos Equis in U.S. Where Mexico Sells More Beer – WOW!

*Sino-Forest Defaults on Two Bond Issues After Failure to Release Results

*China Local Debts Dwarf Official Data Prompting Too-Big-to-Complete Alarms    

*Kim Jong Il Death Sparks North Korea Succession as South Braces for Impact

*Payroll-Tax Cut in Limbo as U.S. Lawmakers Brace for Fiscal-Policy Fight

*Warren Hellman, Private Equity Pioneer and Philanthropist, Dies at 77

Volume surged to a huge 4.7B shares, in a strong rally but with all major indices well below their 200 day moving averages. Meanwhile, NYSE stocks executed on the Big Board climbed to 1.79B shares, the first 1B+ day since 11/30 and highest since 8/8. 23 of the last 26 sessions have been less than 1B! Advance/Declines were solid: +1.7:1 on NYSE and +1.3:1 on Nasdaq. Breadth was similar +1.9x on NYSE and +1.4x on Nasdaq. New 52 week highs were 129 BUT new lows were  201! Go figure on an UP day??? The ratio is about 1.6x negative. VIX continued to decline closing at 24.29 -.82, the 12 month moving average and lowest since 8/3. Screwy!!!

Here are the results from Friday: Dow FLAT due to losing 29 index points on IBM!!!; Transports +1.5%; Nasdaq Composite +0.6%; Nasdaq 100 +0.5%; Russell 2000 +0.8%; NYSE Financials +0.4%  Leaders: BAC -1.1%; GE +1.3%; JPM +0.4%.

European equity markets up except UK, Asia weak due to death of Kim Il Jong: FTSE -0.1%; CAC40 +1%; DAX 0.8%; Nikkei -1.3%; Hang Seng -1.2%; Korean KOSPI -3.4%; Indian Sensex -0.7%. U.S. stock futures modestly higher: DOW +43 SPX +5; NDQ +10. Bonds slightly weaker: 10’s and 30’s still below 2% and 3% respectively. 10 yr 1.86% -1/8. RECORD low 9/23 of 1.6855%; 30 yr 2.85% +1/32; Long TIP 0.72% -3/16. 0.57% at high three weeks ago. The 5 yr TIP yields MINUS 0.89%! 10 yr -0.10%. 3 mo. Libor 0.57%, and 0.79% 6 mo. – 3 mo. above 0.50% and six month above 0.75%…climbing to yearend? Bills -0.01% one to three months. 6 months 0.04%.

Gold rose on Friday but remains below $1600. It closed at $1597.90 +$20.70 and is now $1604.90 +$2.30. This is the fourth day below the 200 day ($1620). The record high is $1923.70, a buying climax on 9/6. RES is 1720, the 40 day and SUP $1708, the 50 day m/a! Major Res at $1800-1806, the November highs. Crude rose slightly Friday but remains well below the 200 day ($95.88) and closed $93.53 -.34, and is now $94.35 +.82.  Major res is the 40/50 day m/a at $96.62-94.44.

…just when you thought we had more on our plate than we can handle…Euro crisis, U.S. economic problems, presidential campaign, etc. Kim Jong Il dies throwing Asia into a fit as a successor battle emerges and there will likely be some big-time muscle flexing.

After being out for a week, won’t even try to delve deeper.

. . .   – – –  . . . note that the same old SOS applies…perhaps more so!

If you watched the ‘debate’ on This Week yesterday, you have no doubts that the divide is not only still there between the right and left but the differences are so apparent but most people will readily identify with one side or the other…on the right they identify with the GOP despite the fact that if successful they will take away the things that most Republicans want and cherish.

Then on 60 Minutes the tearing down of foreclosed homes in Cleveland had two big issues: the banks say they can’t restructure the loans due to huge losses, yet within hours after foreclosure they are stripped of all fixtures including siding!

What was sad was the people whose homes are worth half of what they were yet feeling an obligation to continue paying on them at the risk of their own financial security. Some have told TB do otherwise would be breaking the contract. Really??? What does a bank or other corporation do when a bet fails to pay off? Walk away! Furthermore, in Cleveland and other places they kick out the occupants and then do not maintain them…what does that say? Not much good about their business sense or about America.

Hope you all have a great week!



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