While some would argue (as they always do) that there are good reasons to be bullish going into 2014 (central bank liquidity provision being an obvious one); there are ample reasons to remain vigilant with respect to your investments. The stagnation of wage growth combined with higher costs leaves an already cash strapped consumer with few options. It is likely that we will see a push by consumers to re-leverage their household balance sheet which will be hailed by the media as a return of consumer confidence. However, one should not forget the last time a highly levered consumer ran into problems. Furthermore, there are three potential headwinds that are likely to weigh on the economy and the markets which are potentially being overlooked.
Farewell Mareeaah. The Money Honey who epitomized CNBC in its high flying (pardon the pun) years when it was actually a source of useful information, has just marked the nadir of the TV station which in the past five years rebranded itself stock market propaganda central, and whose viewership plunged appropriately to a 20 year low as we recently reported. As Drudge reports, Bartiromo whose contact is up, is moving to Fox Business. From Drudge: "DRUDGE has learned that Maria Bartiromo is jumping to FOX BUSINESS NETWORK with an announcement expected sometime soon. Sources close to the situation say there have been ongoing conversations throughout the Fall. The new deal calls for Bartiromo to anchor a daily market hours program on FOX BUSINESS. Insiders say there will be a role on FOXNEWS as well."
The old idiom “you can lead a horse to water, but not make him drink” has proven itself true in the course of human learning. Or rather, it would be more accurate to label it man’s inability to learn from mistakes. You can hold a mirror up to grotesque instances of hypocrisy, but most men will remain mules – stubborn in their prejudice and beliefs. The ability to heed lessons from blunders is, often times, a skill unable to be mastered by the mass populace. The mule, being a universal symbol for stubbornness, has become indistinguishable from the average news and politics ingester. Toeing the carefully-planned ideological path of media personalities, divergence from party line is a hurdle most pedestrians are incapable of clearing. What’s not done is a forthright attempt to continually rectify our wrongs and pursue truth – even when it conflicts with inner bias. It’s far less painful to not acknowledge faulty logic.
Subdued headline inflation hides the inimitable rise of prices across the country; but ConvergEx's Nick Colas examines the pace of inflation in four large cities across the US – Boston, Chicago, New York and San Francisco. All are home to multitudes of urban working professionals, share the same currency and have similar macro economies, though, Colas notes, the trend of price increases varies considerably (particularly with regards to NYC vs. the rest). The cost of living is up in all four cities since 2008. Incomes, too, are generally higher – although not in New York, likely a result of the Big Apple’s unique micro economy. Comparatively, New Yorkers have experienced the steepest price increases in transportation (higher cab and subway fares give this category a boost) and groceries, meanwhile rent, dinners out and cocktails continue to be more and more costly. So what gives? Rising inflation despite lower incomes? The answer lies in the tug of war between less cash pay on Wall Street and a very active foreign investment market that is driving up real estate prices.
This is just the latest revelation in the stealth inflation and food fraud theme we have written about frequently in recent months. The non-profit group Oceana took samples of 1,215 fish sold in the U.S. and genetic tests found that that 59% of those labeled tuna were mislabeled. It seems that “white tuna” should be avoided in particular as “84% of fish samples labeled “white tuna” were actually escolar, a fish that can cause prolonged, uncontrollable, oily anal leakage.” Oh and if you live in New York City or Southern California, you should pay particular attention if you're heading to Sushi!!
Bottom line? $100 an hour is the minimum wage for a person with a family in NY. The Prez is offering $9.
In a world in which the NSA has access to everything, including - soon - one's bank accounts, because "the government is there to protect you", it was only a matter of time before the logical extension of abdicating all privacy was enforced in the city that never sleeps, and which ended up with 24/7 vigilant "alarm clocks" in the form of unmanned aerial vehicles, aka drones, "for the sake of security." From RT: "The head of the New York City Police Department announced this week that the largest local law enforcement agency in the United States might soon rely on spy drones for conducting surveillance. During an open conversation held Thursday between Reuters editor-in-chief Stephen Adler and NYPD Commissioner Ray Kelly, the chief of police confirmed that New York’s boys in blue aren’t entirely opposed to acquiring an unmanned aerial vehicle for the sake of security. “We’re looking into it," Kelly reportedly told an audience at the 92nd Street Y Thursday evening. “Anything that helps us.”
It’s my understanding that Synthes has another headache on its hands.
Everyone is safely home, tucked in and patiently waiting for the perfect storm to rage and ravage the Big Apple. Everyone - including the algos in just over 1 hour. Everyone.... except for Friday's "ramp the market in the last hour or else" workhorse - NYFed analyst/trader Kevin Henry...
It would be like Congress dropping stink bombs on Times Square.
From the BBC: "Facebook has started testing a system that lets users pay to highlight or promote posts. Facebook said the goal was to see if users were interested in paying to flag up their information." That’s their plan? That’s Zuckerberg’s big idea? Get users to pay to post premium content!? Did the well-circulated hoax that Facebook planned to get users to pay for use just turn out to be true? If they proceed with this (unlikely) it seems fairly obvious the world would say goodbye Facebook, hello free alternatives. The truth is that Facebook is a toy, a dreamworld, a figment of the imagination. Zuckerberg wanted to make the world a more connected place (and build a huge database of personal preferences), and he succeeded thanks to a huge slathering of venture capital. That’s an accomplishment, but it’s not a business. While the angel investors and college-dorm engineers will feel gratified at paper gains, it is becoming hard to ignore that there is no great profit engine under the venture. In fact, the big money coming into Facebook just seems to be money from new investors — they raised eighteen times as much in their flotation yesterday as they did in a whole year of advertising revenue. For an established company with such huge market penetration, they’re veering dangerously close to Bernie Madoff’s business model.
ConvergEx's annual analysis of Super Bowl economics shows that, when the time and place is right, prices can soar like a Hail Mary pass to clinch the playoffs. Yes, the face value for tickets is unchanged in the last year - $800 to $1,200. But the street price for a ticket to the big game will set you back at least $2,000, and the average ticket is running closer to $4,000. The good news, sort of, is that there has been no inflation for the “Cheapest” seats since last year, when they were also two grand. And that is despite a smaller stadium this time around (68,000 versus +80,000). A signal about the stagnating confidence of the high end consumer? Perhaps. Nic Colas goes to note that to get into Super Bowl #1 would have cost you all of $12. That was in Los Angeles in 1967. And the best seat in the house. From there stated ticket prices went to $50 in 1984, $100 in 1988 and $500 in 2003. Now, the prices printed on the ticket for the Indianapolis game this Sunday are between $800 and $1,200. As the accompanying chart shows, this is an inflation rate of around 8,900% for the period, versus 687% for the Consumer Price Index. One thing we know – next year it won’t be a problem to set a new street price for the Super Bowl, regardless of whatever the economy may bring. It is in New Orleans.
As of Q3 2011, the citizens of less than 20% of the countries involved in Nielsen's Global Consumer Confidence, Concerns, and Spending Intentions Survey were on average confident in their future economic confidence. Not surprisingly, Nic Colas of ConvergEx points out, six were in Asia, the least confident were in Eastern and Peripheral European nations, and furthermore overall global consumer confidence remains 9.3% below 2H 2006 (and 6.4% below Q4 2010) readings as the global economy still has a long way to get its 'mojo' back. Colas points to the fact that 'confidence is an essential lubricant of any capitalist-based system' and one of the key challenges that worst hit Europe (and other regions and nations) face is capital markets that are assessing the long shadow of the Financial Crisis of 2007-2008 and the ongoing European sovereign debt crisis impact on the world's Consumer Confidence.
Some fireworks go off.