|
HIGHWAY ROBBERY OR TRICKS AT THE TROUGH?
Way
back on Sept. 25 – in this very space – we were “early to the
party” with a piece titled Running
On Empty where we examined the effect of Goldman Sachs recalibrating
their vaunted Commodity Index [GSCI] to have a lower weighting.
We
pointed out how this thinly veiled attempt at partisan financial
engineering was well timed with the run-up to the mid-term elections. In
the month since the election, here’s a quick summary of what’s
occurred in the energy complex:
-
since
falling from a high of 78.00 and subsequently bottoming at
approximately 55.00 per barrel, crude oil has rebounded quite
sharply in the weeks following the election to 63.00 per barrel at
the time of writing.
-
the
wholesale price of gasoline which found a “bottom” at 1.46 per
gallon just before the election has now recovered to 1.69.
-
even
natural
gas, which saw its price plunge to the 4 dollar range [in the
process bankrupting hedge-fund behemoth, Amaranth] before recovering
to this morning’s 8.26.
If
any lesson is to be gained from any of this, one of the most pertinent
and poignant is that it magnifies the short comings of Central Planning.
On that note, we should all be aware that history reminds us that one of
the most distinguishing hallmarks of a Central Planned Economy is
“bottlenecks” and chronic shortages of base commodities; much like
the developing and ongoing shortages
that are manifesting themselves in the base metals copper, aluminum,
nickel, zinc and lead.
We
can only hope that lawmakers and regulators have taken note.
With
Black
Friday and Thanksgiving festivities now in the rear-view-mirror,
Wall Street’s and the main steam financial press’s attention has
expressly turned toward holiday [retail] sales. This data is closely
monitored by analysts because it accurately measures the willingness of
the average Jane and Joe to spend money [or go further into debt,
perhaps].
Strong
start - for some
Wal-Mart sees sluggish sales for November, including Black Friday
results. But others see healthy business.
November 26 2006: 11:06 AM EST
NEW
YORK (CNNMoney.com) -- Wal-Mart Stores Inc. predicted surprisingly weak
November sales on Saturday, but a survey of thousands of retail
locations pointed to a relatively healthy start to the holiday shopping
season.
Wal-Mart
estimated that November sales fell 0.1 percent at its U.S. stores open
at least a year - the forecast includes sales on Black Friday. At the
same time, a survey by ShopperTrak estimated a 6 percent sales increase
overall for the day, to $8.9 billion….
 Wall
Street Wallows in Wild Windfalls
While
visions of sugar plums [or Bentleys, perhaps?] dance in their heads,
it’s been widely reported over the past week that the Big 5 - Goldman
Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman
Brothers Holdings Inc. and Bear Stearns Cos. are now – no doubt -
faced with the most daunting task of their pressure packed year; namely,
how to divvy up $36 billion in bonuses amongst their 173,000 employees.
Wall
Street’s Wild Windfall
The
average windfall for each individual at the five largest U.S. securities
firms will be enough to buy a $165,000 Bentley Continental GT, the
two-door coupe favored by Paris Hilton and Cher. They'll have plenty of
change for a box of Romeo y Julieta cigars and a case of Pol Roger
champagne - the stuff enjoyed by Winston Churchill, Britain's prime
minister in the 1940s and 1950s.
Wall
Street's wild windfall
Earnings
help NYC cut estimated deficit as brokerages' $36B in bonuses prime pump
for luxury-goods sales
BLOOMBERG
NEWS
November 7, 2006
Never
in the history of Wall Street have so many earned so much in so little
time.
Goldman
Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman
Brothers Holdings Inc. and Bear Stearns Cos. are about to reward their
173,000 employees with $36 billion in bonuses. That's a 30 percent
increase from last year's record, and it doesn't include the billions
more that will be paid by Citigroup Inc., Bank of America Corp. and
JPMorgan Chase & Co., the three largest U.S. banks, as well as the
hundreds of hedge funds and private-equity firms that constitute the financial
industry…
Speaking
Of Wealth Transfers…
For us
mere mortals, let’s not forget that December is time for tax loss
selling! For those of us who have the “odd loser” to augment our
basket of winners for the year – this strategy
can be an effective way to shelter some of our gains as well as provide
an opportunity to upgrade / rebalance our personal investment
portfolios.
“If
you have sold some assets and realized capital gains in the year, and
you are holding other assets with unrealized losses, consider selling
them as well. This will allow you to realize losses to offset the
capital gains.”
You
might want to include this topic, and its potential application in your
own personal situation, in your year-end discussion / portfolio review
with your financial advisor.
Today’s
Market
Overseas
equity markets began the week on a quiet note with Japan’s Nikkei
Index giving up 18 points to close at 16,303. Meanwhile, North American
markets soared with the DOW ahead by 89.72 to 12,283.85, the NASDAQ up
35.20 to 2,448.40 and the S & P gaining 12.40 to 1,409.10. NYMEX
crude oil futures fell .99 to 62.50 per barrel.
On
foreign exchange markets, the U.S. Dollar Index was unchanged at 82.42.
Interest
rates were unchanged from Friday’s close with the benchmark 2-year
bond ending the day at 4.52%, the 5-year at 5.38% and the 10-year at
4.43%.
The
precious metals day spent much of the day mixed, with COMEX gold futures
finally ending the day with a .10 gain to 646.20 per ounce while COMEX
silver futures added .08 to end the day at 14.12 per ounce. The XAU
managed a gain of 1.68 to 148.82 while the HUI Index added 6.34 to
360.22.
On
tap for tomorrow, at 8:20 a.m. revised Q3 Productivity data is due –
expected +.6% vs. prior 0.0%. At 10:00 a.m. Oct. Factory Orders data is
due – expected – 4.2% vs. prior + 2.1%. Also at 10:00 a.m. November
ISM [Institute for Supply Management] Services Index data is due –
expected 55.0 vs. prior 57.1.
Wishing
you all a pleasant evening and happy holiday shopping!
Rob Kirby Back
to Top
|
