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  • Redbook Chain Store Sales: +2.2% Y/Y vs. +2.1% last week. Consumers are putting off there purchases currently, hinting at better sales leading up to Christmas. [View news story]
    "Consumers are putting off there purchases currently, hinting at better sales leading up to Christmas."

    How do you reach that conclusion?
    Dec 11, 2012. 09:21 AM | Likes Like |Link to Comment
  • A group of Democratic Senators have signed a letter urging for a delay in implementing a tax on the medical device industry that is scheduled to go into effect January 1, saying the industry has received little guidance about how to comply with the tax, and is causing significant uncertainty and confusion. The Senators are requesting that a delay be included in the fiscal cliff bill Congress is currently negotiating. [View news story]
    "We have to pass it to know what's in it."

    Apparently even that's not true anymore :)
    Dec 10, 2012. 04:09 PM | Likes Like |Link to Comment
  • Weighing The Week Ahead: Something New From The Fed? [View article]
    Jeff,

    I don't think I ever read anywhere that any FED chief has ever openly spoken about targeting equity prices as a tool of FED policy or as a method of increasing employment which is why this was such a notable pronouncement. The Dual Mandate is just that and normally the FED isn't in the business of worrying about asset prices - just look at how nonchalant Ben Bernanke was about the impact of the Subprime bubble on the economy back in 2005-08.

    Ben was openly saying: "Don't Fight the FED" when it comes to stock prices so you are correct that it was the right strategy to buy equities. If the FED has been buying bonds openly who knows what else they have been doing with Open Market Operations.

    I used to think the PPT (Plunge Protection Team) was a tinfoil hat conspiracy theory but based upon the above it would be a useful adjunct to the FED's monetary policy.

    If they believe rising stock prices lead to higher employment and lower inflation why wouldn't they be propping up the stock market?

    Greenspans' "Irrational Exuberance" has been replaced by Ben's "Buy! Buy! Buy!"

    After 5 years of ZIRP and the policy continuing for as far as the eye can see nothing would suprise me anymore. "Don't Fight The FED" is more than just a cliche :)
    Dec 9, 2012. 02:40 PM | 1 Like Like |Link to Comment
  • November Nonfarm Payrolls: +146K vs. consensus +93K, October revised to +138K from +171K. Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
    Glenn Beck has the best take on the "Environment" that I have heard or read :)

    http://bit.ly/YR6Z0u
    "GLENN: I’ve got to tell you something. I said on the program a couple of weeks ago, you know, that nobody hates the environment. I’ve been thinking about that. I think we should hate the environment. I’m changing my stance on hating the environment. I mean, I think it’s a cop — "I don’t hate the environment, nobody hates the…" that’s a copout. I know it’s the popular viewpoint. I’ve been doing a lot of thinking about this. Don’t worry about what happens to the environment. It doesn’t worry about what happens to you, does it? Think about it. Hurricanes? Part of the environment. They roll in. What’s the environment’s role? It creates the hurricanes! Does it give somebody, you know, some place to hide? No. Only human-made buildings, strong buildings protect us from the environment’s brutal attempted murder. There, I said it. I’m not for environmental murders. In fact, nature only provides us with trees which basically lure humans to stand under them and then it provides lightning to kill us underneath the tree. Now that humans can do a good job, you know, predicting hurricanes, what does the cute little warm and fuzzy squeezably soft environment do? It unleashes 200 mile an hour winds in the form of tornadoes instead. So focused and so instant that you can’t even predict them. Oh, yeah, that sounds like something I want to predict. Oh, yeah, the ones that just suck up my whole family in Nebraska last year, that was great. I just love that environment. It lures us to our coastlines. "Come, come to the coastline." We build our most important and expensive buildings only so the environment can cause flooding and beach erosion, stealing millions of dollars from honest citizens like you. "Come to the coastline." The environment could provide temperatures that are mild and consistent. Oh, no, no, no, but that’s not the style, oh, no. The environment isn’t all that way. Why not instead give us three months where it’s zero and six months later make it 90 or 110 with 100% humidity, that way we waste money on insulation and two sets of clothing that we have to cart upstairs and then back downstairs twice a year! I hate the environment.

    Do you like to visit the forest? "Yeah, I love the forest, Glenn. Who doesn’t love forests? Oh, they’re great." Yeah, that’s when I used to think until I saw… who hides in forests? Bears, killer bears. Bears, part of the environment. More than happy to rip your torso from your extremities without a second thought. "Gee, I don’t know, maybe we should have a cap in trade on these humans there, Bill. You’ve already ripped four apart." No, they don’t do that! The innocent little environment. Giving us snakes, hairy rats, crunchy cockroaches. These are the facts on the environment.

    Environmentalists will tell us, "The most important thing we can do is stop using oil." Well, really? If these true, I propose immediate sanctions on the environment for creating oil in the first place. I didn’t create it. I just pumped it out of the ground! It’s the environment’s effects on dinosaurs, former members of the environment murdered by the environment which create oil in the first place. Leave Exxon alone. Find mother nature until she’s broke. You know what? Someday they will be pumping us out of the ground if mother nature has her way. And then giant thinking cockroaches, some professor cockroach will say, "I don’t know. We shouldn’t pump those ex-people out of the ground. It’s bad for the environment." And then nature will come and kill the cockroaches! Wildfires. They’re wild to you and me. Part of the status quo to that oh, so innocent environment. Does the environment care if it burns down your house? Nope. Burns whatever it wants. How about volume contain owes? Does the environment care when it soaks an entire community in molten rock? Nope, uh-uh. Doesn’t go to bed at night going, gee, I don’t know, I think that might have been a mistake."

    Plus, when a volcano blows, it dumps gigantic amounts of greenhouse gases into the atmosphere. Does it have a cap in trade on its eruptions? No! Totally unregulated! Was it man who created all the diseases that have wiped out millions? The plague. No, it was natural. I guess we could just accept the whole wiping out 1/3 of the human race thing. Sorry, don’t need another Holocaust but thanks for chiming in, nature. And while I’m at it, thanks for making Antarctica completely uninhabitable. It’s not like we need more land or more resources. Don’t worry about all the people starving up here. You know, don’t worry about. Just cover the whole continent in ice. Why don’t you do that. Who needs it? Just ice. And penguins, birds that don’t fly and you can eat! Thank you. No, I appreciate it.

    Let me tell you something. Thank God for us people who are supposedly melting that pointless piece of ice so someone can put the land to good news. No thanks to you, Mr. Environment."
    Dec 9, 2012. 12:33 PM | 3 Likes Like |Link to Comment
  • Weighing The Week Ahead: Something New From The Fed? [View article]
    Jeff,

    Seems like the preoccupation with the FED targeting equities and asset prices in order to create a "wealth effect" has a basis in fact.

    From the Bernanke oped in the WashPost that started the "conspiracy" thinking:

    http://1.usa.gov/Mo5rkj
    "Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion."
    Dec 9, 2012. 12:05 PM | 2 Likes Like |Link to Comment
  • Recession Risk: The Threat Of Rising Interest Rates [View article]
    James,

    "your 4.5% figure (which I think is high)"

    INGDirect or HSBC online at the time were paying these rates on a daily savings account which I owned. I miss those days. I know it sounds incredible but amazingly it was true. The 2 year Treasury was paying 4.98% in June 2007. The average annual yield on the 2 year in 2006-08 was 4.82, 4.36, 2.01 respectively. So anyone buying longer yielded securities was probably counting their blessings for the first few years of ZIRP but now that they have to reinvest the trauma is setting in.

    FED data on interest rates:
    http://1.usa.gov/IN0WMj

    CD rates were pretty "good" as well. To get 4.5% today means you are taking on big risk for the same yield which is a tough decision for your average seasoned citizen.

    Just goes to show that the concept of anchoring has validity.
    Dec 8, 2012. 04:13 PM | 5 Likes Like |Link to Comment
  • Recession Risk: The Threat Of Rising Interest Rates [View article]
    DrGoldin,

    "I don't see how the Fed is waging war on me. "

    That's a pretty callous attitude. Not every grandma and grandpa wants to be invested fully in stocks despite what the FED wants nor should they be forced into taking risks if they don't want to.

    In practical terms, you could have generated a "risk-free" 4.5% return from online savings account in 2007/2008 which means that on $1 million dollars that's about about $45,000 dollars of income per year.

    Today that same account generates $5,000 dollars on the same amount of money.

    That's a massive cut in income and terrifying for someone that is risk-averse and dependent upon their principal for their livelihoods. Despite all of the reports of huge annual increases in equities, the truth is we are still below the highs of 5 years ago so anyone who has been a buy and holder, which is typical of the older cohort, is simply back to where they were assuming they didn't panic and remained invested.

    In aggregate, according to the Economist Magazine, the low interest rate regime has reduced annual interest income by:

    http://econ.st/UMn9UF
    "The Fed cut rates to current levels at the end of 2008 and has promised to keep them there until 2015. Since 2008, personal interest income has plunged 30%, or $432 billion at an annual rate, more than 4% of disposable income."

    I don't know if the FED is actually suppressing rates through their activities or whether we have the interest rates that reflect the current strength of the economy but either way Savers are getting hosed.
    Dec 8, 2012. 12:00 PM | 36 Likes Like |Link to Comment
  • November Nonfarm Payrolls: +146K vs. consensus +93K, October revised to +138K from +171K. Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
    bbro,

    This?:

    "The manufacturing workweek edged up by 0.1 hour to 40.6 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged up 0.1 hour to 33.7 hours."

    I would say based upon the trend in jobless claims we have seen that this report was much better than expected but I am scratching head on the shrinkage of the workforce.
    Dec 7, 2012. 09:02 AM | 1 Like Like |Link to Comment
  • November Nonfarm Payrolls: +146K vs. consensus +93K, October revised to +138K from +171K. Unemployment rate 7.7% vs. consensus 7.9%, 7.9% previous. [View news story]
    Over 500,000 left the labor force last month. I just don't quite understand how this is indicative of a stronger economy. This trend has been non-stop for years.

    Where do they go?
    Dec 7, 2012. 08:48 AM | 4 Likes Like |Link to Comment
  • Household net worth rose $1.7T to $64.8T in Q3, according the Fed's Flow of Funds report (if you like data dumps, this one is for you). Domestic nonfinancial debt grew 2.4% in Q3, with households continuing to deleverage, but businesses (+4.4%) and the federal government (+6.2%) picking up the slack. From 2002-2006, households added to debt levels at double-digit rates. [View news story]
    Confusingly median household net worth is down substantially, 30% plus, from the peak in 2007.

    So in the Obama economy apparently the rich keep getting a lot richer :)

    Good for them, I say.
    Dec 6, 2012. 04:51 PM | Likes Like |Link to Comment
  • November Employment Report Preview [View article]
    Oil,

    Thanks for that. That would be a positive surprise given the downgrading of estimates and the recent jump in jobless claims.

    I think that would provide a lot of juice to the mkt.
    Dec 6, 2012. 11:41 AM | Likes Like |Link to Comment
  • November Employment Report Preview [View article]
    Jeff,

    "and an extremely bearish and political approach in past commentaries."

    I don't recall that. They did seem to capture the improvement in the unemployment rate that Welch said was fantastical a bit before the official numbers did especially on the unadjusted data. So it did support the notion of marked improvement in the employment metrics that we saw over the summer and leading into the election.

    From that Gallup report you mentioned:

    http://bit.ly/TUk9C5
    "WASHINGTON, D.C. -- U.S. unemployment, as measured by Gallup without seasonal adjustment, was 7.8% for the month of November, up significantly from 7.0% for October. Gallup's seasonally adjusted unemployment rate is 8.3%, nearly a one-point increase over October's rate."

    That's a surprisingly large upward move for this time of year given their history so I wonder what's happened. Maybe oversampling distortion from storm affected areas?

    Hopefully just a blip/distortion otherwise it portends a bad end for employment in Q4.
    Dec 6, 2012. 10:40 AM | Likes Like |Link to Comment
  • On Investor Concerns, And Why Apple Should Trade Above $700 [View article]
    Tack,

    Could be April launch date.

    http://bit.ly/TUlIQm
    "Samsung's New Galaxy Phone May Have Unbreakable Screen"

    The Galaxy S IV is also expected to have bigger and better display, powerful quad-core processing power and a 13-megapixel camera, with picture density improving to 441 pixels per inch (ppi), a big improvement from the Galaxy S III's 306 ppi and better than the iPhone 5's 326 ppi."
    Dec 6, 2012. 09:50 AM | Likes Like |Link to Comment
  • Initial Jobless Claims: -25K to 370K vs. 380K consensus, 395K prior (revised). Continuing claims -100K to 3.20M. [View news story]
    bbro,

    You follow Gallup's unemployment data so this was interesting and surprising:

    http://bit.ly/TUk9C5
    "WASHINGTON, D.C. -- U.S. unemployment, as measured by Gallup without seasonal adjustment, was 7.8% for the month of November, up significantly from 7.0% for October. Gallup's seasonally adjusted unemployment rate is 8.3%, nearly a one-point increase over October's rate."

    That's a pretty staggering rise on a historical basis for this report at this time of year. Maybe they are oversampling storm areas?
    Dec 6, 2012. 09:42 AM | 1 Like Like |Link to Comment
  • Initial Jobless Claims: -25K to 370K vs. 380K consensus, 395K prior (revised). Continuing claims -100K to 3.20M. [View news story]
    bbro,

    Do the jobs that were "lost" show up anywhere as rehires?

    I don't quite understand why the storm would result in firings/permanent layoffs unless the employing business completely disappears. It's very expensive in time, effort, training, and cost to hire and fire employees for a temporary situation. Maybe I am missing something about how this system works.

    Thanks.
    Dec 6, 2012. 08:43 AM | Likes Like |Link to Comment
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