Follow This Bouncing Ball
Follow this bouncing ball – it’s fun and scary.
The stock market soared 189 points today, being down most of the day, but surging at the end. Why?? Well, S&P said they would keep the AAA rating for MBIA and AMBAC (those bond insurance companies I’ve been talking about lately.) Why would S&P do that? Well, they said that those companies will be receiving enough money injection to cover their insurance payment obligations. Where are they getting the money? From the big banks of the
It’s kind of like the right hand paid the left hand, so the left hand can pay it back again. My opinion is that this will unravel in the future. It just smells bad.
What about the rest of the markets?
The bond market continues to its lumbering increase in long term interest rates. Oil is pushing back to the $100 level again. Stand by for higher gasoline prices. Currencies and Gold are sort of moving sideways.
VISA in the News Today…..
You’ll love this story. Please read between the lines where I haven’t interpreted it for you. VISA is coming out with an $18.8B IPO!!!!! (An IPO is an Initial Public Offering – whereby it sells shares in VISA to the public, and it anticipates getting about $18.8B in cash in exchange for those pieces of paper.)
Wealth Health Warning!!!!! Stay as far away from this opportunity as you can.
Why would VISA be cashing in on its biggest asset – itself, an ongoing cash generating machine? Why wouldn’t VISA owners just keep laughing all the way to the bank??? Well it’s simple, and I sincerely hope some of you don’t have to read any further to figure this one out.
VISA can read its economic future better than anyone else. They are seeing defaults on credit card payments picking up, and those defaults are predicted to be going to historic levels in the next couple of years. So what happens in a couple of years??? The company isn’t worth as much, that what. So, those clever VISA owners are going to cash in on their current value, and stick it to the investors who are buying its stock.
Current Home Sales
Home sales were 4.89M homes sold in January, down 0.4% from December. The median home price is $201,000, down 4.6% from one year ago. That doesn’t sound so bad does it? Well those sales are at the same level we were at 10 years ago. Still not so bad, you think? Well, in the sense that homes are still being sold, that is very good news. It’s just not enough homes to keep up with the supply of homes for sale, and that is the real bad news.
Here are today’s Numbers:
Dow Jones 30 Industrial – 12,570 (Up 189 points)
10 Year Treasury Bond – 3.90% (Up 0.11%) – longer term interest rates continue to climb.
Euro – $1.4830
Gold – $941 (Down $7)
Oil – $99.23 (Up $0.42) - closing in on $100 again???
Gasoline – $2.54 (Up $0.01)