Newsletter of Economic and Market Events

Year of 2012

Dow 2012: 12,217.56 to 13,104.14
Dow return for 2012: 7.26%

S&P 500 2012: 1,257.6 to 1,426.19
S&P 500 return for 2012: 13.41%

NASDAQ 2012: 2,605.15 to 3,019.51
NASDAQ return for 2012: 15.91%

10 year Treasury: 1.76% yield down -5.9%, prices up
World Equity Market: $52.12 trillion up 11%
MSCI Europe Index 829.52 up 15.65%
MSCI Asia Pacific Index 129.36 up 14.66%
S&P Latin America 40 4,257.23 up 2.94%
MSCI BRIC 297.29 up 11%
S&P Middle East & Africa 312.11 up 17.72%

Best Investments in 2012

    U.S. Total stock market returned 14% in 2012, Stocks had above average gains, Bonds had below average gains and inflation was average 2.5%. Big corrections in May (around Greek elections) and late October through early November (around U.S. elections), most of the rest of the year had gains.
    Of the 5 largest sectors in the U.S. Economy: Financials 28.4%, Healthcare 17.5%, Technology 15.7% and Real Estate 13.2% outperformed while Natural Resources returned 5.2%. By size: Large Cap returned 13.4%, Mid Cap 16.1%, Small Cap 14.8% and Micro Cap 17% all had above average gains. Gold up 7% while oil fell -6.3% with commodity prices (CRB) down -1.5%.
    Global markets rose by 13.5% of the World's largest economic regions: Europe 15.6%, Asia 14.7% and Emerging Markets 11% while Latin America only up 2.9%. Of the World's largest Developed non-U.S. Economies: Germany 29%, Japan 22.9% and France 15.2% while Britain 5.8% and Canada 4%. In the Emerging markets India 25.7% and Russia 10.9% while Brazil 7.4% and China 2.4%. Hedge funds 4% and Private Equity both underperformed market indexes.

   Those who diversified with MPT did best, a trend which should accelerate – indicative are the returns in U.S and across the globe.

    Separate yourself and your performance from retail investors by using Modern Portfolio Theory (MPT) and Tactical Portfolio Optimization. Institutional investors have for decades spread their investments across many asset classes seeking higher returns. Underperformance is caused by confining your investments to a few similar asset classes and neglecting risk management.

2012 complete News (click)
Months 2009-12 (click)


U.S. unemployment at 7.7% to 8.3% remained a major concern. 2012 gdp 2.5% with 1.65 million jobs added.

FOMC neutral stance (Dec 13) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

Federal Reserve extends QE2 (6/20, Operation Twist) through 2012. FOMC to sell $267 billion Treasury securities of less than 6 years and purchase 32% (6-8 yrs), 32% (8-10 yrs), 4% (10-20 yrs), 29% (20-30 yrs) and 3% TIPS (6-30 yrs).
- Federal Reserve (9/30, QE3) will "increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month [and] continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee's holdings of longer-term securities by about $85 billion each month through the end of the year".
- Federal Reserve (12/12, QE4) will "continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month".
- Federal Reserve extends (12/13) dollar liquidity swaps to foreign central banks through February 2014.

Treasuries returned 5% in 2012, 9.6% in 2011, 5.9% in 2010, up from -3.7% in 2009 and 14% in 2008. 30-year fixed mortgages fall to all time low 3.31% (11/21). 2yr Treasuries trade 0.1933% (7/23). 10 yr U.S. Treasuries trade 1.379% (7/25, April 1946 1.54%) and 30 yr U.S. Treasuries trade 2.4454%.

CRB trades 502.7 (6/4) down 26.2% from the all-time high of 688.3 (Mar 7, 2011).

U.S. real estate markets bottom, hardest hit: Las Vegas -61.7% (8/06-3/2012), Phoenix -55.9% (6/06-9/2011), Miami -51.2% (12/06-4/2011), Detroit -49.3% (12/05-4/2011), Tampa -48.0% (7/06-2/2012), San Francisco -46.1% (5/06-3/2009)...least hit...Denver -14.3% (8/06-2/2009) and Dallas -11.2% (6/07-2/2009).

Obama signs JOBS (Jumpstart Our Business Startups) Act (4/5) - 500 private company shareholders rule to 2,000 before having to publicly disclose certain financial information. Enables crowd-funding, $1 million ceiling annually. General solicitation, permitted only for accredited investors in Reg D offerings. Private emerging growth companies (EGCs, up to $1 billion in annual revenue) going public exempt from many disclosures, reporting and governance rules may operate for up to 5 years without an independent audit.
- Obama signs (6/29) Surface Transportation Extension Act of 2012, $127 billion through 2014. Transportation spending to save 1.8 million infrastructure jobs and create 1 million jobs with federal loan guarantees. Postpones federal student loan interest rates doubling from 3.4% to 6.8% (on July 1) for 1 year at a cost of $6 billion for 7.4 million students. Extends funding for the National Flood Insurance Program through September 30, 2017 (expiring July 31) to protect 5.6 million households and businesses.
- Obama signs Welfare Integrity and Data Improvement Act (2/22) - $89 billion, extends the payroll tax holiday (4.2% instead of 6.2% on first $110,100 in wages) for 160 million workers and long-term unemployment compensation benefits through 2012. Averts a 27% cut in payments to Medicare physician ($50 billion, paid for) through 2012.

U.S. Supreme Court (6/28) upholds much of Obamacare by establishing the individual mandate penalty to require Americans to buy healthcare insurance in 2014 as a tax.

European Central Bank (7/5) cut its lending rate to a record low 0.75% and its overnight deposit rate to 0%. Bank of England (7/5) to purchase £50 billion ($78 billion) of assets (adding to £325 billion of quantitative easing).
- ECB (3/2) offers €529.5 billion ($712.2 billion) for 1,092 days (LTRO2) to 800 of 2,267 eligible financial institutions. ECB's balance sheet rises to a record €3.02 trillion euros ($3.96 trillion).
- EU (3/30) establishes €500 billion European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) €200bn of Irish and Portuguese funding and €102bn for Greece, lending total of €800bn.
- European Central Bank (9/6) creates an unlimited emergency sovereign bond buying program OMTs (Outright Monetary Transactions) in secondary markets - strict conditions are attached to the aid. ECB under Securities Market Program (SMP, terminated) has €209 billion of government bonds on its books ESM launched Oct. 8, €500 billion, contributions: Germany 27.15% France 20.39% Italy 17.91% Spain 11.9%.

Greece (2/21) secures €130 billion second bailout through 2014. Greece (7/21) receives a €110 billion ($157 billion) restructured EU/ECB/IMF aid package - Greek Parliament approves budget to receive aid.
- Greece's bond swap has triggered a credit event (International Swaps and Derivatives Association, 3/9). Greece activated its collective action clauses (CAC) to force creditors to accept private sector involvement (PSI) on loses of €199 billion of €205.5 billion in bonds regulated by Greek law. Credit default swaps insuring Greek debt will payout about $0.785 to 4,369 outstanding contracts $2.89 ($3.18 net) billion of Greek debt. Greek 10-year Bond yields 44.212% (3/9) falling to 18.45% (3/12).
- Greek bondholders tendered (12/11) more than €31.8 billion receiving €11.2 billion (average price $0.338), Greece's 5 biggest banks participated in buyback.
- Greece to receive €43.7 billion in 3 installments through Q1 2013, to pay €34.3 billion installment by December 13. Greece's debt from 190% gdp in 2014, to 124% gdp in 2020, and "substantially lower than" 110% gdp by 2022. Reduced interest on existing loans to 50 basis points above financing costs (down 100 bps) once Greece achieves a primary budget surplus of 4.5% of GDP, an extension of Greece's bailout maturities by 15 years, and a debt-buyback operation (€11.2 billion) to private-sector Greek government bond-holders.
- Portugal gets €78 billion bailout package (5/14, €12 billion for banks).
- EU banks hold $147 billion of Greek sovereign bonds and $115 billion of Portuguese and Irish debt - 5% of annual European Union gdp.

Peripheral European stock exchanges suffer major losses: Greece's index falls to 471.35 (6/5) down 67.7% from its 3/9/09 low of 1,457.83. Portugal's index falls to 4,371.74 (6/14) down 23.2% from its 3/9/09 low of 5,696.46. Spain's index falls to 5,987.80 (6/4) down 11.6% from its 3/9/09 low of 6,771.70. Italy's index falls to 12,295.76 (7/25) 0.3% below its 3/9/09 low of 12,332.00. Spain's 10-year Bond yields 7.751% (7.25).

Mergers and acquisitions $2.19 trillion in 2012 down from $2.26 trillion in 2011 and the same $2.19 trillion as 2010. Venture capital of $28 billion in 2012 similar to $28 billion in 2011 and $23 billion in 2010.

EU (10/27) agrees to sovereign debt crisis fixes: private holders of Greek debt accept a 50% writedown, European Financial Stability Facility (EFSF) leveraged to €1 trillion, 70 EU banks required to increase core capital levels to 9% and recapitalize (by June 2012) raising €106 billion in new reserves.
- The €440bn EFSF (European Financial Stability Facility) bail-out fund can now help countries not currently getting bail-outs, including precautionary lines of credit, the ability to recapitalize any struggling bank in the Eurozone, and buy bonds on secondary markets in "exceptional" circumstances (subject to the approval of the European Central Bank).

PBOC (7/5) lowers its 1 year lending rates to 6.00% and deposit rates to 3.00% and lowered its RRR (required reserve ratio, effective 5/17) to 20.5%.

$25 billion historic U.S. settlement (2/10) - Bank of America $11.8 billion, Wells Fargo $5.35 billion, JP Morgan $5.29 billion, Citigroup $2.2 billion and Ally $310 million for multiple mortgage violations.
- Barclays settles (6/27) £290 million ($452.3 million) fraud to U.S. and U.K. for manipulating Libor (benchmark rate for $360 trillion) hiding their true cost of borrowing.
- Bear Stearn's former 7 executives including James Cayne and Alan Schwartz settle (6/7) a State of Michigan Retirement Systems led shareholder lawsuit (12/14/06 to 3/14/08) for $275 million for misleading investors about BS's business and financial well-being.
- R. Allen Stanford (6/14) sentenced to 110 years for conspiracy, wire and mail fraud, obstruction and money laundering in $7 billion Ponzi scheme. $330 million of Stanford funds in 29 foreign bank accounts, almost $3.5 billion in claims.
- Visa, MasterCard and their issuers (7/13) agreed to a $7.25 billion in the largest antitrust settlement with 7 million merchants over credit and debit card fees.
- Bank of America settles $2.43 billion lawsuit with investors who suffered losses during its acquisition of Merrill Lynch.
- Standard Chartered (12/10) settles $327 million with U.S. authorities (transactions 2001-07) with Iran, Burma, Libya and Sudan.
- UBS settles (12/19) $1.5 billion (incl. record CFTC $700 million) fine, rigging LIBOR and U.S. criminal charges against 2 former traders.
- HSBC record $1.92 billion settlement (12/11, $1.256 billion to Justice Dept. and $665 million to U.S. regulators) violating the Bank Secrecy Act and the Trading With the Enemy Act, drug lords in Mexico and firms linked to Iran, Cuba, Sudan, Libya and Myanmar.

AIG (12/11) ends Treasury's equity ownership (6th offering since 2008, $182.3 billion bailout) for $7.6 billion ($22.7 billion profit), leaving Treasury only holding AIG warrants.
- AIG settles (10/22) $300 million, in 2012: MetLife settles (4/23) $500 million in multi-state Life insurance claims (inforce 1992-2010) - Nationwide (10/11), Forethought Group (10/8), John Hancock (4/22) and Prudential Insurance (1/13). Life Insurers agree to check SSA's Death Master File to hand unclaimed money over to beneficiaries or the State's controller's unclaimed property division.

Whistleblower IRS payout (9/11) $104 million to convicted UBS employee Bradley Birkenfeld (conspiracy, June 19, 2008 40 months). $96 million (October 26, 2010) Justice Department award to Cheryl Eckard, GlaxoSmithKline employee helped $750 million settlement for manufacturing deficiencies.
- IRS (6/26) collects over $5 billion in back taxes, interest and penalties from 33,000 taxpayers hiding in offshore accounts under two amnesty programs.

BP (3/2) offers $7.8 billion settlement for 120,000 claims - already $8 billion paid to individuals and $14 billion paid for cleanup.
- BP's $4 billion Government settlement (incl. largest criminal penalty $1.256 billion) and $525 million to the SEC and pleads guilty to 11 manslaughter felony counts related to 11 deaths. Pfizer paid $1.195 billion of $2.3 billion settlement in September 2009 over the fraudulent marketing of anti-inflammatory arthritis drug Bextra.
- GlaxoSmithKline settles (7/2) U.S. criminal and civil fraud charges, a $3 billion fine for fraudulently marketing its drugs.

Drought effects 1,496 counties in 32 states, 62% of the lower 48 states have moderate to extreme drought. Qualified farm operators are eligible for low-interest emergency loans which may cost $12 billion. 85% of farmers have crop insurance, in 1988 25% were covered in the last worst drought. $68.7 billion paid out from 1989 to 2009. In 2011 (with a drought in Texas) a record $10.8 billion paid ($4.5 billion premiums collected). Corn trades (8/10) high of $843.8 bushel.
- 10/29 Hurricane Sandy a historic Atlantic storm slams the Eastern seaboard landing in New Jersey. 122 people in 8 states die, over 8 million without power, around 40,000 people displaced from their homes, closing the NYSE for 2 consecutive days (first time since 1888), costing over $60 billion (total cost may be second to Hurricane Katrina).

London 2012 Olympics with U.S. medal count of 104 (46 Gold), 85 nations win medals. Michael Phelps becomes most decorated Olympian with 22 (18 Golds, 2 Silvers and 2 Bronzes) winning 4 Golds and 2 Silvers in London. Usain Bolt wins 3 Golds (matching Beijing), Missy Franklin (4 Golds and 1 Silver), Allison Schmitt (3 Golds, 1 Silver and 1 Bronze) and Ryan Lochte (2 Golds, 2 Silvers and 1 Bronze).

Month of December 2012

Dow: 13,104
Dow month: 0.60%, 6 mo: 1.74%, ytd: 7.26%

S&P 500: 1,426
S&P 500 month: 0.72%, 6 mo: 4.71%, ytd: 13.41%

NASDAQ: 3,020
NASDAQ month: 0.32%, 6 mo: 2.88%, ytd: 15.91%

FOMC neutral stance (Dec 12) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%. Federal Reserve (QE4) will "continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will purchase longer-term Treasury securities after its program to extend the average maturity of its holdings of Treasury securities is completed at the end of the year, initially at a pace of $45 billion per month". Fed extends (12/13) dollar liquidity swaps to foreign central banks through February 2014.

U.S. unemployment risess to 7.8%, adding 155,000 jobs.

European finance ministers (12/13) agree to give the ECB new supervisory powers over 200 Eurozone banks with either more than 30 billion euros ($39 billion) in assets or which have a large presence within a member economy.

Greek bondholders tendered (12/11) more than €31.8 billion receiving €11.2 billion (average price $0.338), Greece's 5 biggest banks participated in buyback. Greece to receive €43.7 billion in 3 installments through Q1 2013, to pay €34.3 billion installment by December 13. Greece's debt from 190% gdp in 2014, to 124% gdp in 2020, and "substantially lower than" 110% gdp by 2022. Reduced interest on existing loans to 50 basis points above financing costs (down 100 bps) once Greece achieves a primary budget surplus of 4.5% of GDP, an extension of Greece's bailout maturities by 15 years, and a debt-buyback operation (€11.2 billion) to private-sector Greek government bond-holders.

General Motors to purchase $5.5 billion of its stock (200 million shares, $27.50) repaying part of the $49.5 billion, Treasury will still hold about 19%, 300 million shares.

AIG (12/11) ends Treasury's equity ownership (6th offering since 2008, $182.3 billion bailout) for $7.6 billion ($22.7 billion profit), leaving Treasury only holding AIG warrants.

Standard Chartered (12/10) settles $327 million with U.S. authorities (transactions 2001-07) with Iran, Burma, Libya and Sudan.

UBS settles (12/19) $1.5 billion (incl. record CFTC $700 million) fine, rigging LIBOR and U.S. criminal charges against 2 former traders.

HSBC record $1.92 billion settlement (12/11, $1.256 billion to Justice Dept. and $665 million to U.S. regulators) violating the Bank Secrecy Act and the Trading With the Enemy Act, drug lords in Mexico and firms linked to Iran, Cuba, Sudan, Libya and Myanmar.

Month of November 2012

Dow: 13,026
Dow month: -0.53%, 6 mo: 5.11%, ytd: 6.62%

S&P 500: 1,416
S&P 500 month: 0.71%, 6 mo: 8.09%, ytd: 12.60%

NASDAQ: 3,010
NASDAQ month: 1.11%, 6 mo: 6.47%, ytd: 15.54%

U.S. unemployment falls to 7.7%, adding 161,000 jobs.

30 year fixed mortgages fall to all time low 3.31% (11/21).

SAC Capital (division employee) Mathew Martoma indicted in $276 million insider trading of Elan & Wyeth purchased by Pfizer (2009).

Discover, American Express and Capital One (11/19) credit card issuers settle $435 million in refunds to 6 million customers on deceptive credit card practices by the CFPB. Bank of America excessive $410 million settlement for debit card fees between January 2001 and May 2011.

UBS, Kweku Adoboli (11/20) sentenced to 7 years for $2.3 billion fraud by abuse of position and false accounting.

BP's $4 billion Government settlement (incl. largest criminal penalty $1.256 billion) and $525 million to the SEC and pleads guilty to 11 manslaughter felony counts related to 11 deaths. Pfizer paid $1.195 billion of $2.3 billion settlement in September 2009 over the fraudulent marketing of anti-inflammatory arthritis drug Bextra.

Month of October 2012

Dow: 13,096
Dow month: -2.54%, 6 mo: -0.89%, ytd: 7.19%

S&P 500: 1,406
S&P 500 month: -2.43%, 6 mo: 0.57%, ytd: 11.80%

NASDAQ: 2,977
NASDAQ month: -4.46%, 6 mo: -2.27%, ytd: 14.27%

U.S. unemployment rises to 7.9%, adding 137,000 jobs.

FOMC neutral stance (Oct 24) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

ESM launched Oct. 8, €500 billion, contributions: Germany 27.15% France 20.39% Italy 17.91% Spain 11.9%.

AIG settles (10/22) $300 million, in 2012: MetLife settles (4/23) $500 million in multi-state Life insurance claims (inforce 1992-2010) - Nationwide (10/11), Forethought Group (10/8), John Hancock (4/22) and Prudential Insurance (1/13). Life Insurers agree to check SSA's Death Master File to hand unclaimed money over to beneficiaries or the State's controller's unclaimed property division.

10/29 Hurricane Sandy a historic Atlantic storm slams the Eastern seaboard landing in New Jersey. 122 people in 8 states die, over 8 million without power, around 40,000 people displaced from their homes, closing the NYSE for 2 consecutive days (first time since 1888), costing over $60 billion (total cost may be second to Hurricane Katrina).

Earnings season for 3Q12 for the S&P 500 index was flat, 0%.

Month of September 2012

Dow: 13,437
Dow month: 2.64%, 6 mo: 1.70%, ytd: 9.98%

S&P 500: 1,441
S&P 500 month: 2.42%, 6 mo: 2.34%, ytd: 14.58%

NASDAQ: 3,116
NASDAQ month: 1.60%, 6 mo: 0.78%, ytd: 19.61%

U.S. unemployment falls to 7.8%, adding 132,000 jobs.

FOMC neutral stance (Sep 13) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%. Federal Reserve (QE3) will "increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month [and] continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee's holdings of longer-term securities by about $85 billion each month through the end of the year".

European Central Bank (9/6) creates an unlimited emergency sovereign bond buying program OMTs (Outright Monetary Transactions) in secondary markets - strict conditions are attached to the aid. ECB under Securities Market Program (SMP, terminated) has €209 billion of government bonds on its books.

U.S. Treasury (9/10) sells $20.7 billion of AIG shares reducing government's stake to 15.9%.

Whistleblower IRS payout (9/11) $104 million to convicted UBS employee Bradley Birkenfeld (conspiracy, June 19, 2008 40 months). $96 million (October 26, 2010) Justice Department award to Cheryl Eckard, GlaxoSmithKline employee helped $750 million settlement for manufacturing deficiencies.

Bank of America settles $2.43 billion lawsuit with investors who suffered losses during its acquisition of Merrill Lynch.

Month of August 2012

Dow: 13,091
Dow month: 0.63%, 6 mo: 1.07%, ytd: 7.15%

S&P 500: 1,407
S&P 500 month: 2.03%, 6 mo: 3.03%, ytd: 11.88%

NASDAQ: 3,067
NASDAQ month: 4.32%, 6 mo: 3.37%, ytd: 17.73%

U.S. unemployment falls to 8.1%, adding 96,000 jobs.

FOMC neutral stance (Aug 1) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

Drought effects 1,496 counties in 32 states, 62% of the lower 48 states have moderate to extreme drought. Qualified farm operators are eligible for low-interest emergency loans which may cost $12 billion. 85% of farmers have crop insurance, in 1988 25% were covered in the last worst drought. $68.7 billion paid out from 1989 to 2009. In 2011 (with a drought in Texas) a record $10.8 billion paid ($4.5 billion premiums collected). Corn trades (8/10) high of $843.8 bushel.

Knight Trading Group (8/1, largest market maker ~17% of NYSE and NASDAQ) in 45 minute opening lost $440 million (Goldman unwound trades) implementing a new high-frequency algorithmic trading software which executed 4 million (550 million shares, $7 billion) extra trades competing against the newly launched NYSE's RLP (Retail Liquidity Program) computer driven trading system.

Standard Chartered (8/14) settles $340 million civil suit with N.Y. Dept. of Financial Services for $250 billion money laundering scheme with Iran, Myanmar, Libya and Sudan (60,000 transactions between 2001-2010). ING (6/12/2012) pays $619 million for violating the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) economic sanctions to blacklisted countries - $2 billion moved through U.S. financial system (1990s-2007) for Cuban, Iranian and other clients. J.P. Morgan Chase (8/26/2011) payed $88.3 million - Iran, Cuba, Sudan and other clients. Barclays (8/17/2010) payed $298 million - Iran, Cuba, Libya, Myanmar, Sudan and other clients. ABN AMRO (5/11/2010, acquired by Royal Bank of Scotland 10/9/2007) payed $500 million for moving $3.2 billion 6/1995-12/2005 - Cuba, Iran, Libya, Sudan and other clients. Credit Suisse (12/16/2009) payed $536 million - Iran, Cuba, Libya and other clients. Lloyds TSB Bank (1/9/2009) payed $350 million - Iran, Sudan and other clients.

Apple (8/24) awarded $1.051 billion against Samsung for infringments on 6 of 7 patents for mobile.

Lance Armstrong (8/23) stripped of all wins back to 8/1/1998 by U.S. Anti-Doping Agency for anti-doping rule violations.

London 2012 Olympics with U.S. medal count of 104 (46 Gold), 85 nations win medals. Michael Phelps becomes most decorated Olympian with 22 (18 Golds, 2 Silvers and 2 Bronzes) winning 4 Golds and 2 Silvers in London. Usain Bolt wins 3 Golds (matching Beijing), Missy Franklin (4 Golds and 1 Silver), Allison Schmitt (3 Golds, 1 Silver and 1 Bronze) and Ryan Lochte (2 Golds, 2 Silvers and 1 Bronze).

Month of July 2012

Dow: 13,009
Dow month: 1.00%, 6 mo: 2.98%, ytd: 6.48%

S&P 500: 1,379
S&P 500 month: 1.25%, 6 mo: 5.07%, ytd: 9.65%

NASDAQ: 2,940
NASDAQ month: 0.17%, 6 mo: 4.48%, ytd: 12.85%

U.S. unemployment rises to 8.3%, adding 141,000 jobs.

10 yr U.S. Treasuries trade 1.379% (7/25, April 1946 1.54%) and
30 yr U.S. Treasuries trade 2.4454% (7/25, April 1946 2.50%) historic lows. U.S. long bond yields: fell 1873 (Jan ~5.58%) to 1900 (Dec ~3.10%), rose 1900 to 1920 (Dec ~5.09%), fell 1920 to April 1946 fixed at 2.5% (10yr, Jan 1941 ~1.95%), rose 4/46 to Oct 26, 1981 at 15.21% (10yr, Sep 30, 1981 15.84%), fell 10/81 to Jun 16, 2003 at 4.14%, rose 6/03 to Jun 13, 2007 at 5.41%, 2.505%, Dec 18 2008.

European Central Bank (7/5) cut its lending rate to a record low 0.75% and its overnight deposit rate to 0%. Bank of England (7/5) to purchase £50 billion ($78 billion) of assets (adding to £325 billion of quantitative easing). PBOC (7/5) lowers its 1 year lending rates to 6.00% and deposit rates to 3.00%.

Spain (7/20) receives €30 billion emergency bank bailout through the state-run FROB (Fund for Orderly Bank Restructuring) total of €100 billion approved by EU - funds from EFSF and transferred to ESM (authorized to make infusions directly into banks). Subordinated liability exercises (SLEs or haircuts) may be forced on bank debt holders. Spain to stand behind the debts of its 17 regional governments which are struggling to refinance.

Italy's index falls to 12,295.76 (7/25) 0.3% below its 3/9/09 low of 12,332.00. Spain's 10-year Bond yields 7.751% (7.25).

9 SIFI (systemically important financial institution, 7/2) submit FDIC living wills: Bank of America, Citigroup, Goldman Sachs, J.P. Morgan Chase and Morgan Stanley, also, Barclays, Credit Suisse, Deutsche Bank and UBS - 225 banks to submit by 12/31/13.

Dodd-Frank Act, CFTC and SEC (July 10, 2012) define Interest-rate, Credit, Commodity and other derivatives to be swaps ($650 trillion global market). Exempt: Retail transactions, Life insurance, Property and casualty insurance, Interest-rate caps (on consumer mortgages and home heating oil agreements). Embedding options: Non-deliverable Foreign-exchange forwards and Currency swaps are included. Forwards exempt (if tied to non-financial commodities), Energy contracts (volumetric optionality, undetermined), Foreign-exchange swaps and other Forwards - exempt from clearing and trading requirements. Registration: Swap dealers and Major Swap participants (JPMorgan, Goldman Sachs, Bank of America, Citigroup and Morgan Stanley control 96%). Reporting: Agricultural swaps, Commodity options, Interest-rate and Credit swaps. Limits on speculation in futures and options for 28 commodities (and their derivatives): e.g. Oil, Natural gas, Wheat, etc., position limits possible. CFTC estimates 125 companies included. Clearinghouse (end-user exception): Commercial, Manufacturing companies, Banks (less than $10 billion assets), separate exemption for 10 Farm-credit associations, Credit unions and Rural electric cooperatives (that may exceed $10 billion) - CFTC estimates 30,000 entities exempt.

GlaxoSmithKline settles (7/2) U.S. criminal and civil fraud charges, a $3 billion fine for fraudulently marketing its drugs.

Visa, MasterCard and their issuers (7/13) agreed to a $7.25 billion in the largest antitrust settlement with 7 million merchants over credit and debit card fees.

Higgs boson confirmed (7/4) at Large Hadron Collider (LHC) completing the Standard Model of particle physics predicted in 1960.

Earnings season for 1Q12 for the S&P 500 index was positive 8%.

Month of June 2012

Dow: 12,880
Dow month: 3.93%, 6 mo: 5.42%, ytd: 5.42%

S&P 500: 1,362
S&P 500 month: 3.97%, 6 mo: 8.30%, ytd: 8.30%

NASDAQ: 2,935
NASDAQ month: 3.82%, 6 mo: 12.66%, ytd: 12.66%

FOMC neutral stance (Jun 20) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%. Fed extends QE2 (Operation Twist) through 2012. FOMC to sell $267 billion Treasury securities of less than 6 years and purchase 32% (6-8 yrs), 32% (8-10 yrs), 4% (10-20 yrs), 29% (20-30 yrs) and 3% TIPS (6-30 yrs). Federal Reserve to hold almost no Treasuries maturing through January 2016 by the end of 2012.

U.S. unemployment remains to 8.2%, adding 45,000 jobs.

CRB trades 502.7 (6/4) down 26.2% from the all-time high of 688.3 (Mar 7, 2011).

People's Bank of China (PBOC, 6/7/12) lowers its 1 year lending rates to 6.31% and deposit rates to 3.25% fighting a global slowdown - from a high of 6.56% and 3.50%, since 7/6/2011. PBOC (11/30/11) lowered its RRR (required reserve ratio, effective 12/5/11) to 21% from a record high 21.5% (RRR had risen 12 times since 12/25/08) as inflation declines.

U.S. Supreme Court (6/28) upholds much of Obamacare by establishing the individual mandate penalty to require Americans to buy healthcare insurance in 2014 as a tax. But strikes down the Federal government's powers to force the individual mandate and States to expand Medicaid in their State through the Commerce clause, as well as, noting that the legislative process is a democratic process.

European Union creates TCRP (Troubled Country Relief Program), 6/28-9 and agreed to spend €120 billion (Pact for Growth) to stimulate growth and create jobs. EFSF (European Financial Stability Facility) loans assumed by future ESM's (European Stability Mechanism) emergency loans to Spanish banks (waive their preferred creditor status) funding banks and bypassing their sovereign.

Spain (6/11) €100 billion bank bailout through the state-run FROB (Fund for Orderly Bank Restructuring). Greece (5/1/10, €110 billion and 2/21/12, €130 billion ), Ireland (11/29/10, €67.5 billion), Portugal (5/16/11, €78 billion). Cyprus becomes the fifth country to request a €13 billion bailout. ELA (Emergency Liquidity Assistance, started in 2008 by ECB) loans over €150 billion providing emergency liquidity to banks with unacceptable collateral - the loans require approval by the ECB's 23-member Governing Council, carries a penalty interest rate and the terms are not made public.

Peripheral European stock exchanges suffer major losses: Greece's index falls to 471.35 (6/5) down 67.7% from its 3/9/09 low of 1,457.83. Portugal's index falls to 4,371.74 (6/14) down 23.2% from its 3/9/09 low of 5,696.46. Spain's index falls to 5,987.80 (6/4) down 11.6% from its 3/9/09 low of 6,771.70. Italy's index falls to 12,568.05 (6/1) 1.9% above its 3/9/09 low of 12,332.00.

Obama signs (6/29) Surface Transportation Extension Act of 2012, $127 billion through 2014. Transportation spending to save 1.8 million infrastructure jobs and create 1 million jobs with federal loan guarantees. Postpones federal student loan interest rates doubling from 3.4% to 6.8% (on July 1) for 1 year at a cost of $6 billion for 7.4 million students. Extends funding for the National Flood Insurance Program through September 30, 2017 (expiring July 31) to protect 5.6 million households and businesses.

IRS (6/26) collects over $5 billion in back taxes, interest and penalties from 33,000 taxpayers hiding in offshore accounts under two amnesty programs.

Stockton, California became the largest city to file for Chapter 9 bankruptcy (6/28), $417 million liability. Jefferson County, Alabama (11/9/11) was biggest municipal bankruptcy $4.23 billion. Since 1980, 268 municipal bankruptcies (mostly utilities) with 49 cities, villages and counties 37 dismissed of the remaining 12 none imposed losses on bondholders - $3.7 trillion municipal bond market.

European Court of Justice (6/27) upheld 2008 fine on Microsoft for abusing its market dominance - reduced to €860 million ($1.07 billion) from €899 million (2/27/08). Microsoft fined €497.2 million (3/24/04) for anticompetitive practices, and €280.5 million (7/12/06) for additional breaches of competition rules, total of €1.7 billion. Intel appealing €1.1 billion (5/13/09) EU fine for abusing its dominance in the computer chip market against AMD.

Barclays settles (6/27) £290 million ($452.3 million) fraud to U.S. and U.K. for manipulating Libor (benchmark rate for $360 trillion) hiding their true cost of borrowing.

Bear Stearn's former 7 executives including James Cayne and Alan Schwartz settle (6/7) a State of Michigan Retirement Systems led shareholder lawsuit (12/14/06 to 3/14/08) for $275 million for misleading investors about BS's business and financial well-being.

R. Allen Stanford (6/14) sentenced to 110 years for conspiracy, wire and mail fraud, obstruction and money laundering in $7 billion Ponzi scheme. $330 million of Stanford funds in 29 foreign bank accounts, almost $3.5 billion in claims.

Month of May 2012

Dow: 12,393
Dow month: -6.21%, ytd: 1.44%, 6 mo: 2.88%

S&P 500: 1,310
S&P 500 month: -6.29%, ytd: 4.17%, 6 mo: 5.05%

NASDAQ: 2,827
NASDAQ month: -7.19%, ytd: 8.52%, 6 mo: 7.90%

U.S. unemployment rises to 8.2%, adding 87,000 jobs.

Spain's government (5/25) injects an additional €19 billion (plus €4.465 billion, $29.4 billion) into nationalized Spanish lender Bankia, created out of the merger of 7 regional savings banks in 2010 with over €184 billion of illiquid real estate debt. EFSF (5/28) disbursed €18 billion to Greece's 4 largest banks through the Hellenic Financial Stability Facility.

Facebook trades 5/18, it sold 15.4% of the company for $16.08 billion the IPO priced at $38 (421 million shares, valuation of $104.2 billion). Mark Zuckerberg maintains 57.5% of the voting power - Facebook one of ~262 U.S. dual-class stocks. Record 566 million shares trade on first day surpassing General Motors at 458 million.

Month of April 2012

Dow: 13,214
Dow month: 0.02%, ytd: 8.16%, 6 mo: 10.53%

S&P 500: 1,398
S&P 500 month: -0.71%, ytd: 11.16%, 6 mo: 11.57%

NASDAQ: 3,046
NASDAQ month: -1.49%, ytd: 16.92%, 6 mo: 13.49%

U.S. unemployment falls to 8.1%, adding 68,000 jobs.

FOMC neutral stance (Apr 25) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

IMF (4/20) increases lending by $430 billion - the fund now has just over $800 billion.

JOBS (Jumpstart Our Business Startups) Act (4/5) - 500 private company shareholders rule to 2,000 before having to publicly disclose certain financial information. Enables crowd-funding, $1 million ceiling annually. General solicitation, permitted only for accredited investors in Reg D offerings. Private emerging growth companies (EGCs, up to $1 billion in annual revenue) going public exempt from many disclosures, reporting and governance rules may operate for up to 5 years without an independent audit.

Earnings season for 1Q12 for the S&P 500 index was positive 8%.

Month of March 2012

Dow: 13,212
Dow month: 2.01%, ytd: 8.14%, 6 mo: 21.07%

S&P 500: 1,408
S&P 500 month: 3.10%, ytd: 11.96%, 6 mo: 24.49%

NASDAQ: 3,092
NASDAQ month: 4.22%, ytd: 18.69%, 6 mo: 28.03%

U.S. unemployment falls to 8.2%, adding 143,000 jobs.

FOMC neutral stance (Mar 13) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

Greece's bond swap has triggered a credit event (International Swaps and Derivatives Association, 3/9). Greece activated its collective action clauses (CAC) to force creditors to accept private sector involvement (PSI) on loses of €199 billion of €205.5 billion in bonds regulated by Greek law. Credit default swaps insuring Greek debt will payout about $0.785 to 4,369 outstanding contracts $2.89 ($3.18 net) billion of Greek debt. EU releases €35.5 billion ($47 billion) of aid for Greece and backed the country's debt swap with private creditors. Greek 10-year Bond yields 44.212% (3/9) falling to 18.45% (3/12).

ECB (3/2) offers €529.5 billion ($712.2 billion) for 1,092 days (LTRO2) to 800 of 2,267 eligible financial institutions. ECB's balance sheet rises to a record €3.02 trillion euros ($3.96 trillion).

EU (3/30) establishes €500 billion European Stability Mechanism (ESM) and the European Financial Stability Facility (EFSF) €200bn of Irish and Portuguese funding and €102bn for Greece, lending total of €800bn.

Dodd-Frank "bank stress test" (3/13) 15 of 19 U.S. banks pass - Citigroup, Ally Financial, SunTrust and MetLife failed marginally.

SWIFT (Society for Worldwide Interbank Financial Telecommunication) halts international financial transactions for 30 Iranian banks including Iran's central bank, complying with EU sanctions (3/17). Swift transmits 17 million financial messages a day, facilitating trillions of dollars in cross-border payments, Swift had never expelled an institution (1972).

U.S. real estate markets bottom, hardest hit: Las Vegas -61.7% (8/06-3/2012), Phoenix -55.9% (6/06-9/2011), Miami -51.2% (12/06-4/2011), Detroit -49.3% (12/05-4/2011), Tampa -48.0% (7/06-2/2012), San Francisco -46.1% (5/06-3/2009)...least hit...Denver -14.3% (8/06-2/2009) and Dallas -11.2% (6/07-2/2009).

U.S. Treasury sells (3/8) $6 billion of AIG stock reducing U.S. ownership to 70% from 77%.

BP (3/2) offers $7.8 billion settlement for 120,000 claims - already $8 billion paid to individuals and $14 billion paid for cleanup.

Month of February 2012

Dow: 12,952
Dow month: 2.53%, ytd: 6.01%, 6 mo: 11.52%

S&P 500: 1,366
S&P 500 month: 4.06%, ytd: 8.59%, 6 mo: 12.03%

NASDAQ: 2,967
NASDAQ month: 5.44%, ytd: 13.89%, 6 mo: 15.04%

U.S. unemployment remains 8.3%, adding 259,000 jobs.

Greece (2/21) secures €130 billion second bailout through 2014. $172 billion to finance bond exchanges, €30 billion "sweeteners" for private sector swaps, €23 billion to recapitalize Greek bank's stability and €35 billion to buy back bonds. Greece must pay €14.5 billion of maturing debt on March 20. Greece cuts debts to 120.5% of GDP by 2020, private bond holders take a 53.5% nominal writedown (74% loss, €100 billion largest sovereign restructuring - bonds exchanged to 2% coupon through 2014, 3% 2015-20 and 4.3% thereafter). Greek parliament to implement budget measures a 22% cut in the benchmark minimum wage, 150,000 more government layoffs by 2015, plus additional: tax reform, workplace liberalizations, rules against bribery and readying privatization sales. EFSF (possibly also ESM) and IMF funded.

Welfare Integrity and Data Improvement Act - $89 billion, extends the payroll tax holiday (4.2% instead of 6.2% on first $110,100 in wages) for 160 million workers and long-term unemployment compensation benefits through 2012. Averts a 27% cut in payments to Medicare physician ($50 billion, paid for) through 2012.

China has its banks roll-over $1.7 trillion (Rmb10.7tn) of loans to local governments half of those loans due over the next 3 years.

$25 billion U.S. settlement (2/10) - Bank of America $11.8 billion, Wells Fargo $5.35 billion, JP Morgan $5.29 billion, Citigroup $2.2 billion and Ally $310 million: $1.5 billion for payments to 750,000 borrowers foreclosured between 2008-11, a $2,000 cash payment. $17 billion for mortgage debt forgiveness, forbearance, short sales and other assistance to homeowners (servicers will also provide $3 billion in refinancing to lower homeowners interest rates) over the next 3 years. The balance of settlement will be applied toward mortgage modifications and other benefits for borrowers.

Month of January 2012

Dow: 12,633
Dow month: 3.40%, ytd: 3.40%, 6 mo: 4.03%

S&P 500: 1,312
S&P 500 month: 4.36%, ytd: 4.36%, 6 mo: 4.36%

NASDAQ: 2,814
NASDAQ month: 8.01%, ytd: 8.01%, 6 mo: 2.10%

FOMC neutral stance (Jan 25) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%. FOMC "likely to warrant exceptionally low levels for the federal funds rate at least through late 2014."

U.S. unemployment falls to 8.3%, adding 275,000 jobs.

Earnings season for 4Q11 for the S&P 500 index was positive 9%.

Year of 2011

Dow 2011: 11,577.51 to 12,217.56
Dow return for 2011: 5.53%

S&P 500 2011: 1,257.64 to 1,257.6
S&P 500 return for 2011: 0.0%

NASDAQ 2011: 2,652.87 to 2,605.15
NASDAQ return for 2011: -1.8%

10 year Treasury: 1.87% yield down -43.33% prices up
World Equity Market: $45,912 trillion down -11.69%
MSCI Europe Index 717.28 down -16.49%
MSCI Asia Pacific Index 112.82 down -18.07%
S&P Latin America 40 4,135.66 down -21.16%
MSCI BRIC 267.83 down -24.85%
S&P Middle East & Africa 265.14 down -20.67%

Best Investments in 2011

    U.S. Total stock market returned 0.9% in 2011, Stocks had below average gains, Bonds had above average gains and inflation was average 2.9%. August and September had large losses while October had large gains.
    Of the 5 largest sectors in the U.S. Economy: Healthcare 12.3% and Real Estate 9.1% outperformed, Natural Resources 2.8%, Technology 2.6% while Financials -17.1% underperformed. By size: Large Cap returned 0%, Small Cap -0.2%, Mid Cap -3.1% while Micro Cap lost -10.9%. Both gold 10.2% and oil 7.2% rose while commodity prices (CRB) fell -10.2%.
    Global markets fell by -11.7% of the World's largest economic regions: Europe -16.5%, Asia -18.1%, Latin America -21.2% and Emerging Markets -24.9% all underperformed. Of the World's largest Developed non-U.S. Economies: Britain -5.6%, Canada -11.1%, Germany -14.7%, France -16.9% while Japan lost -17.3%. In the Emerging markets Brazil -18.1%, China -21.7%, Russia -22.1% and India -24.6%. Hedge funds -5% and Private Equity both underperformed market indexes.

   Those who diversified with MPT did best, a trend which should accelerate – indicative are the returns in U.S Treasuries, Healthcare, Real Estate and the commodities gold and oil.

2011 complete News (click)
Months 2009-12 (click)


U.S. unemployment at 8.5% to 9.1% remained a major concern. 2011 gdp 1.7% with 1.64 million jobs added.

FOMC neutral stance (Dec 13) Fed Funds rate 0%-0.25% and the Discount rate of 0.75%.

Federal Reserve (QE2) to "purchase, by the end of June 2012, $400 billion of Treasury securities with remaining maturities of 6 years to 30 years and to sell an equal amount of Treasury securities with remaining maturities of 3 years or less" and "reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction".
- Federal Reserve "will maintain its existing policy of reinvesting principal payments from its securities holdings" - System Open Market Account at about $2.654 trillion, about $300 billion of purchases over the next 12 months.
- Federal Reserve (11/30) extends U.S. dollar swap lines to Feb. 1, 2013 with the European Central Bank and the central banks of Canada, Switzerland, Japan and the U.K.
- Federal Reserve believes challenges facing the U.S. economy "are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013."
- Federal Reserve returns $75.4 billion to the U.S. Treasury. Fed's balance sheet rose to a record $2.928 trillion on Dec. 28.

Treasuries returned 9.6% in 2011, 5.9% in 2010, up from -3.7% in 2009 and 14% in 2008. 30-year fixed mortgages fall to all time low 3.91% (12/21).
2yr Treasuries trade 0.1431% (9/20) and 10yr trade 1.6714 (9/23). U.S. 1 month Treasuries trade at a negative yield : 6/27-30, 7/6-7,13-20, 8/4-8, 9/8-30, 10-31, 10/4-7 and 11-12 and U.S. 3 month Treasuries negative: 7/5,7,13-14, 8/4-8,19-30 9/12,14-19,22-26 and 10/3-7.

Gold trades at an all-time high of $1,923.70 (Sep 6). Official U.S. government Gold price $19.39 (from 1792-1833), $20.67 (1833-1934), $35 (1934-1971, $31.69 low in 1949 and $41.28 high in 1969). In 1968 the U.S. established a two-tiered gold market. On August 15, 1971 the U.S. stopped the direct conversion of U.S. dollars to gold. Gold price set at $38 (1972) and $42.22 (1973) ending the existing Bretton Woods system of international financial exchange. Gold set an all-time high of $850 on January 21, 1980 then fell to $251.70 Aug. 18, 1999. The Washington Agreement (September, 26 1999) limited central banks gold sales following Britain's controversial plan to reduce its gold holdings by 58% to 300 tons from 715 tons, July 1999.
- Silver trades at an all-time high of $49.82 (Apr 25), surpassing $49.45 during the silver Hunt brothers scandal, Jan 18, 1980. Copper trade at an all-time high of $4.6495 lb (Feb 15).

Obama signs Budget Control Act of 2011 (8/2): $917 billion deficit reduction and budget caps on spending through 2021.
- Obama signs Temporary Payroll Tax Cut Continuation Act of 2011 ($33 billion) a 2 month stopgap.

ECB raises rates from 1% to 1.25% (May) and to 1.5% (July). ECB lowers rate (Nov 3) to 1.25% as Mario Draghi succeeds Jean-Claude Trichet (11/1) and starts 1 year bond purchase of unlimited size. ECB lowers interest rate (12/8) to 1% while Euro-area governments must rollover €1.1 trillion of long and short-term debt in 2012 while European banks have about $665 billion of debt coming due in the first 6 months of 2012.
- European Central Bank (12/21) lends €489 billion ($638 billion, Long Term Refinancing Operation) to 523 banks under a (restarted) 3 year lending facility. ECB's balance sheet rose to a record €2.73 trillion ($3.55 trillion) 12/28.
- Greek 10-year Bond yields 36.142% 12/21/11. Portugal 10-year Bond yields 14.328% 12/1/11. Ireland 10-year Bond yields 14.219% 7/15/11. Italy 10-year Bond yields 7.483% 11/9/11. Spain 10-year Bond yields 6.729% 11/25/11.

Mergers and acquisitions rose to $2.26 trillion up from $2.19 trillion in 2010 and $1.77 trillion 2009, $2.5 trillion 2008 and 2007's record $4.04 trillion. Venture capital rises to $6.57 billion up 19%, $5.52 billion in 2010.

EU (10/27) agrees to sovereign debt crisis fixes: private holders of Greek debt accept a 50% writedown, European Financial Stability Facility (EFSF) leveraged to €1 trillion, 70 EU banks required to increase core capital levels to 9% and recapitalize (by June 2012) raising €106 billion in new reserves.
- The €440bn EFSF (European Financial Stability Facility) bail-out fund can now help countries not currently getting bail-outs, including precautionary lines of credit, the ability to recapitalize any struggling bank in the Eurozone, and buy bonds on secondary markets in "exceptional" circumstances (subject to the approval of the European Central Bank). The ESM (2012) is expected to have €500 billion in lending capacity.

Greece (7/21) receives a €110 billion ($157 billion) restructured EU/ECB/IMF aid package - Greek Parliament approves budget to receive aid.
Portugal gets €78 billion bailout package (€12 billion for banks).
EU banks hold $147 billion of Greek sovereign bonds and $115 billion of Portuguese and Irish debt - 5% of annual European Union gdp.

Swiss Central bank (Sep 6) intervenes imposing a Euro-Swiss franc "minimum rate of 1.20" .

Japanese yen rallies to all-time high of ¥75.31 on 10/31.

S&P downgrades U.S. Treasuries from AAA to AA+ also Fannie Mae, Freddie Mac, the Federal Home Loan Banks, U.S.'s 4 Clearinghouses, 744 U.S. Federal, State and Agency bonds and about 11,500 Municipal bonds.

China's rural population falls from 81% (1979) to below 50% (2011) - the number of people living in towns and cities increased to 690.79 million. China's foreign-exchange reserves exceed $3 trillion in March 2011.

Arab spring - Overthrew governments in Tunisia. Then Egypt (Feb 11, Hosni Mubarak). Libyan revolution and civil war (Aug 23, Muammar Gaddafi). Syria suspended from the Arab League (Nov 12).

Japan Sendai 9.0 Earthquake and nuclear accident, near 19,000 deaths.
- 2011 deadliest year for tornadoes 549 deaths (157 fatalities in Joplin, Mo.), causing $28 billion of damage.
- Mississippi River exceeds some damages caused by the Great Mississippi Flood of 1927, causing $4 billion of damage.
- Hurricane Irene makes U.S. landfall (Aug 27) at Cape Lookout, N.C. and works its way up the Eastern seaboard toward Maine taking 45 lives and causing $8 billion of damage - over 7 million US homes and businesses lost power across 13 states.

FHFA (Federal Housing Finance Agency, conservator for Fannie Mae and Freddie Mac) files lawsuits against 17 financial institutions alleging over $196 billion of violations in the sale of residential private-label mortgage-backed securities.
- Jefferson County, Alabama (11/9) files largest U.S. municipal bankruptcy of $4.23 billion of debt ($3.14 billion relating to sewer work). Orange County, CA filed bankruptcy (12/6/94) with a loss of $1.64 billion in its Orange County Investment Pool of $7.6 billion and borrowings of $13.6 billion. Municipal bond bankruptcies: 362 filings from 1937-1994 total debt of about $217 million
- MF Global Holdings files bankruptcy (10/31) with debts of $39.7 billion and assets of $41 billion, 8 largest U.S. bankruptcy. $1.6 billion of customer money missing - $700 million from MF Global's U.K. subsidiary, $680 million from JPMorgan and other financial institutions and $220 million inadvertently transferred from securities customers to commodities customers.
- UBS, Kweku Adoboli (9/16) charged with $2.3 billion fraud by abuse of position and false accounting.
- Raj Rajaratnam, founder of Galleon hedge fund (managed $7 billion), sentenced to 11 years and fined for criminal and civil penalties of over $150 million. Perfect Hedge: 62 found guilty of insider trading.

Is it time to take advantage of Opportunities?