Market Volatility Continues - This Week Upside , Next Week?

With the markets in a wild trading range over the past 5 weeks, the equity markets moved up about 5% this week. I believe this was only the second up week in the last 8. US Treasury Secretary Geithner went to Poland and tried to push the EU to get in front of the Eurozone's financial problems. Whether his nudge works, remains to be seen.

At times, it seems like the cycle will not end. One day the financial world is in a panic as Europe's sovereign debt problem pops up and cause problems in the financial markets. And the next the markets soar as the EU applies some type of temporary band aid solution. At some point something has to give. Some times it takes a crisis for governments to move. In 2008, after the TARP was voted down the Dow lost about 700 points. Maybe Europe needs something similar - a real crisis to force real action.

Has Negative Market Sentiment Gone Too Far?

Market sentiment was so negative of late. The Vix on MOnday went to 48. Highs not seen since the 2008 / 2009.

People every where keep asking me about the market. More so than at the bottom in 2008 / 2009. Everyone (Newstand guy, coffee guy, and the bagel guy, friends frm school) I talk to is worried.

As a contrarian, things rarely seem as scary in the equity markets as they do now. Maybe time to at least dip a toe in.

Wow

Well the last post was completely wrong. Just a bad call. The strength of the market in early summer (Nasdaq at 10 year highs) led me to believe that the stock market was looking ahead to much better times. Obviously the macro economic picture of bond market implosions in Europe followed by the debt fiasco in the US followed by the downgrade of the US credit rating has taken its toll. Full fledge bear market? Pretty close to there in the indices already.

at 2:30 PM today:

The Dow at 10,907, down 540

The Nasdaq at 2376 down 155

The S&P at 1126 down 73

Gold up 64 points

Portfolio Managers Scramble To Enter Bull Market

For what its worth I have not seen a stock market this strong or powerful since 1999. This stock market wants to go much higer at a very fast clip. Latest evidence? The ugly employment data this morning that had the markets down 150. But it did not stay there and stocks like Apple and Linked In are moving higher fast. Portfolio managers are underinvested awaiting the never arriving pullback. Huge strength in the tech sector leading the charge. But the advance is spreading out across board. The bears are trapped, as are those hesitant bulls. The economy? weak. No real growth to be seen. But the markets are sniffing something out. maybe next year we will have a mini boom/ Hard to know just that the smart money is moving rapidly into the US equity markets.The Nasdaq is at 10 - 11 year highs.

Thoughts to Those Affected by Tornadoes

You have to feel for all of the people affected by the tornadoes in the mid west over the past month. Also the tornadoes that hit the south. This has been a rough spring with over 1000 tornadoes so far. Thoughts and prayers to those affected.

Storms in West

You have to feel for all of the people affected by the tornadoes in the mid west over the past week. Also the tornadoes that hit the south last month. This has been a rough spring with over 1000 tornadoes so far. Thoughts and prayers to those affected.

Thoughts and Prayers With Japan

I feel for the people of Japan following the earthquake and the tsunami that ensued. The scenes on TV from the area are very saddening. I will post some web sites that I think may be able to help Japan in the days ahead.

Equity Markets Shift Concerns to Oil

The world equity markets have been on a tear to the upside since August. Since November, a second leg up has taken place. With the chaos started erupting in the Middle East first with Tunisia and then Egypt, the equity markets marched up without much of a hiccup. The thinking may have been that there was little blood shed (which of course is great) and that oil supply disruption was negligible. However with the unrest in Libya turning into a violent situation, the unknowns about world oil supply start to go up. Since world economies have been strengthening, questions about energy supplies could cause large oil price spikes. Already the barrel is up about $10 in the US. Gasoline prices have also followed suit.

A Benefit for Xavier Alumnus Mike Glover

On Saturday January 22nd 2011, there will be a scholarship fundraiser in the memory of LCpl. Mike Glover of the US Marine Corps at Xavier High School in New York City from 7 PM - 11 PM.

I recently read about Mike on Linked In as he was an alumnus of Xavier High School. From what I read, he exemplified the Xavier and Jesuit motto of "One for others" as a son, brother, uncle, grandson, friend and Marine. In these days when the term hero can be overused Mike personifies that definition sacrifice and living for others to his fullest. There is a beautiful video on the web site as well.

Details about the fund raiser can be found at

http://www.friendsofmikeglover.com/

I can think of few better causes to help.

Thanks

Tom Henderson (Xavier alumnus)

60 Minutes Interview With Ben Bernanke

I caught some of the 60 Minutes Interview with Fed Chairman Ben Bernanke last mnight and thought it was very well done. Bernanke is a smart guy and although he missed the housing bubble he seems to be addressing the problems in the economy with as much gusto as can be expected. However the Fed's tools are at times limited in their range so if the economy does not conitnue to improve other measures else where in the government arena may have to take place.

Reverend John J O'Brien - Memorial Mass Lexington, MA Saturday October 30, 2010 - 10 AM

This Saturday October 30, 2010 there will be a memorial mass for the Catholic priest Fr. John J O'Brien in Lexington, Massachusetts at 10 AM at Sacred Heart Church.

Here is a link with more information:

http://www.stbrigidlexington.org/webPage.aspx?FatherJohnOBrien

I thank the good people of Lexington for having the service.

Donations to help the great works that my uncle did and that the Passionists continue to do can be sent to:

The Passionists


Province Pastoral Center


80 David Street • South River, NJ 08882


Here is the web site that has a link to donate electronically as well:

http://www.thepassionists.org/Home.html


Thank you,

Tom Henderson (nephew of Fr. John)

John J O'Brien, C.P. Some Interesting Web Links

Here is a link from the Passionate's web site about John J O'Brien:

http://thepassionists.org/whats_new/2010/10/19/father-john-j-o%E2%80%99brien-c-p-1941-2010/

Here is a link titled " A Tender Care For the Poor":

http://www.saint-malachy.org/jjob1/424_ATenderCare%238.pdf

Here is a link on his book:

http://books.google.com/books?id=z7NxoN9SS90C&printsec=frontcover&dq=john+j+o'brien,+higgins&source=bl&ots=aqLsJO7JRe&sig=Tl0to8KYwuJoi5qOvd8r6xbkIAo&hl=en&ei=dzzETKP-LsH-8AbS-_mqBQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q&f=false

Reverend John J O'Brien

I will be shifting away from the financial markets over the next week. Thank you.

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The catholic priest Reverend John J O'Brien died on Friday October 15h, 2010 with his family and fellow priests and nuns around him. Reverend John O'Brien was a Passionist priest and beloved by so many. There are so many things to write about Reverend John O'Brien but for now I will just write information here about the wake and funeral:

The wake is for Tuesday October 19th, 2010 from 3:30 PM to 8 PM.

The funeral is for Wednesday October 20th, 2010 and begins at 11 AM.

Both the wake and the funeral are in Jamaica Queens at the Passionist monastery. The address is 8645 Edgerton Blvd, Jamaica, NY 11432.

For directions please visit the Passionists web site:

http://www.bishopmolloy.org/id87.html

Thank you,

Tom Henderson, (nephew of John O'Brien)

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January 10th 2011

I have thought quite often of my uncle over the past few months and continue to come up with so many ways to describe him and the work he did. I have heard so many kind words and eloquent eulogies about my uncle. So I thought I would compile a list of things about Uncle John that made him unique that I knew of and some of the great stories that my family have heard over the past few months. Over time, I will continue to add to the list. This will be a running list of the works he did and the ways he helped so many people by living as a holy catholic priest. We still receive letters from all over the country about his great works.

- He lived the life of doing God's work in everything that he did. Always put others before him. The sick, the infirm, the elderly, people in hospitals; anyone who lost a loved one. He always had the time to sit with people and listen to their problems. When he was called to do a funeral of someone he did not know too well he would sit for long periods of time listening to the family members tell stories. How did you know that John was listening? Well at the funeral mass he would recite all of the stories he heard. One woman wrote us that people who heard Father John speak at the funeral thought that he was a lifelong family friend. But often times he knew the family only in the days before the funeral. he got to know the family of the deceased so well that he " was one of the family."

- There was a story told at the funeral of a person who lost his sister in a car accident over 20 years ago. Some how Father John found the right words to console the family. But that was not all. In the ensuing years he would reach out to the family on the anniversary of the death. EVERY SINGLE YEAR. Father John would call, write a letter or in recent years email the family. Always remembering their difficult time from 20 years earlier. Amazing.

- I heard a story of a man who lost his child less than 10 years ago. This person told us that Father John had this amazing ability to console them. As I listened to this story I thought how could anyone come up with the right words followign the death of a child? I listened as this person told us how Uncle John was very unique even among priests with his ability to console. To this day I have no idea what Father John said and what he did to help the family. I can only think that it was absolutley the perfect thing to say.

Currencies

The US $ continues to take a hit and that has been a positive for US equities and for the commodities markets. Gold again is up and now has passed the $1300 mark. But if the US (via hints of quantitative easing or actually moving ahead with QE) continues to push the purchasing power of the dollar down is it accomplish anything? After all if the US$ drops by 1% vs a basket of international currency and then the stock market rises by 1% in terms of other currencies the US stock market is the same value. Also there is a chance that one country looking to quickly devalue could lead others to devalue and a currency race to the bottom ensues.

Perhaps the Fed really has no choice but to embark on QE. The economy seems to be growing but at a very slow pace. And recently there have been speed bumps along the way. The mini Euro melt down back in the Spring slowed down world growth. The US housing market remains in trouble even with the ultra low interest rates and the US unemployment rate remains stuck at close to 9.5%.

Speaking of the unemployment rate, the September data will be released on Friday. This is one week later than the normal release date. The usual release date is on the first Friday of the month after the one that the report is on. Since Sept 30th ended on a Thursday last Friday Oct 1st would have been the first Friday. But I can see the BLS's concern of getting accurate stats out in lieu of a hasty less accurate number.

Hurricane Earl

Hurricane Earl has the potential to affect the South East and the North East USA. Over the next few days, all eyes will be on Earl.

Besides the potential for damage to people, and property, one has to wonder if the financial markets will be affected at all. If it turns out worse than thought and the cost of the storm becomes large, then the financial markets could be adversely affected.

China And the US Decouple

Can the US grow without relying too much on China's growth and can China grow without relying too much on the US consumer?

Many US companies have expanded into China during their recent multi year growth surge. That has helped many US companies and their bottom lines. It also has helped US GDP. What happens if China taps on the breaks on all of their infrastructure spending and other spending that US companies sell right into? That will be important since China seems to be slowing its growth more than expected.

Also what happens of the US consumer stops buying Chinese goods? Will China then try to lower its currency to help offset this?

China and the US one fast growing, another slower growing but much larger. Both currently intertwined.

How to Help Haiti

Here are links that can be used to help the people of Haiti in their time of need. The first is catholic charities and the second is doctors without borders:

http://crs.org/

http://doctorswithoutborders.org/

Retail Activity Anecdotes Suggest Slightly Lighter Sales

Over the weekend I visited various New York City retail locations. I went into about 10 different stores. I spoke with floor sales personnel in each location. From what I gathered, the foot traffic was on the light side and those customers that were coming into the stores were sticking to the heavily discounted bargains. A few retail locations I walked into had no customers at all and these were in high volume foot trafficked areas. Some of the stores with low traffic were not offering much in the way of discounts. The electronics stores with large discounts seemed to be generating the highest foot traffic. But from my perspective, the customer traffic seemed low even in the normally busy streets of Manhattan. Not sure if this is a New York phenomenon or activity in other parts of the country was similar. Not always easy to decipher trends.

Tomorrow's GDP

Tomorrow's GDP may be one of the more important economic releases in quite some time in my view. The baked in the cake positive growth percentage seems like a 100% lock. I hate these 100% locks as it seems they often call for a surprise.

Great Britain just came out with a negative quarter which threw the markets for a loop. The US and GB have been closely linked throughout this economic "Great Recession" as bond legend Bill Gross calls it.

The Market expects a 3.2% growth (annualized qtr / qtr) rate of growth. Last qtr saw a decrease of 0.7%. Stay tuned for the number tomorrow. How much did cash for clunkers and the housing $8000 for first time buyers input into this equation? That is a huge question as C F C has already rolled off the books and the 1st time $8k help is scheduled to fall off soon.

Indonesia and The Philippines

I am so saddened by the devastation in Indonesia caused by the earthquake and the ensuing landslides. The Philippines have been affected by a Typhoon. Thousands of lives have been lost from these natural disasters. Thoughts and prayers from Americans go out to the victims of this terrible disaster. Here are a few of the countries that have offered assistance or are offering assistance to Indonesia : the U.S., Australia, Switzerland, Singapore, Turkey, South Korea, Germany, China, Qatar, UAE, Denmark, Thailand, Russia, Taiwan, and Norway.

I recommend the International Red Cross for anyone looking to help countries affected by these natural disasters. I am sure there are other agencies but they may take research to know if they are legit. Here is the web site for the International Red Cross:

http://www.ifrc.org/what/disasters/response/asia-floods/index.asp