I for one heard many people react verbally against Muslims and felt disgust for those jumping to such conclusions.
Again by posting this i am not making a statement about the recent events, but i think it is important to explore all facets of a complicated ongoing story.
[youtube://http://www.youtube.com/watch?v=TBobEiXInxQ 450 300] Comments »“I recently posted two pieces discussing that the peak of economic growth was likely behind us. (See here and here) In particular both pieces addressed personal consumption expenditures and their importance to the overall strength and direction of the economy. To wit:
“…personal consumption expenditures (PCE) comprise about 70% of the gross domestic product calculation. As PCE goes – so goes the economy.”
The importance of consumption on the overall economy should not be overlooked. While, in the economic cycle, it is production that comes first, as it provides the income necessary for individuals to consume, it is ultimately consumption that completes the cycle by creating the demand. This is the problem that government, and the Fed, face today.
Despite repeated bailouts, programs, and interventions – economic growth remains mired a sub-par rates as consumers struggle in a low growth/high unemployment economy. Businesses, which have been pressured by poor sales, higher taxes and increased government regulations, have learned to do more with less. Higher productivity has lead to less employment and higher levels of profits.
The dark side of that equation is that less employment means higher competition for jobs which suppresses wage growth. Lower wage growth and incomes means less consumption which reduces the aggregrate end demand. In turn, lower demand for products and services puts businesses on the defensive to “do more with less” in order to protect profit margins. Wash, rinse and repeat. This is why deflationary economic environments are so greatly feared by the Fed as that virtual spiral, between production and consumption, is incredibly difficult to break.
This brings us to the latest report from Goldman Sachs entitled “The Consumption Setback” (via Zero Hedge) which discusses the reality that consumer is slowing down which will likely have a negative impact on future growth. This is a fairly sharp turn from their previous stance of an economic comeback in 2013 which I have previously argued heavily against.
Comments »A Consumption Setback
Coming into this year, we expected a notable slowdown in real personal consumption expenditures (PCE) from around 2% in 2012 to a 1% (annualized) pace in the first quarter of 2013. The main reason was the hit to disposable income resulting from…..”
” “Germany’s top central banker warned that the European debt crisis could take a decade to overcome, apparently contradicting claims from other top European officials that the worst has passed.
He also predicted that the European Central Bank (ECB) might cut interest rates depending on future economic developments.
“Overcoming the crisis and its effects will remain a challenge over the next decade,” Bundesbank President Jens Weidmann told The Wall Street Journal.”The calm that we are currently seeing might be treacherous” if reforms are delayed, he said.
“Everyone is asking what more can the central bank do instead of asking what other policymakers can contribute,” Weidmann noted, adding that the central bank could cut interest rates if new information warranted such a move.
“We might adjust in response to new information,” however, “I don’t think that the monetary-policy stance is the key issue.” The ECB cut its key interest rate to a recod low 0.75 percent in July.
European Commission President Jose Manuel Barroso last week claimed that the worst of Europe’s crisis has passed. “I believe that the EU has come through the worst of the crisis but the situation is still fragile,” he told reporters during a visit to Prague, according to various newswire reports.
Meanwhile, Weidmann said that “a point that I think is important to make — perhaps less for my central bank colleagues than for finance ministers — is that the medication monetary policymakers administer only cures the symptoms and that it comes with side effects and risks.”
The International Monetary Fund (IMF) warned Wednesday that eurozone companies face a massive “debt overhang” that could extend the downturn and possibly spark a more serious crisis, The Washington Post reported….”
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Downgrades – APA, EBAY ,EXP, FDX, HBAN, QGEN,
Upgrades – AGU, AIG, ASML, BBY, HFC, JNJ, POT, SNDK, TXT, THRX, TRV, UPS
Comments »Continuing claims: Prior 3079k, market expects 3068k, actual 3068k
Comments »“Students with large loan burdens, because of the debt taken on for their educations, likely are not buyers of expensive items such as homes and cars. Perhaps all of their debt makes them less attractive candidates for loans. Or, they may believe their obligation will leave them bankrupt.
The results of a study by the New York Fed show what almost everyone with a high school education knows about student loan debt:
Student loans have soared in popularity over the past decade, with the aggregate student loan balance, as measured in the FRBNY Consumer Credit Panel, reaching $966 billion at the end of 2012. Student debt now exceeds aggregate auto loan, credit card, and home-equity debt balances — making student loans the second largest debt of U.S. households, following mortgages. Student loans provide critical access to schooling, given the challenge presented by increasing costs of higher education and rising returns to a degree. Nevertheless, some have questioned how taking on extensive debt early in life has affected young workers’ post-schooling economic activity….”
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“Gasoline prices continue to decline very sharply. Over the past month, they are down another 5%, and soon will fall below $3.50. If low gas prices tend to help the economy, gross domestic product (GDP) should get a boost this quarter.
The AAA Fuel Gauge put the price of a gallon of regular nationwide at $3.512 yesterday, down from $3.692 a month ago, as well as from $3.899 a year ago. Other than Hawaii, where the price for regular is $4.385, not a single state has an average price above the $4 level. And $4 often is seen as the mark at which the media and economists say the cost will undermine consumer and business activity, regardless whether that is exactly true.
Oil prices are not a perfect predictor of gasoline prices because, among other things, of the roles of refinery and transport. However, oil is by far the largest contributor to the price. And oil prices continue to fall rapidly. The price of crude sits just below $86, down from a 52-week high of $106, as well as $95 just five days ago. The irony of the price drop is that it is based largely on a drop in global demand, due to the slowing of major economies. In the meantime, the drop will stimulate American GDP….”
Comments »BOSTON (AP) — In what could be a major break in the Boston Marathon case, investigators are on the hunt for a man seen in a department store surveillance video dropping off a bag at the site of the bombings, a local politician said Wednesday.
Separately, a law enforcement official confirmed that authorities have found an image of a potential suspect but don’t know his name.
The development — less than 48 hours after the attack, which left three people dead and more than 170 wounded — marked a possible turning point in a case that has investigators analyzing photos and videos frame by frame for clues to who carried out the twin bombings and why.
City Council President Stephen Murphy, who said he was briefed by Boston police, said investigators saw the image on surveillance footage they got from a department store near the finish line and matched the findings with witness descriptions of someone leaving the scene.
“I know it’s very active and very fluid right now — that they are on the chase,” Murphy said. He added: “They may be on the verge of arresting someone, and that’s good.” …”
Comments »“NEW YORK (AP) — Morgan Stanley says profit and revenue dipped in the first quarter. Results beat Wall Street’s expectations, but the stock still dipped in pre-market trading.
Revenue from the investment bank slipped, while revenue from asset management rose.
Earnings totaled $1.2 billion, down about 12 percent from a year earlier. Per share, those earnings amounted to 61 cents, beating the 57 cents expected by analysts polled by FactSet.
Revenue totaled $8.5 billion. That was down 5 percent from a year earlier, but it beat analysts’ expectations of $8.3 billion.
The earnings and revenue exclude the effect of an accounting charge related to the value of the bank’s debt.
The stock dipped in pre-market trading, down 7 cents to $21.40.”
Comments »“NEW YORK (MarketWatch) — Verizon Communications Inc. VZ +1.53% reported first-quarter net profit rose 15.8% to $1.95 billion, or 68 cents per share, from $1.69 billion, or 59 cents per share, a year earlier. Revenue rose 4.2% to $29.42 billion from $28.24 billion, the company said Thursday. Analysts had expected profit of 66 cents a share on revenue of $29.55 billion. The company said it added a net 677,000 retail postpaid customers, up 35% from a year earlier, and had a 1.01% churn rate for that category. Verizon shares were higher in premarket trading.”
Comments »“Finnish mobile phone maker Nokia trimmed its losses in the first quarter, thanks to stronger Lumia smartphone sales.
But the shares fell 10.7 percent in Helsinki because of weaker than expected guidance for the second quarter.
Nokia, which has fallen behind Samsung and Apple in the smartphone race, said it sold 5.6 million units of Lumia handsets in the first quarter, up from 4.4 million in the previous quarter….”
Comments »“AutoNation Inc. (SAH), the largest U.S. retailer of new cars and trucks, reported quarterly profit that beat analysts’ estimates as the housing and energy industries helped boost demand for vehicles.
First-quarter net income rose to $83 million from $73 million a year earlier, the Fort Lauderdale, Florida-based company said today in a statement. Profit from continuing operations climbed 21 percent to 68 cents a share, topping the 64-cent average estimate of 13 analysts surveyed by Bloomberg. Sales increased 12 percent to $4.1 billion.
AutoNation benefited from stabilization and recovery in the housing market, particularly in states such as California, Nevada, Arizona and Florida, Chief Executive Officer Mike Jackson said in a telephone interview. The retailer also is getting a boost from growth in the energy sector inTexas, as well as a broader U.S. auto market that Jackson forecasts will increase by about 1 million new-vehicle sales this year.
“Those three bright spots in the economy — energy, housing and automotive — all work for us,” Jackson said. “For the automotive recovery, we still think we’re in the early innings.”
AutoNation began to rename all of its mass-market brand franchises in the first quarter of this year after posting record profit for 2012. The dealership group’s non-luxury domestic and import franchises will use the AutoNation moniker.
The company has shifted about 30 percent of those franchises to names such as AutoNation Chevrolet of Pembroke Pines, a store between Miami and AutoNation’s headquarters in Fort Lauderdale. The franchise was previously Maroone Chevrolet of Pembroke Pines.
“Group of 20 nations will affirm a commitment to avoid weakening their currencies to gain a trade advantage, according to a draft statement prepared for a meeting this week in Washington, Bloomberg BNA reported.
The statement, seen by a Bloomberg BNA reporter, maintains a February pledge to “move more rapidly toward more market- determined exchange rate systems and exchange-rate flexibility” and to refrain from competitive devaluations. Meetings of finance ministers and central bankers start today….”
Comments »“A scary head-and-shoulders pattern could be building in the S&P 500, and this negative chart formation would be created if the market stalls just above current levels.
“It’s developing and it’s developing fast,” said Scott Redler of T3Live.com on Wednesday morning.
Redler follows the short-term technicals of the market, and he says the head and shoulders should be proven either way in the next few trading days. “Anticipating this type of pattern has been painful this year,” he said. The head and shoulders is seen by technicians as a signal of more selling to come.
“The bears are hanging their hat on the idea that this bounce back will lead to a lower high, potentially a right shoulder that continues in the 1575 area,” said Redler, describing the pattern after Tuesday’s close. “The first pullback of the year was March 20 with the Italian election. The left shoulder was built during the month of March, with the peak being around 1573. Then you had a head when it hit its high at 1597.”
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Redler said if the pattern forms, the measured move from 1597, or the head, to the neckline would be take it to 1538-1542. The S&P could then move down to 1490-1510. A pivot point could then be 1472….”
“A massive explosion at the West Fertilizer Co. rocked the small town of West, Texas, late Wednesday night, leaving more than 100 people reported injured and many feared dead.
“It was like a nuclear bomb went off,” said West Mayor Tommy Muska to CNN.
According to Sgt. Patrick Swanton of the Waco Police Department, the first call of a fire came in at 7:29 PM local time. Firefighters and other emergency workers responded to the call and began evacuating the area.
Minutes later, the devastating explosion occured. The first call of the explosion came in at 7:53 PM local time said Swanton.
More than 100 victims have been treated at Hillcrest Hospital in Waco, Texas. And at least 60 more have been treated at Providence Hospital.
“I will confirm there have been fatalities,” said Swanton who estimated 5 to 15 were thought to be dead.
Swanton also said that between 3 and 5 firefighters were missing.
There were a “tremendous amount of injuries and we do have confirmed fatalities,” said D.L. Wilson, a spokesman for the Texas Department of Safety at a conference late Wednesday night, He was not able to provide specific numbers.
The blast was so massive that it registered as a 2.1 magnitude earthquake, according to the USGS.
Wilson said the aftermath resembled a war zone….”
Comments »“UnitedHealth Group says its first-quarter net income dropped 14 percent, as the health insurer’s medical costs climbed, and it booked a smaller gain due to leftover insurance claims.
The Minnetonka, Minn., insurer also says it still expects 2013 earnings to range between $5.25 and $5.50 per share.
In the three months that ended March 31, UnitedHealth earned $1.19 billion, or $1.16 per share. That’s down from $1.39 billion, or $1.31 per share, a year ago. Revenue rose 11 percent to $30.34 billion.
Analysts expect earnings of $1.14 per share on $30.54 billion in revenue.
The nation’s largest insurer booked a $280 million gain because claims left over from previous quarters came in lower than expected. That compares to a $530 million gain in last year’s quarter.”
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