The market closed at a new all-time high, the 35th for the Dow and 50th for the S&P 500, but there were still worrisome aspects of the session. The collapse of natural gas recalls the same kind of questions asked when crude began its free-fall. Is it a sign of economic doom or just a supply and demand issue? The decline is certainly a boon for consumers and industry, it just has to be different this time and a harbinger of nothing or reflects of the success of fracking and drilling in America.
The news Saturday, that two New York police officers were ambushed as they sat in their patrol car, sent shock waves throughout the country. The slaughter of these officers is more than heartbreaking. I did not want to write about this on yesterday's commentary as it was too soon and too emotional. However, for me, it recalls a time of hopelessness when New York City was circling the drain.
It is among the most despicable of crimes. Not only does this impact the lives of these officers and their families, but the physical, spiritual, and economic well-being of all citizens in New York City.
I moved to NYC in the early 1970s. I was astonished by the hostility, crime, and hopelessness. New York was in a tailspin as the city was at war with the police and itself. It was made worse when budget cuts saw the police force decrease by 30% in 1975, sending crime up 40%.
New York was in such awful shape that even the federal government told planners to "drop dead" by refusing a financial bail-out. It was a race against the clock as paperwork was filed and the city came within hours of making history; that was 1975.
Part of the solution meant 50,000 fewer workers in the police department, including 30% less officers. The result was a 40% spike in violent crime over the next four years. For the nation, the 1970s were a desperate time.
The decade had the second most killings of police officers after the 1920s when Prohibition of alcoholic unleashed crime waves and sophisticated syndicates dealt in fear and intimidation, not unlike death squads we read about in other countries today.
It is not the best backdrop to sell $130 million townhouses in the sky.
People fled the city in droves and the foreign immigrants were not computer coding geniuses, so for the most part, they put even further strains on the beleaguered city's resources.
It was a living hell.
Ironically, the neighborhood where officers Liu and Ramos were slain was among the most dangerous in America.
Bedford-Stuyvesant was known as "Do-Or-Die Bed-Stuy." Their troubles have been immortalized in song from Biggie Smalls, to Spike Lee's movie "Crooklyn."
It was a living hell.
Last year, the house featured in the movie "Crooklyn" sold for $1.7 million dollars. This does not happen in a city where there isn't law and order, and it does not happen in a city where the police are targets of scorn and madmen.
The architects behind this war on police have actually declared war on every citizen, and the stakes include your safety and prosperity, years of improvements in quality of life, and relationships between races, classes, and Americans in general. Only a handful of determined anarchists hate America; not the least progress made on issues of race and fairness seeks to turn it all on its head. For the moment, they are winning.
Natural Gas Loses Steam
Do not look now; natural gas has joined collapsing crude oil, tumbling more than 8% yesterday and coming into today's session, down almost 29% in the past year. What a difference from earlier in the year when natural gas was surging as the winter from hell would not stop and would not go away.
The result was sloppy job creation, a dip in the GDP and major hits to corporate profits. Now, it is moving in the other direction and winter has only just officially begun; it is not too early to consider the impact to consumers and industry.
This is a huge deal in so many ways; roughly, half of the homes in this nation get heat directly from natural gas and others indirectly via electricity. It is another windfall for Americans. As for the names in natural gas, it is another blow, although longer-term, the pendulum will swing back, especially as the war on coal takes an even deeper toll on that industry.
What a way to head into Christmas and New Year's… new all-time highs on the market, powered higher on good news. The final third quarter GDP number is 5.0%, well above all estimates and hinting at the US being on the cusp of moving into the next gear. It's the best back to back quarters since the end of 2003.
But business investment was flat in October which hints at private industry reluctant to make long term commitments that would help this momentum become more than a blip.