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One Minute Macro Update - Don’t Forget About Small Businesses
U.S.: Markets are mixed this morning as they await Thursday’s EU meeting on the future of the EFSF. Yesterday showed that rising oil prices will likely cause a debate within the Fed as the rise could either accelerate inflation or even halt economic growth. Dallas Fed President Richard Fisher told conference attendees that QE2 may need to be scaled back to prevent inflation while Atlanta Fed President Dennis Lockhart supported a possible QE3 to avoid another recession. The debate will likely escalate along with ongoing violence in the world’s oil centers. Consumer credit rose for the fourth consecutive month, increasing $5.0B in January v $3.5BE, led by federal government lending. Meanwhile, revolving credit fell $4.2B, showing a still cautious consumer despite higher borrowing. Today’s NFIB survey release at 95.0E v 94.1 prior came in at 94.5. The rise is indicative of easier lending and improved employment figures, but we note that small business still lag large ones in economic progress.
Europe: Portuguese debt yield rose and Irish 10Y bond yields reached a nearly eleven year high yesterday after the Greek debt rating downgrade sent a sharp reminder of the sovereign debt troubles in the Euro zone. After yesterday’s news, Greece sold €1.625 in 26W bills today at 4.75% v 4.64% prior with b/c at 3.59x v 5.54x prior. German factory orders rose 2.9% v 2.5%E, in line with recent gains in manufacturing figures. The European Banking Authority released details about the next round of banking sector stress tests for the region. The stress scenario excludes the event of a sovereign default, but includes a 0.5% Euro zone contraction this year, a 15% price decrease in European stocks, and greater tightening in funding markets. Official methodology for the tests will be provided on March 18. Preliminary language around the potential naked CDS ban indicates that the market impacts will likely be slight as the language will likely provide a low hurdle for traders to leap.
Asia: Asian markets are in suspense awaiting oil’s next move as the region’s economies are already suffering from inflation pressures. Economist surveys see Thai and Korean interest rates increasing by 25bp this week. Several reports out of China yesterday indicate a further raise in RRR is possible this week depending on economic conditions. Today will see the release of Japanese machine orders at MoM +3.0%E v +1.7% prior and YoY +5.1%E v -1.6% prior, which will provide some insight on activity in the slowing economy. Australian home loan figures are estimated to drop -1.0% v 2.1% prior, likely moving along with recent news of the country’s rising real estate bubble.
From Brian Yelvington of Knight Capital
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ONLY BUY WEED FROM YOUR LOCAL DEALER DOWN THE STREET! SUPPORT LOCAL SMALL BUSINESSES!!
Funny you should mention that guy; he's been getting bold lately and replaced the streetlight in front of his house with a green bulb.
HAHAHAHAHAHA!! THAT'S COOL!
can't wait untill the day he give a tax receipt when you buy a bag :)
you should take a picture and post it here :)
So rather than a large corporate box/syndicate where profits get shipped to Wall Street (or Columbia), a larger proportion of profits stay within a community with small businesses and can help support infrastructure because of their vested interest in maintaining a viable economic community?
Edit: To aid in this model we should really support the made in USA approach. Maybe call it Support Home Grown movement?
Dick Fisher. Ha.
Small businesses? No body gives a shit about small business. If I had a nickel for every time a politician said he was going to "help" small businesses, my small business wouldn't be small. Conversely, if every politician actually followed through on promisies to "help" small businesses, my small business wouldn't be small. But all I really want is for the politicians to get the fuck out of they way, and give me the freedom to operate my business the way I see fit. WTF do they know about small businesses, anyway?
So what are your top two gripes and how would they materially affect the growth of your business? What do you 'see fit' that you aren't allowed to do because of 'the state'? Just playing devil's advocate here to make sure you aren't just playing the victim to cover for personal failures of some kind.
Well, I live in NJ. I am an unpaid tax collector for the State. Then there's licensing requirements, which cost me both time and money. Then, there's the fact that the State, and local towns play favoritism by granting specific tax breaks to certain businesses which creates an unfair competitive advantage and sends false market signals to other potential businesses and investors. Then there's zoning. Don't even get me started on zoning. Then, there's bullshit inspections. (I'm a builder). I've been in some of those Hovnanian and Ryan homes, and there's no way I would be allowed to get away the shit they do. The only way, it seems, to be able to do business anymore, is to kiss the asses of the local and state politicians.
Me too........and couple all you said together with the fact that people aren't putting money into their homes any longer, and it seems we are screwed my friend.
Well, after two years, my phone is starting to ring again. Mostly small stuff, but enough to pay the bills.
Read an interesting article today "You Want Small Business to Start Hiring? Here's What To Do"
http://www.oftwominds.com/blogmar11/small-biz3-11.html
Not being an American I can't really comment on his suggestions other than to agree with:
The last thing the toadies and parasites in Washington want is to upend the structural imbalances which feed their Masters, the Financial Power Elites and crony-Capitalist cartels.
Your healthcare system is well and truly broken. You spend way more than anyone else in the world but have the 37th best system by some measures.
No, no personal failures. I showed a profit in every year. Not much, but show me any business that shows a profit in any of its first five years. I built my business by starting small and reinvesting profits, not through debt, which is why I am still in business.
Another small builder friend of mine, who has been building houses for over 30 years, and owns a real estate company, owns some property and he wanted to build a few duplexes on it. But the town said NO! They don't "like" duplexes. Meanwhile, the same town gave Ryan approval to build their suck-ass townhomes in the same neighborhood. I guess they knew whose ass to kiss.
One more story before I have to go. The same builder friend of mine (who, BTW, subs me a lot of work) owns a rental property which needed a new roof. Since he got screwed by his regular roofing contractor, who didn't have liability insurance, he decided to do it himself, and just hire the workers himself. He went to City Hall to get a builders permit, and was told he needed a "home improvement contractor's" license. He told them he had a builder's license, but that wasn't good enough. He then informed them that he owned the property, and in NJ, a homeowner doesn't need a license to perform the work, just a permit. The idiot at City Hall informed him that he did not own the property, a company called State Street Development owned the property. Well, he owns State Street Development. That's when the hollering started. He finally did get the permit, after spending an entire day there.
Then there's the fact that it can take over a year just to get a building permit to build a home.
I could go on for days.
So preferential taxation, building inspections, and zoning restrictions.
You'll get no argument from me that the first complaint is crap...loopholes should be closed around politicians necks and cinched tight.
Building inspections I'm a little less sympathetic about...I can see the value in having minimum standards, but I'm willing to entertain the idea that most of them are more about revenue generation than public safety.
Zoning restrictions are even more onerous, but I can see the value in greenspace and an unbroken skyline.
I'm glad to hear that you're starting to see some business pick up despite the shitstorm that is our economy and, as a self-employed guy, sincerely hope that you continue to succeed. Thanks for the meaningful and respectful reply.
It's a crying fucking shame that small businesses will be asymmetrically hit by the oil spike since they have tighter margins to begin with and can't hedge on the crimex like the big boys.
/ES
Fun day for Bears? Possible looking at the VIX and the Dollar. /ES Wolfe Wave target of 1216.
http://www.zerohedge.com/forum/99er-charts-0
Wait, avoid another Recession? I hadn't realized we pulled out of the first one.
recession?
Jezzzz. Finally the Europeans are meeting about it.
all we need now is a 20 year planning on how to.... what was the topic again?...
We are all pretty nervous, if not, we are ignorant.
http://www.hedgefundlive.com/blog/tuesday-market-expectations-we-are-all-pretty-nervous-if-not-we-are-ignorant