A review – August 29, 2011

Hey guys! The last couple of weeks have been a wild ride in the markets. I’ve got some great ideas to share with you in this post and the next.

On another note, my son Luke was born on August 20. He was very early and as a result, he is still at the hospital, but he is doing great!

Anyway, on with the news:

Factoids for the week of August 22nd – 26th

Monday, August 22, 2011
The price of gold bullion rallied as high as $1,894.80 per ounce today in London and is up 15% so far in August, according to Bloomberg. While a Bloomberg survey of 13 traders and analysts revealed a median forecast of $2,000 per ounce by the end of the year, some analysts think it is overbought at this point and vulnerable to a pullback. A lot of the demand for gold bullion is coming from ETFs. Investor’s assets in these funds totaled 2,211.1 tons as of August 19, higher than all but four central banks.

Tuesday, August 23, 2011
Wall Street firms raised their earnings estimates on the S&P 500 for the 10th consecutive quarter, with a consensus forecast of 17% for 2011, according to Bloomberg. That projection is 9.9 times more than economists’ consensus estimate for GDP growth. The average ratio since 1954 is 5.4 times. Stock analysts are very bullish on corporate earnings.

Wednesday, August 24, 2011
Zacks Investment Research reported that a total of 68 banks have failed so far in 2011, according to MarketIntellisearch.com. There were 157 failures in 2010 and 140 in 2009. High unemployment and continued weakness in residential real estate have been particularly hard on smaller banks. The number of banks on the FDIC’s problem institutions list stood at 888 in Q1’11, the highest it has been since the total reached 928 in March 1993 (savings and loan crisis).

Thursday, August 25, 2011
In July, only 63.5% of men in the U.S. held a job (full or part-time), just slightly above the recent low point of 63.3% in December 2009, according to Bloomberg Businessweek. These are the lowest levels since 1948. The popping of the real estate bubble eliminated a substantial number of construction jobs – a male-dominated industry. On his recent bus tour, President Obama spoke a lot about funding infrastructure projects to put people to work. Currently, only 81.2% of men in their prime working-age (25-54) hold a job. That percentage never fell below 85% in the 1982-83 recession. In 1969, it was 95%.

Friday, August 26, 2011
Jonathan Litt, managing principal of Land and Buildings Investment Management LLC, just released a report in August in which he noted that the deleveraging that has taken place in the REIT industry makes REITs well positioned to cope with another financial crisis, according to REIT.com. He believes the fundamentals are actually improving. Traditional REITs recorded growth in funds from operations (FFO) of 10% in Q2’11, with roughly 75% of companies meeting or beating estimates. Litt sees full-year FFO rising by 14%, up from 12% at the start of the year.