FTÍ in absentia - MARKETS UP 2012!

[moon/Laura]

Frank can't be here... but his *thoughts* can be!



THE ECONOMY

There wasn’t much new information on the economy this week, and what there was could be interpreted in different ways; not too helpful in making predictions about the future. Let’s look at the following data from two points of view shall we? #tongue_smile#

Consumer credit jumped sharply in December, +$19.3 billion, more than twice what analysts had expected. Auto loans were a big part of the increase.

That’s good – consumers are more confident, less worried about losing their jobs, and it’s a boost for the manufacturing sector....right?

That’s bad – spending is increasing faster than income, the savings rate is going down, and besides, it was probably just a one-month burst due to holiday shopping.

The U. S. trade deficit with the rest of the world increased to $48.8 billion, a six-month high, as imports outpaced exports, which gained for the first time in three months.

That’s good – increased exports stimulate growth and create jobs. Higher imports are another sign of growing consumer confidence.

That’s bad – the continuing deficit puts upward pressure on interest rates and downward pressure on the value of the dollar. We’re increasing our dependency on foreign investors.

THE MARKETS

The markets seemed to run out of gas at the end of the week. The shortage of new economic data and those nagging European worries ganged up to end this year’s strong start. The declines in the major indicators were minimal; perhaps just a breather before further increases? The Dow [-0.47%; +4.78%], the S & P 500 [-0.17%; +6.76%], and the NASDAQ Composite [-0.06%; +11.47%] all remained solidly in the black for the year.

The big worry this weekend was whether the Greek Parliament would agree to a new round of austerity cuts in exchange for another round of bailout funds from the European Central Bank (ECB) and the International Monetary Fund (IMF). Even if the government signs off on the plan, there are worries about public acceptance and the effect on spring elections.

Given the Greek worries and the strong advance over the past month, it appeared that several areas were holding their breath pending new information. They included:

U. S. Treasury yields and prices were flat for the week; the yield on 10-year bonds hovered near the 2% level.

Mortgage rates barely moved; a $25 billion settlement fund from major banks may help some homeowners who are “underwater” on their mortgages.

The dollar value of the Euro (€) was stable; surprising given the uncertainties about Greece. Mario Monti, Italy’s prime minister, visiting the NYSE, was optimistic about finding a solution to stabilize the Euro zone.

In the petroleum sector, crude oil moved up, just barely under the $100 per barrel marker (closing Friday at $99.84), while gasoline continued its slow but steady increase to $3.48 per gallon as a national average.

Barron’s had an intriguing cover page this weekend: “DOW 15,000.” The subheading noted the following:#tongue_smile#

“If Europe gets its debt crisis under control and the U. S. economy keeps growing, we could easily see Dow 15,000 by the end of next year. American companies are in terrific shape, and history strongly suggests that stocks are ready to break to new highs.”....HEY THAT'S MY FUCKING STORY!!!!

The Barron’s cover got me thinking about several books that were published in the late 1990s with numerically-oriented titles like “Dow 20,000,” “Dow 30,000,” and “Dow 36,000.” Unfortunately, we never reached those optimistic levels; not even close....but we will

So, how likely are we to reach Barron’s more conservative target? At Friday’s close for the Dow - 12,801 - it’s about a seventeen percent hike to 15,000. That doesn’t seem too outlandish a goal by the end of 2013. Let’s use P/E analysis to see what it would take to accomplish it....shall we?

The current combined earnings level of the Dow (taken directly from the pages of Barron’s itself) is $896.47. Multiply that figure by the Dow’s current P/E multiple of 14.28, and you get the current level of 12,801. Assuming the same P/E multiple, the Dow’s earnings would have to increase by that same 17% to $1,050.42 over the next two years (14.28 X $1,050.42 = 15,000).

But, if corporate earnings do jump seventeen percent over the next couple of years (and the Europeans come up with something approaching stability), won’t the Dow’s P/E multiple likely expand as well? I think so; which may make 15,000 too conservative a target. If earnings reach $1,050.42, and the P/E multiple expands to just 16 times earnings, the Dow average would be 16,807. That’s a gain of more than 31% over the next two years!



If that scenario plays out, my guess is that most of the increase will take place in 2013, not this year. Why? For one, the results of the 2012 elections will be known, which is currently a burden on the market. Second, continued earnings gains and low short-term interest rates will likely pull some of the $2.7 trillion in money-market funds into stocks.


FAST FRANK'S FAST FINANCIAL FACT

According to a recent report from the Financial Research Corporation, the assets in all Section 529 education savings plans fell by 10.2% during the third quarter of 2011 to approximately $134.6 billion.....why>...SHITY MGT

[usaone]

[The Virginian]

FTI is back !

[Steady As She Goes]

Feb 13, 2012 15:48:10 GMT -5 The Virginian said:

FTI is back !

Really?

Where?

I see his words, but don't see any sign of him himself.

It's very sad that PB made their "official" decision on what appears to be hearsay instead of getting ALL the facts.

[Deleted]

There was an official decision? Curious minds want to know.

[Steady As She Goes]

Feb 13, 2012 16:08:01 GMT -5 ArchietheDragon said:

There was an official decision? Curious minds want to know.

I was talking about their "official" decision they (PB) made last year when FTI was banned. I don't know af any later "official' decisions made.

[moon/Laura]

"in absentia" means that FTI himself is not here- because he can't be.

yes, that's because some &%(#! with a grudge went and told a bullshit story to PB.
no, they will not reverse their decision.
no, PB doesn't care what the truth is.

[Steady As She Goes]

Feb 13, 2012 16:48:45 GMT -5 moon/Laura said:

"in absentia" means that FTI himself is not here- because he can't be.

yes, that's because some &%(#! with a grudge went and told a bullshit story to PB.
no, they will not reverse their decision.
no, PB doesn't care what the truth is.

How very sad for them

[moon/Laura]

i know, right?

[The Virginian]

They can ban us - but they can't stop freedom of speech!

[dothedd]

GOD BLESS AMERICA (MOON .. a flag would be nice.)

FTI



THANKS MOON ...

[Aman A.K.A. Ahamburger]

Feb 13, 2012 18:05:22 GMT -5 The Virginian said:

They can ban us - but they can't stop freedom of speech!

That's exactly it Mr.V... They can't stop us all!!!

Thanks again moon!!!

[Steady As She Goes]

So what the heck happened at 3:30 PM today that the markets decided to ... oh I don't know ... leap 80+ points

[bimetalaupt]

Feb 14, 2012 16:36:55 GMT -5 Steady As She Goes said:

So what the heck happened at 3:30 PM today that the markets decided to ... oh I don't know ... leap 80+ points

WShat 4:30 pm : Stocks staged a late rally that left the Dow and Nasdaq to finish at the neutral line and the S&P 500 to settle with only a fractional loss after all three had spent the session wrestling with selling pressure.

Market participants applied pressure to stocks in the wake of news that analysts at Moody's downgraded the debt ratings of several countries in the eurozone periphery. They also issued negative outlooks on France, Austria, and the United Kingdom. The headline acted as a reminder of the precarious conditions that persist in the eurozone even as efforts to restore conditions in flagging Greece continue.

Monthly retail sales were mixed. Overall retail sales for January were up 0.4%, but that's only half of the 0.8% increase that had been broadly expected to follow the flat rate posted for the prior month. Excluding autos, retail sales climbed by 0.7% to exceed the 0.5% increase that had been forecasted to follow a downwardly revised 0.5% decline in the prior month.

Export and import price data showed too little movement for traders to consider worthy of their attention. Business inventory data for December also failed to inspire; overall inventories increased by 0.4%, which is slightly less than the 0.5% increase that had been broadly anticipated.

Early losses were broad, but the stock market's slide was hardly steep. However, sellers were enticed to redouble their efforts with every failed rebound effort by the broad market. That trend took stocks to session lows late in the day, but without the command of any headline or catalyst buyers stepped in with some strong bidding once stocks stabilized narrowly beneath the depths set in the

[usaone]

Folks are buying on the dips. Bullish.

[Steady As She Goes]

narrowly beneath the depths set in the ...

In the WHAT ? ? ? ? ? ? ?

It's like the end of a scary movie that leaves the door wide open for the "to be continued" ....... LOL

maybe the answer will be in the sequel. I'm gonna need some

[bimetalaupt]

Feb 14, 2012 20:06:42 GMT -5 Steady As She Goes said:

narrowly beneath the depths set in the ...

In the WHAT ? ? ? ? ? ? ?

It's like the end of a scary movie that leaves the door wide open for the "to be continued" ....... LOL

maybe the answer will be in the sequel. I'm gonna need some

If we do not have a "Black Swan event" then the market will do well..No News is Good news esp. from Greek Street People and Brussels!!!

Just a thought,
Bruce

[Deleted]

FTI can have my log-in info.

[moon/Laura]

that would be against the PB ToS, i believe...

[Aman A.K.A. Ahamburger]

Exactly wxyz, TM is the man! FTI is close. How can they keep him banned for lies?? I don't get that. We can all prove that we never got a dime, and if Frank could move the markets, why would he be so wrong about gold so far??.... Sorry Frank, you know I think you're the man, but it does prove that you can't make the market do shit.. If you could, you would have dropped gold to $100 just to prove you know you wrong...

[Aman A.K.A. Ahamburger]

That's exactly it! However, as an homage to the guy for everything I will fly the bat on all my threads... Why Not?

[moon/Laura]

DOW RALLIES UP 1.2% for the WEEK....to a NEW 52 WEEK HIGH!!!

We have a wide range of participating stocks...not just financials leading the way!

Greece is being ignored on this go around and instead people are keeping their eyes (which they should) on good economic data and of course earnings!

Dow closed up Fri 149 pts...going into a 3 day weekend to 12949.8
S&P did the same up 1.4% to 1361.23
Nasdaq up 1.7% to 2951.78

With the 24% increase...a steady rise from the Oct lows already in place...joebun wants to know if we are going to back off?...a fair question...one which "I" will answer with a question#tongue_smile#

IF investors were worried about this market....now....would they not sell into any rally for profit taking?...like they have done in the past?...and Friday was a perfect day to do it...they did not!

BULLS ARE IN THE ASCENDING MODE NOW....TAKE OUT APPLE'S EARNINGS AND S&P's earnings growth goes from 6% to 3%.

CONSIDER WHAT IF APPLE HAD BEEN INCLUDED IN THE DOW BACK IN JUNE....INSTEAD OF CISCO....THE DOW WOULD HAVE BEEN AT....15,000 ON WED....WHEN APPLE HIT $526!

BREAK UPS ARE HARD TO(as the song suggests) BUT NOT ON WALL STREET!

"I" see Corning spinning off display technologies business...as well as Hartford getting a shellacking by Paulsons take over group....Abbott, McGraw Hill, and Kraft foods...its almost about time for people to move up from macaroni and cheese so that one make sense#tongue_smile#

SO?...why should you care?...these moves are easier to understand....typically after a stock "spins off"....it is measured to go up on average 9.7% vs...2.2% for the stock it left behind!
When Marathon split it added $2 Billion in market cap which resulted in a 5% increase!

With spin offs you get possible M&A activity cause with all that cash dieing to go to work....these spin offs are 3 to 4 times more likely to be take over targets....more so than average company

[Aman A.K.A. Ahamburger]

German lawmakers approve new Greek bailout after Merkel says benefits outweigh risks
www.canadianbusiness.com/article/72928--german-lawmakers-approve-new-greek-bailout-after-merkel-says-benefits-outweigh-risks

[The Virginian]

DON'T BE A DICK-IT'S WEEK SIX OF THE "NEW" STREAK!
As the "wave" of money begins to re-enter the markets...for varying reasons....it is important to keep re-allocating and managing the risk

Total inflows to long-term mutual funds were $11.90 billion for the week

Equity funds had inflows of $1.04 billion for the week, compared to estimated inflows of $3.64 billion in the previous week

Domestic equity funds had estimated inflows of $35 million, while estimated inflows to foreign equity funds were $1.01 billion....go figure

Hybrid funds had inflows of $2.66 billion for the week, compared to estimated inflows of $2.49 billion in the previous week

Bond funds had inflows of $8.20 billion, compared to estimated inflows of $7.05 billion during the previous week.....HELLO CAN YOU HEAR THE FOOTSTEPS OF THOSE ABOUT TO BE TRAMPLED?

Taxable bond funds saw inflows of 6.46 billion, while municipal bond funds had estimated inflows of $1.73 billion....love this one!

Sorry for the brevity...but there's not too much here we didn't already anticipate...call me at 13,800

[dothedd]

Feb 28, 2012 3:20:06 GMT -5 Aman A.K.A. Ahamburger said:

German lawmakers approve new Greek bailout after Merkel says benefits outweigh risks
www.canadianbusiness.com/article/72928--german-lawmakers-approve-new-greek-bailout-after-merkel-says-benefits-outweigh-risks

Aham, did you see this on TV?

I feel sad for both!

newsfeed.time.com/2012/02/28/waiter-accidentally-dumps-beer-all-over-angela-merkel/

You have a message on NVAX.

dot

[Aman A.K.A. Ahamburger]

Nice one V!

That's classic DOT. You do feel bad for them. However, maybe the waiter was part of this Anonymous group..

8:30 am sharp GDP number, should set the tone for the morning anyway.

[moon/Laura]

THE ECONOMY

A lack of bad news and some slight improvements in U. S. housing and European debt were enough to keep the economy’s momentum moving forward. Specifically:

In the housing sector...January new-home sales were +3.5% higher than last year.

The inventory of unsold homes declined to 6.1 months, the lowest since spring 2006.

A senior economist from the Vanguard organization said, “The numbers are encouraging, although it’s not clear they will translate into higher home prices until the large inventory of distressed and foreclosed homes clears.”

In the Euro (€) zone, Small steps forward as Greece accepted new austerity measures, and bondholders seemed willing to swallow “haircuts” of 75% on their existing Greek debt (ouch!). #tongue_smile#

More ECB and IMF bailout money should enable Greece to meet a refunding deadline on March 20. "I" TOLD YA SO!

Initial jobless claims held steady at 351,000 for the week. The four-week moving average dropped 7,000, but we’ll need those numbers to improve quite a lot if we want unemployment to come down.


Bottom Line: In some areas we’ll continue to “bump along the bottom,” but I’m starting to see consistent progress in some of the worst-hit areas from the Great Recession. Even a little progress on housing prices would give a big psychological boost to consumers and the economy overall.

THE MARKETS

The trading week was shortened by the President’s Day holiday, but the markets still managed to add a bit to their already strong gains for the year so far. The Dow Jones Industrials [+0.26%; +6.26%], the S & P 500 [+0.33%; +8.60%], and the NASDAQ Composite [+0.41%; +13.77%] all edged higher.

As far as what’s moving the markets, the good news from Europe seems to be outweighing the bad news coming from Iran and the Middle East. Optimism for a settlement of the Greek debt crisis is pushing the Euro (€) higher versus the dollar and driving the averages upward as well.

The S & P 500’s P/E multiple continues to edge higher, closing Friday at 14.8 times trailing twelve-month’s earnings. If we get a reasonably good report on GDP this coming week, the averages could move up another notch or two....and is back to Aug 2008 levels

Interest rates (and prices) remain becalmed in both the Treasury and mortgage areas. With inflation low and the FED locked in at near-zero short-term rates, there’s no reason for rates to move higher at this time. I think the status is likely to remain quo for another month or so.

By late March we’ll know whether the Greek situation has been resolved, at least for the near future, and in early April we’ll start to get 1Q earnings reports. If those are strong, we’ll see double-digit gains in all of the major indicators.

In the oil sector, my guess is that concerns about Iran cutting off oil supplies are more hype than reality. The basic supply-demand equation still favors supply, and they need the oil revenues as much as we need the oil. There will be more posturing and finger-pointing, but I’d bet the oil will continue to flow....look for prices to ebb today

Even the remote possibility of supply difficulties seems to have given retailers an excuse to increase the price of gasoline, however. A gallon of regular unleaded has gone up about thirty-three cents since the beginning of the year. The national average price is now $3.59 a gallon.

Could politics spoil this rosy scenario? Possibly, but right now neither party seems anxious to put anything in the way of a continued recovery for the economy, or more gains for the markets. There’ll be a lot of talk between now and November, but don’t expect any real action until 2013.

FAST FRANK'S FINANCIAL FACT OF THE WEEK

According to Morningstar (www.morningstar.com), 79% of large-cap mutual fund managers were not able to outpace the S & P 500 stock index. It was the worst showing for the funds since 1997.

One reason was that managed funds had an average expense ratio of 1.3% of assets, while index funds averaged 0.69%....of course that's not true IF your managed funds have expense ratios that are lower

[usaone]

Q4 GDP revised HIGHER to 3%.

Fed Beige Book at 2pm today.

[Aman A.K.A. Ahamburger]

GDP UP
JOBS UP
Housing Recovery in the making..

Dow 15K on the way!!

[Aman A.K.A. Ahamburger]

You got that right wxyz! We like to keep the wings o flappin'