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  Jim Kingsland

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  General News, Jim Kingsland Market Commentary

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  10/16/12

  Coke’s revenues were off by $100 mln (pretty insignificant) while earnings managed to meet expectations. Its stock is down a tad. The blame goes to a strong dollar for the short of expectations revenue. Soon enough worries about a strong dollar shall be harder to come buy as paper currencies weaken in general. But rest assured, Coke still sells plenty of Coke.

  Goldman Sachs, ever doing God’s work, showed up this morning with EPS that beat Wall analyst expectations. It stock is a scosh higher as a lot of love has been lost on that issue. Wall Street giving it its “who cares” stamp of approval.  But it is all enough to get Wall Street’s Dow up another 100+. A friend of my wife had quite the outburst on Facebook about health insurance at Goldman . Apparently her husbank being a mere mortal VP, or rank and file non partner has been warned about 2013 rate increases. My wife’s friend, that would be the wife of the Goldman VP, had some unkind words about the middle class, though I always thought of the couple has been in the upper middle class.  I guess appearances are deceiving.   

  Citi’s chief Vikram Pandit is out… just like that. Clashes with the board are cited. What could have soured relations? The 88% drop in last quarter’s profit?? Lol. I’d wonder about anyone who would want that job of running a walking zombie of a bank. It would either be ego driven motivation, or someone who wants the power as the big Kahuna CEO. Ok, both reasons are ego driven. Hey, that sounds like anyone who would run for the White House! Citi tried out the air above $37 ($37.70, yet the stock has gone nowhere since the big 1 for 10 reverse split), but the air for now was too thin. Pre reverse split it’s as if this C stock is still below $4 a share. Yikes!

  Remember, QE remains in the mix. While Citi may have exhausted its headline stock moving news for now, banking stocks going forward are still the intended target of Fed largess. QE will over time destroy the Fed balance sheet, but shall rid the banks of much of their bad mortgage paper, which banks get to categorize as far more than the junk paper is really worth, and shall be bought by the Fed for much more than it’s worth of basically ZERO. But that’s the thing about Bernanke, he’ never seen a shred of worthless paper that he doesn’t considered valued at par-100!

  Related: SHEILA BAIR: The Board Made The Right Decision, Pandit Didn’t Know How To Execute http://read.bi/PzUJNq

  That get’s us back to gold. It has admittedly drifted back to the level of where it was before  QE3 was announced. I still favor gold as it is the natural alternative to the QE mindset.

  I want to repeat what I presented later in the day yesterday concerning inflation. Here is an anecdotal sample of inflation through a note found on a web forum. In the real world, at the supermarket, prices have doubled and tripled in just the last  8 years.

  “I found an 8+ year old grocery store receipt on the weekend. Wow…

  1st thing I noticed, my wife and I have hardly changed anything about our buying and eating habits.

  The 2nd thing I noticed was the crazy increases we have had in prices.

  1 can Campbell’s Vegetable soup was listed as $0.89
  We now pay $2.19 for the same can.

  Fresh Haddock Fillets were $3.99lb. Now $7.99lb.

  4 litres of Skim Milk was $4.59…now $7.59.

  1 loaf of whole wheat bread was $.99…now $2.99.

  Fresh Green Pepper was $1.99lb…now $3.99lb.

  Canned tomato juice was $0.99 a can…now $2.29 a can.

  Obviously there was waaaaay more on the receipt, but I just can’t believe the inflation. I’m sure many people have had to stop buying items they are used to buying, and change their life styles a great deal. I have not gotten to that point yet, but I’m feeling the pinch. It sucks. Changes are needed.” 

  Jim Again. NB. I corrected the spelling errors.  It’s amazing how bad spelling gets as you dig through the web. Did these bad spellers skip every English class during their school careers? I digress.

  Last week the government told us the PPI rose by more than 1 percent in September. The CPI, reported today, for September including energy rose .6 percent, or 7.2% annually. I’m sorry, the core CPI gain of .1% is not worth analyzing. Unless you are in a very urban area, chances are you are a purchaser of gasoline. The increases in gasoline, 7% in September and 9% in August are just too large to factor out when one speaks of inflation. We were lucky this past month, as food prices only rose a scant .1%. Thus far the government’s scare forecast of a coming hog price surge and the summer dough affecting corn have yet to materialize.

  Worth Noting…

  What’s green is really blue. Electric Car Battery Maker A123 Systems Files Bankruptcy http://bloom.bg/R82yXJ via @BloombergNews

  More rumors that Moody’s is getting ready to downgrade Spain to junk. That would cast a brief pall on this little rally of the last few day in stocks.

  Rumors of a mini bailout of Spain have been denied.  

    

   

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