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As goes January?

Foreigners and funds buy US stocks

Market clockwork from former times

Foreign investors and mutual fund shareholders were the primary buyers behind the Bear Market Recovery of 2009. Stock buybacks had disappeared, a significant modification in investor/issuer behavior that had been seen since 1982 and SEC Rule 10b-18.

The rally hit a peak in January 2010, reminding many of the saying, “As goes January, so goes the year”.

Q3 2009

US households save while Obama fiddles

Nancy Pelosi: two heartbeats from the Presidency, representative of less than 1/100% of American voters.

In Q3 2009, American households saved 4% of their income, a sharp increase from 1.5% in 2007 before the current financial crisis. Tax breaks in the “economic stimulus” package were directed to savings rather than consumption.

Private sector tax payers were incensed by the profligate behavior of the Pelosi-Reid Congress, which gave rise to the Tea Party Movement.

The coming storm:

Will gold protect you against inflation?

Will Obama's exit crash gold?

In 35 of the last 50 years, gold prices have fallen relative to inflation. On four occasions, gold has fallen 50% or more. Gold does not track inflation, but rather anticipation of hyper-inflation or war.

In 2010, gold prices were soaring, reflecting fear of inflation from fiscal excesses of the Obama administration and continuation of war in Iraq and Afghanistan. If Obama is a one-termer, gold prices could fall.

Featured articles on inside pages

Stock buybacks

Buybacks + options + hedge funds

Stock buyback programs are a legalized form of market manipulation, sanctioned under SEC Rule 10b-18 and that serve to drive up the price of a company's stock and to give false value to executive stock options.
More ...

Securities Analysis

Does ‘SEC Total Return’ protect investors?

Millions of investors put money for retirement into mutual funds selected on the basis of "SEC total returns" and the name of the fund. This article explains how the SEC allows funds to use this misleading statistic to the detriment of investors and to the benefit of fund managers. More ...

US Politics

Why are the Super-Rich often liberals?

If we are to believe the old adage that, 'people vote their pocketbooks', why are so many of the Super-Rich ardent supporters of the Democratic Party? Why do the liberal Super-Rich seem to act in a way that is so contrary to their selfish interests and economic well-being? Here I show how capital flow analysis of the Federal Reserve flow of funds accounts provides an answer to this apparent conundrum. More ...

US equities

GAO pooh-poohs a Boomer bust

In 2006, the GAO issued a report saying that the retirement of the Baby Boomers should not have a negative effect on stock prices. This article reviews the GAO reasoning and concludes that the conclusion is not credible. More ...

US Bonds

Bond demand exceeds supply for a decade

Over the decade, 1995-2004, the demand for US bonds of all types has surpassed new bond issues in eight of the last ten years. This is the reason that bond prices have held firm, even in 2003, when net new issues reached almost $1.8 trillion. More ...

World Economy

Signs of US losing its groove?

Thirty years ago, US income from abroad was more than double the amount of income that the US paid to the rest of the world. This year, or the next, this foreign income surplus may disappear forever. Is the US 'losing its groove'? More ...

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Stock Quotes

DJIA10343.91  chart +0.23%
NASDAQ2186.65  chart -0.17%
S&P 5001084.81  chart +0.11%

Ftse 1005275.44  chart +0.18%
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Eur To Usd1.28  chart +0.44%
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Gbp To Usd1.56  chart +0.44%

2010-08-13 13:04