Here Comes September

September has been, on average, the worst performing month for the stock market with an average return of negative 1.13 percent since the Dow inception in 1896. This market sure feels like it is due for a major correction of somewhere between 10%-20% as we head into the last part of the year. I think the market will bottom for the year around the October – November time frame.

Georgia's Integrity Bank is Closed by State Regulators

Integrity's closure is the 10th bank failure so far this year. The bank had $1.1 billion in total assets and $974 million in total deposits as of June 30, the FDIC said. The bank had $1.1 billion in total assets and $974.0 million in total deposits.

The Next Crisis

It’s only a matter of time before the next shoe drops and you will start hearing about the massive defaults in consumer credit card payments. The stock market has not produced any wealth in the last 8 years. Home prices have come down sharply and will continue to fall for the next couple of years. The only place left to turn for the average American to maintain the world’s highest standard of living is their credit card.

Unfortunately, credit cards are the highest priced debt on the menu. The average balance and delinquency rate has been rising steadily in 2008. As the credit crunch moves from the 3rd to the 4th inning banks will start to tighten credit standards and raise the interest rate on the current credit card balances. None of this will be good for the economy or housing prices. It is going to take years to unwind the credit mess.

Time to Buy Gold?

Gold has come down faster than the market has risen in the last month. The 52 week high for gold is just a little over $1,000 an ounce. It is now currently trading at around $770 an ounce. That’s down over 23% in a little more than a couple months. No matter where the long term trend for gold is headed it should at least see a short term bounce up to the $850 an ounce level.

The Dollar Continues to Rally

The dollar is at a five month high and it is causing the US market to celebrate by having a summer rally that is also fueled by the falling price of oil.




Oil is now under $116 a barrel, and down 21% from its peak at $147 a barrel. It was only a couple months ago that many were forecasting oil at $200 a barrel. It has gone down so far so fast that I would not be surprised to see it bounce back up to at least the $120 mark before heading back down to under $100 a barrel.

Market ends little changed on the week

What an exciting week in the market. Triple digits changes on both the up and down side were the norm. Stocks ending one of the most volatile weeks of the year little changed as economic concerns resurfaced amid rising oil prices, rising unemployment, and a huge quarterly loss at General Motors Corp.

Nonfarm payrolls fell by 51,000 in July, the seventh straight month in July, while the unemployment rate jumped to 5.7%, a four-year high, the Labor Department reported Friday. Since December, 463,000 jobs have been lost, the strongest signal that the economy is in a recession.

The investing climate continues to be weak and the smart money is staying on the sidelines waiting for the perfect moment to pounce when stocks are in freefall. It will be the strong hands taking money from the weak hands.

Another Bank Bites the Dust

First Priority Bank was shut down by regulators on Friday, making the Florida lender the eighth bank failure in the U.S. so far this year.

SunTrust agreed to take on the deposits of First Priority, the Federal Deposit Insurance Corporation said in a statement late Friday. The six branches of First Priority will reopen on Monday as branches of SunTrust, it added.

If this is anything like the last banking crisis in the 90s we have 8 banks down and about 992 more to go.