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Yearly Archives: 2013

NY Rep. Peter King: Nobody in NY or NJ Should Give One Penny to Republicans, If They Do Then They Should Have Their Head Examined

“We have become used to the whining of Chuck Schumer but when a House Republican blasts his own, it seems the dysfunction runs deep (or the fair did not quite meet the balanced). NY Rep. Peter King lashes out at the pork-laden ‘deal’ we all just witnessed (and the market cliff-gasm’d over) as the failure to vote on the relief measure for Superstorm Sandy prompted him to exclaim the GOP leadership has “turned its back on those people” who continue to suffer. As CNN reports, King said he was “chasing [Boehner] all over the House,” and reminded House Republicans that they seem to “have no problem finding New York when they want money,” and the frustrated Congressman added, “I would not give one penny to [The Republicans] based on what they did to us last night.” Simply put, King proclaims that a number of Republicans may “kiss their seats goodbye…because if you can’t provide the most basic assistance for your district, who needs you in Congress?” “

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Ratings Agencies Will Look the Other Way As U.S. Buys Time

“The United States may have bought some time in avoiding another credit downgrade with the fiscal cliff deal, but the major ratings agencies are keeping a close watch on what happens next in government debt talks.

The big credit agencies will probably not pass judgment until they get more visibility on the U.S. debt ceiling and longer-term plans to reduce borrowing, CNNMoney predicted.

Standard & Poor’s late last month repeated a warning that the U.S. could face another downgrade by 2014 — or sooner — if Congress does not find a solution for reducing the national debt….”

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House Fails to Take Up Sandy Aid Bill

“WASHINGTON—In a surprise decision, the leadership of the House of Representatives said late Tuesday that there would be no more votes in the chamber until a new Congress is sworn in, dealing a major setback to the effort to quickly pass a $60 billion measure aimed at helping the Northeast rebuild after superstorm Sandy.

The news that there would be no votes on Wednesday came just hours after lawmakers from the Northeast expressed optimism that a deal was in place to bring the measure to the floor Tuesday night or Wednesday.

But just after the House approved a bill averting the so-called fiscal cliff, the Republican leadership made clear to members that the 112th Congress was ending. The move drew a parade of Northeastern representatives from both parties to the House floor to express outrage.

“It is with an extremely heavy heart that I stand here almost in disbelief and somewhat ashamed,” said Rep. Michael Grimm, a Republican from Staten Island. Mr. Grimm said that for the first time, he was “not proud of the decision that my team has made.”

 

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Portugal May Fail to Fall Inline as Budget Proposal Rejects Austerity

“LISBON—A political rift was opened in Portugal on Wednesday after the country’s president sent the 2013 budget to its highest court for review, an unusual move that highlights deepening opposition to a two-year austerity drive.

President Anibal Cavaco Silva, who is the head of state and belongs to the same right-of-center political party as Prime Minister Pedro Passos Coelho, signed the budget bill into law on Monday, but expressed reservations the next day. In a late televised address to the nation, he expressed doubts about the budget’s “distribution of sacrifices,” while calling for an end to the “recession spiral” the country is undergoing.

Analysts say Mr. Cavaco’s decision marks a compromise following pressure from critics who question the budget’s fairness, such as the country’s National Association of Judges, and also allows the country to have a budget in place while the issue is being resolved….”

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Global PMIs Make a Turnaround

 Source

“LONDON (Reuters) – Global manufacturing activity expanded last month for the first time since May, supported by solid output gains in China, the United States and Britain, a business survey showed on Wednesday.

JPMorgan’s Global Manufacturing PMI, produced with research and supply management organizations, rose to 50.2 in December from November’s 49.6, nudging above the 50-mark that divides growth from contraction for the first time in seven months.

“PMI survey indices for output, new orders and employment continued to lift at the end of 2012, as the global manufacturing sector stabilizes following a softer patch in the middle of the year,” saidDavid Hensley, director of global economics coordination at JPMorgan.

As output rose for the second straight month, factories increased staffing levels for the first time since June, the survey found.

Earlier data showed U.S. manufacturing ended 2012 on a modest upswing, as increased demand at home and abroad helped the sector to grow in December at its fastest rate in seven months.

But euro zone factories sank deeper into recession with new orders tumbling – a sharp contrast to continuing signs of revival in China.

The index combines survey data from countries including the United States, Japan, Germany, France, Britain, China and Russia.

(Reporting by Jonathan Cable; editing by Stephen Nisbet) “

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Natty Gas Gets the Homo Hammer as Weather Forecasts Predict Mild Weather

 

“Natural gas futures in New York tumbled the most in more than three years on forecasts of moderating temperatures that may reduce demand for the power- plant fuel.

Gas dropped as much as 9 percent after Commodity Weather Group LLC in Bethesda,Maryland, said colder-than-average weather in most of the lower-48 states this week would give way to above-normal temperatures from Jan. 7 through Jan. 11. The low in New York on Jan. 9 may be 38 degrees Fahrenheit (3 Celsius), 11 higher than usual, according to AccuWeather Inc.

“We’re going to see some warm weather across the primary gas-consuming regions,” saidGene McGillian, an analyst and broker at Tradition Energy in StamfordConnecticut. “As we get into the new year without signs of sustained cold weather, the fundamental picture is going to force us lower.”

Natural gas for February delivery fell 12.5 cents, or 3.7 percent, to $3.226 per million British thermal units at 10:14 a.m. on the New York Mercantile Exchange. The intraday percentage decline was the most since Sept. 11, 2009. The futures have risen 8 percent from a year ago. Trading volume was up 48 percent from the 100-day average at 10:15 a.m.

Gas slid to $3.05 in electronic trading, the lowest price since Sept. 26, before rebounding. A 900-contract sell order at 7:52 p.m. yesterday caused the “scary” drop, Drew Wozniak, vice president of market research and analysis at ICAP Energy LLC in Louisville, Kentucky, said in a note to clients today….”

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GARTMAN: The Fiscal Cliff Deal Is Anti-Marriage And We’re Now One Step Closer To Socialism

“….Dennis Gartman publisher of The Gartman Letter wasn’t too happy with the deal. First he criticized it for being overtly anti-marriage, second, he said it failed to tackle the “egregious lack of discipline on spending” and said President Obama was leading the country towards socialism. Finally, he was also critical of the fact that this bill originated in the Senate, whereas he writes, “according to the Constitution all fiscally related legislation must originate in the House”. Here is his take on the fiscal cliff deal:

“We’ve no great disagreement with the legislation as it stands except for the fact that this is an overtly anti- marriage decision and therefore manifestly discriminatory on its face and there is of course a marked lack of spending cuts and as we all know the problem with the US fiscal deficit is not one of revenue but is one of egregious lack of discipline on spending. Regarding the former concern, unmarried up-income couples will have their taxes held at current levels while upper-income married couples with the same incomes will see their taxes raised materially. Even the French Supreme Court has found that wrong.

Regarding the former concern, we point to the chart [see below] regarding welfare spending which has now reached $1 trillion per year and we are not including here spending on Social Security and Medicare. These are simply unemployment benefits, spending on food stamps and other true “welfare” related programs. And to remember, the figures included here are for 2011. 2012 shall obviously have been far higher and 2013 shall be higher still.

We shall not mince words here then: What the House and the Senate have agreed upon… and what the President has said he shall sign… is horrible legislation and were we a Congressman or Senator we’d have voted against it so long as we had “cover” to do so; but the government needed to be funded; taxes need to be raised; armies, navies and air forces need to be secured et al and in the end there was no choice but to vote for the legislation’s passage. The Left has won. The President has succeeded in moving the country along the path toward socialism. Those who have succeeded in life will pay for that success with higher taxes; those who’ve failed will be paid by those who’ve succeeded. Paul will be paid by Peter and Paul’s support has been won … perhaps eternally….”

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Hitting the Wall Face First

“Quote Of The Year. And The Next. I came upon this quote a few weeks ago in an interview that Der Spiegel had with Dennis Meadows, co-author of the Limits to Growth report published by the Club of Rome 40 years ago. Yes, the report that has been much maligned and later largely rehabilitated. But that’s not my topic here, and neither is Meadows himself. It’s the quote, and it pretty much hasn’t left me alone since I read it.

Here’s the short version:

[..] … we are going to evolve through crisis, not through proactive change.

And here it is in its context:

‘Limits to Growth’ Author Dennis Meadows ‘Humanity Is Still on the Way to Destroying Itself’

SPIEGEL ONLINE: Professor Meadows, 40 years ago you published “The Limits to Growth” together with your wife and colleagues, a book that made you the intellectual father of the environmental movement. The core message of the book remains valid today: Humanity is ruthlessly exploiting global resources and is on the way to destroying itself. Do you believe that the ultimate collapse of our economic system can still be avoided?

Meadows: The problem that faces our societies is that we have developed industries and policies that were appropriate at a certain moment, but now start to reduce human welfare, like for example the oil and car industry. Their political and financial power is so great and they can prevent change. It is my expectation that they will succeed. This means that we are going to evolve through crisis, not through proactive change.

I don’t really think that Dennis Meadows understands how true that is. I may be wrong, but I think he’s talking about a specific case here . While what he makes me ponder is that perhaps this is all we have, and always, that it’s a universal truth. That we can never solve our real big problems through proactive change. That we can only get to a next step by letting the main problems we face grow into full-blown crises, and that our only answer is to let that happen.

And then we come out on the other side, or we don’t, but it’s not because we find the answer to the problem itself, we simply adapt to what there is at the other side of the full-blown crisis we were once again unable to halt in its tracks. Adapt like rats do, and crocodiles, cockroaches, no more and no less.

This offers a nearly completely ignored insight into the way we deal with problems. We don’t change course in order to prevent ourselves from hitting boundaries. We hit the wall face first, and only then do we pick up the pieces and take it from there….”

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Timothy Geithner: Debt Limit Exceeded, Now Time to Avoid Default

“WASHINGTON — The U.S. government is running up against its $16.4 trillion borrowing limit and is taking steps to avoid default.

Reaching the limit Monday sets up another dispute between the White House and Congress over taxes and spending in the new year.

Treasury Secretary Timothy Geithner says the government will take a series of accounting measures to avoid defaulting on its debt. On Monday, it suspended the issuance of new debt for two government retirement funds. That step won’t impact current retirees.

Last week, Geithner said the measures would save about $200 billion. That would typically avoid default for about two months. But Geithner said it is difficult to predict how long default can be avoided this time because of ongoing budget talks….”

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Is it Time for TIPS?

 

“….Jakobsen notes that investors are ushering in 2013 with some of the highest expectations for the stock market since 1999, with not a single Wall Street house expecting the S&P 500 SPX 1.69% to take a hit this year. And that’s despite a number of factors that could get markets upset, including tax hikes, austerity and a general slowdown in world growth.

“This means the main return needs to come from multiple expansion, which we find hard to imagine considering the tail-risks,” such as the debt ceiling, and Italian and German elections, says Jakobsen. He suggests investors cut back on their equities exposure and go heavier on Treasury Inflation Protected Securities and commodities…”

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U.S. PMI Hits a 7 Month High at at 54

“NOTE: The PMI was initially reported as 54.2.  However, the number has since been corrected to 54.0.

The December reading of the US purchasing managers index is out, and the number looks good.

PMI jumped to 54.0 from 52.8 in November.  This is also better than economists’ expectation calling for  53.6.

Any reading above 50 signals expansion in the industry.

Here are key points from Markit:

  • Strongest rate of output growth since May
  • Total new work increases at solid rate, with new export orders also rising
  • Input price inflation remains marked, albeit weaker than in November

From Markit’s Chief Economist Chris Williamson: ”

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2013 is So Behind Us…Time to Focus on 2014

“Most of the forecasts for the economy and stock markets for 2013 are in. Now that the fiscal cliff has been avoided, and the debt cap debate has moved until the end of the first quarter, the stock market will rise and U.S. gross domestic product should move moderately higher. These things and other critical decisions about economic policy in the United States and abroad mean that forecasters can focus on 2014.

Angela Merkel recently said that the sovereign debt emergency in Europe is not over, and will not be for some time. If she is right, her statement must be based on a lack of GDP recovery in the economies of a number of European Union nations. It is hard to quarrel with the effects that depressionlike economic conditions in Greece and Spain, where unemployment has stayed above 25%, will dissipate. GDP will not recovery quickly enough in France or Italy for their budgets to post surpluses. Each of these nations can only hope that they are no longer the focus of investors’ dread, which means their borrowing costs will remain relatively low. Each may be able to raise money through new sovereign debt issuance. That does not solve the foundation issue that there is no reason to argue that Europe will emerge from flat or negative growth in 2014.

Even if the battle over the U.S. debt cap and budget ends in the first half of 2013, the ripples of the fight may last well beyond the end of the year. Businesses that have stepped back from spending and hiring have to contend with the slow growth that doubt about the fiscal cliff has caused already. And some will struggle to comply with new health care costs. Consumer spending probably will slide long enough to hurt GDP in the first half. Americans, in some number, already have set household spending based on a fear of increased taxes. Perception about the ec0nomy has not changed as much as many experts claim. A recent poll by Gallup shows that “By almost a 2-1 margin, (Americans) predict 2013 will be a year of economic difficulty rather than a year of prosperity.”

So, the second half would have to post a strong recovery for early 2014 to hit a period of 4% or 5% GDP growth. That remains the Holy Grail of expansion — the kind of expansion that could help America eat into its debt. Almost no one believes that 2014 can be that strong, particularly in light of the lack of solutions to the federal government’s longer term problems, some of which center on the lack of an agreement on entitlement spending.

The Federal Reserve has set a jobless number of 6.5% to be the level at which it can withdraw its colossal support of the economy. Bernanke has signaled he does not expect that level to be hit this year. If he is right, unemployment will remain above 7%, at least through most of 2013. Based on the calculation many experts use, which includes the underemployed and underattached parts of the workforce, unemployment will stay above 10% into 2014 — hardly a recovery….”

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Average Estimates Show an 11% Rise for the DOW in 2013

“As each new year arrives, 24/7 Wall St. looks at each of the 30 Dow Jones Industrial Average components and assigns a forward value for the Dow based on a mixed methodology. We have actually come within about 1% for each of the peak projection of the DJIA in past three years using this methodology. We are not just looking for individual stocks to buy in 2013. We use consensus price targets from Wall St. analysts and we use an equal weighting of the components rather than the price-weighting used to calculate the DJIA….”

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$MS Analyst Says the New Normal for BRICs is 5%

“Goldman Sachs economist Jim O’Neill famously coined the phrase “BRICs” in 2001 to describe the bloc of emerging markets — Brazil, Russia, India and China — whose growth was so explosive that their markets were on their way to eclipsing America’s.

In the December issue of Foreign Affairs, Ruchir Sharma, head of Morgan Stanley Investment Management’s emerging markets desk, argues that the miracle of the BRICs is over.

…the new normal in emerging markets will be much like the old normal of the 1950s and 1960s, when growth averaged around five percent and the race left many behind.

BRIC growth was a fluke, Sharma says, fueled by the waning of the wave of economic crises in the late-90s  and subsequent “global flood of easy money.”

And now?

…there is a lot less foreign money flowing into emerging markets. The global economy is returning to its normal state of churn, with many laggards and just a few winners rising in unexpected places.

The main culprit is China, whose population “is simply too big and aging too quickly” to sustain its breakneck growth, he says. We can instead expect a “three-to-four percent slowdown” there….”

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Gapping Up and Down This Morning

NYSE

GAINERS

Symb Last Change Chg %
SCM.N 16.38 +0.91 +5.88
ABT_w.N 31.40 +1.40 +4.67
PBF.N 29.05 +1.24 +4.46
RIOM.N 5.11 +0.13 +2.61
IRET.N 8.73 +0.18 +2.11

LOSERS

Symb Last Change Chg %
RESI.N 15.84 -0.45 -2.76
ABBV_w.N 34.16 -0.36 -1.04
SXE.N 23.62 -0.16 -0.67
RH.N 33.73 -0.16 -0.47

NASDAQ

GAINERS

Symb Last Change Chg %
AMRS.OQ 3.12 +0.67 +27.35
UNXL.OQ 13.69 +2.86 +26.41
HMNY.OQ 3.90 +0.77 +24.60
LXRX.OQ 2.22 +0.31 +16.23
PLPM.OQ 3.48 +0.48 +16.00

LOSERS

Symb Last Change Chg %
UBPS.OQ 4.55 -0.70 -13.34
VISN.OQ 3.05 -0.40 -11.59
ACFC.OQ 2.05 -0.25 -10.87
NCIT.OQ 4.69 -0.52 -9.98
CYCCP.OQ 4.51 -0.49 -9.80

AMEX

GAINERS

Symb Last Change Chg %
FU.A 3.23 +0.15 +4.87
SAND.A 11.80 +0.34 +2.97
EOX.A 5.24 +0.12 +2.34
WVT.A 10.35 +0.17 +1.67
SVLC.A 2.52 +0.04 +1.61

LOSERS

Symb Last Change Chg %
MHR_pe.A 22.90 -0.40 -1.72
CTF.A 21.15 -0.29 -1.35
BXE.A 4.28 -0.02 -0.47

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