An optimistic view from Goldman's Abby Joseph Cohen

If you don't see the video go here.

Review of Paychex (PAYX, Dividend Growth Portfolio)

Paychex Inc (PAYX) provides computerized payroll-accounting services, salary deposit services, automatic payroll tax payment and tax return filing services and human resource products and services to approximately 536,000 small and medium sized businesses.

The company has earned a 25%+ return on equity over the last 10 years and has grown profits and dividends 13-18% in the same time period. While the weak employment environment will resulted in a slight faltering in earnings over the past two years, PAYX should resume growing profits in 2011 as a result of:

(1) improved demand in the human resources division,

(2) increased sales of ancillary services,

(3) an aggressive cost reduction program.

Negatives:

(1) the company’s client base is not expanding due lack of job creation and business formation,

(2) low interest rates are impacting ‘interest on funds held for clients’.

PAYX is rated A by Value Line, has no debt and its stock yields 3.6%.

Morning Journal 8/31/11

Economics

This Week’s Data

Weekly mortgage applications fell 9.6% but the all important purchase applications rose 0.9%
http://www.calculatedriskblog.com/2011/08/mba-mortgage-purchase-activity-near-15.html

Other

According to the MIT project, inflation just hit 4% (short):
http://www.zerohedge.com/news/annual-inflation-hits-4

Politics

Before the Bell

The Market

Technical

I was a bit surprised that the indices (DJIA 11559, S&P 1212) were able to extent to a new (third) higher high yesterday. However, in doing so, they (1) strengthen the setting of a very short term up trend and (2) remain well within their intermediate term trading ranges (10725-12919, 1101/1172-1372). On any sell off I am now focused on the rising lower boundary of that short term up trend which now intersects at circa 10964, 1134.

Volume was flat; breadth declined. The VIX was basically unchanged--still a negative for stocks.

A great interview with David Malpass on the dollar and Fed policy

@AllAmerInvest (8-31)

U.S. Probes Oracle Dealings
http://on.wsj.com/oMsSoo

By Bob DeMarco
All American Investor

ADP Payrolls As-Advertised; Market Carries On With Rally
http://on.wsj.com/nrx8r8

30-Year Conventional Mortgage Rate (8-30)

Fixed mortgage rates followed Treasury bond yields higher this week while data reports suggest an improvement in the housing market.

All American Investor

Universal Corp (UVV)

Universal Corp (UVV) is the world’s largest leaf tobacco importer/exporter. The company purchases, processes and sells flue-cured and burly tobacco to cigarette, pipe tobacco and cigar manufacturers. Profits and dividends have grown 4-6% over the past 10 years while earning an 8-12% return on equity. Profits and dividends should resume growth as a result of:

(1) increased operating efficiencies,

(2) its continuing aggressive stock buyback program.

Negatives:

(1) several major cigarette companies are developing direct tobacco leaf sourcing,

(2) global leaf production is expected to reach over supply,

(3) continuing health concerns.

The Conference Board Consumer Confidence Index® Declines (8-30)

The Conference Board Consumer Confidence Index®, which had improved slightly in July, plummeted in August.

The Index now stands at 44.5 (1985=100), down from 59.2 in July.

The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 last month.

All American Investor

Nationally, Home Prices Went Up in the Second Quarter of 2011 According to the S&P/Case-Shiller Home Price Indices

Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index increased by 3.6% in the second quarter of 2011, after having fallen 4.1% in the first quarter of 2011.

With the second quarter’s data, the National Index recovered from its first quarter low, but still posted an annual decline of 5.9% versus the second quarter of 2010. Nationally, home prices are back to their early 2003 levels.

All American Investor

New data this morning

The International Council of Shopping Centers reported month sales of major retailers rose 1.0% versus the prior week and up 3.0% versus the comparable period last week; Redbook Research reported month to date retail chain store sales up 1.0% versus the similar timeframe last month and up 4.0% on a year over year basis.

Morning Journal-8/30/11

Economics

This Week’s Data

July pending home sales fell 1.3% versus expectations of a decline of 1.0%.

Other

A very thorough review of household income from Doug Short (medium):
http://advisorperspectives.com/dshort/updates/Household-Income-Distribution.php

More positive anecdotal evidence on the economy (short):
http://mjperry.blogspot.com/2011/08/positive-economic-news-roundup.html

US exports to China (short):
http://mjperry.blogspot.com/2011/08/us-exports-to-china-grew-4-times-faster.html

Politics

International War Against Radical Islam

Andrew McCarthy on the Islamization of Europe (long):
http://www.nationalreview.com/articles/275686/losing-malmo-andrew-c-mccarthy

The Market, Technical (8-30)

The Averages (DJIA 11539, S&P 1210) had a great day with both index closing well within their intermediate term trading ranges (10725-12919, 1101/1172-1372). The very good news is that not only did prices break through the down trend line connecting the series of lower (thus, breaking the pennant formation to the upside) highs but also made a third higher high. That sets the short term up trend to up but leaves the intermediate term trading range in tact.

Volume was down; breadth was mixed. The VIX was down 9% but is still at the upper end of its trading range--a negative for stocks.

@AllAmerInvest (8-30) Robert Shiller Edition Plus More

Robert Shiller joined Consuelo Mack on WealthTrack this past weekend to discuss the ongoing problems in the economy. Shiller of course is notable for having predicted both the Nasdaq bubble and the housing bubble. He remains one of the few academics who understands how markets and the broader economy relate to one another.

Personal Consumption Expenditures: Chain-type Price Index (Chart, 8-29)

All American Investor

Personal consumption expenditures (PCE) increased $88.4 billion, or 0.8 percent. In June, personal income increased $27.7 billion, or 0.2 percent, DPI increased $22.6 billion, or 0.2 percent, and PCE decreased $14.3 billion, or 0.1 percent, based on revised estimates.

Dennis Gartman on the latest developments in Greece

If you don't see the video go here.

PERSONAL INCOME AND OUTLAYS: JULY 2011

Personal income increased $42.4 billion, or 0.3 percent, and disposable personal income (DPI) increased $32.5 billion, or 0.3 percent, in July, according to the Bureau of Economic Analysis.

By Bob DeMarco
All American Investor

Personal consumption expenditures (PCE) increased $88.4 billion, or 0.8 percent. In June, personal income increased $27.7 billion, or 0.2 percent, DPI increased $22.6 billion, or 0.2 percent, and PCE decreased $14.3 billion, or 0.1 percent, based on revised estimates.

Commercial and Industrial Loans at All Commercial Banks (8-29)

All American Investor

The Market, Technical, Monday Morning Chartology (8-29)

The Market  Technical Monday Morning Chartology

You can see very clearly the trends of higher lows and lower highs. Technically speaking, the direction of a break tends to portend the direction of a new trend.

@AllAmerInvest (8-29) Powell on Cheney and More

The Amazon Tablet 
http://bit.ly/prRjCU


By Bob DeMarco
All American Investor

China Widens Base of Reserve Ratio to Control Liquidity, Limit Inflation
http://bloom.bg/oM0uas

Defending the Dollar
http://bit.ly/pDKEHI

Credit expansion reversed in 2008, and this is deflation by definition

All American Investor

Credit expansion reversed in 2008, and this is deflation by definition. Despite the talked-up attempts to monetize debt through quantitative easing - a deliberate attempt to stoke inflation fears in order to counteract the psychology of deflation - money plus credit has been in net contraction. Talk of monetary growth based on only the money fraction misses the elephant in the room, since the vast majority of the effective money supply is credit, and the tightening of credit is by far the dominant factor.

Rebuilding to Lessen Irene's Economic Punch

Early estimates of the direct damage caused by Hurricane Irene are in the range of $7 billion.

Add to those the loss of about one or two days of economic activity spread over a week across 25% of the economy, and an initial estimate of the losses imposed by Irene is about $25 billion to $30 billion.

The Amazing Steve Jobs Story

He ranks in the industrial pantheon along with Edison and Ford.

All American Investor

People will be trying to isolate and bottle the "leadership secrets of Steve Jobs" till the end of business time. But of course it's impossible.

His story isn't just the story of a person, but the combination of time, place and person, spawning a career in industrial design of awesome proportions. Mr. Jobs founded two pivotal companies in American history. Both happened to be named Apple. One was the Apple of the Macintosh, the other was the Apple of the iPhone.

From the beginning, he saw the human possibility in the extraordinarily complex hardware and software engineering of digital devices. The Macintosh should work in a way that's intuitive, that doesn't require an owner's manual. And today you only need to survey the blogosphere or friends with toddlers to hear stories of 3-year-olds picking up an iPad and quickly sussing out what it's for.

Read The Amazing Steve Jobs Story

HOW WILL AMERICA HANDLE ITS SENIOR MOMENT?

As tens of millions of members of the Baby Boomer generation rapidly near retirement age, America is in need of innovative new solutions that will help it prepare for an unprecedented aging of its population.

All American Investor

This Week in Review (8-27)

Statistical Summary
Current Economic Forecast

2010 (revised)

Real Growth in Gross Domestic Product: +2.5- +3.5%
Inflation: 1-2 %
Growth in Corporate Profits: 10-20%

2011

Real Growth in Gross Domestic Product: +1.5- +2.5%
Inflation: 2-3 %
Growth in Corporate Profits: 7-12%

An Animated 4-Minute History of Econ

By Bob DeMarco
All American Investor



Tip of the hat to GREG MANKIW.

The EU debt problem is not going away (Video)

The Innovation Secrets of Steve Jobs

All American Investor

Carmine gave a talk based on his book The Innovation Secrets of Steve Jobs to a group of advertising executives in Dusseldorf Germany.

Carmine reviews each of the 7 principles outlined in the book.

Rick Santelli on consumer sentiment

By Steve Cook
All American Investor

Is Another Test on the Way?

By Steve Cook
All American Investor

Technical

The indices (DJIA 11149, S&P 1159) ended their winning streak yesterday. The DJIA finished the day within its intermediate term trading range (10725-12919). The S&P dropped back below the 1172 level, furthering the argument that 1101 will ultimately mark the lower boundary of the S&P intermediate term trading range (1101/1172-1372)--that is, if stocks are not setting up for another leg down.

@AllAmerInvest (8-26) Bernanke, Roubini, Romney

ROUBINI: "The New QE Season Is About To Start As Advanced Economies Sink Into A Double Dip"

http://read.bi/pZPoui

By Bob DeMarco
All American Investor

Ted Spread Surging Beware

By Bob DeMarco
All American Investor

The TED spread is beginning to surge. This bears close watching.

So far from 16 to 32 basis points in the last month.

This could end up indicating problems in the banking system, and then the economy.

UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT (Week Ending 8-20)

Special Factor: As a result of a labor dispute between Communications Workers of America and Verizon Communications, at least 12,500 initial claims were filed in the week ending 8/13/2011 and at least 8,500 initial claims were filed in the week ending 8/20/2011 .

All American Investor

In the week ending August 20, the advance figure for seasonally adjusted initial claims was 417,000, an increase of 5,000 from the previous week's revised figure of 412,000.

The 4-week moving average was 407,500, an increase of 4,000 from the previous week's revised average of 403,500.

Technical Update (8-25)

The indices (DJIA 11320, S&P 1177) showed good follow through yesterday. The DJIA remains within its intermediate term trading range (10725-12919). 


The S&P actually recovered above the 1172 recent lower boundary (on the fifth day following the break below 1172) of its intermediate term trading range, confusing me further as to whether it or 1101 will ultimately mark the lower boundary of its intermediate term trading range (usually I use three to four days to confirm a break).

By Steve Cook
All American Investor

@AllAmerInvest Steve Jobs Edition

Inflation is not the answer

It's a sign of desperation that the latest cure being suggested for the ailing economy is higher inflation. In the 1970s and early 1980s, inflation (peaking at 13 percent in 1979 and 1980) was a national curse. Now, it's being advanced as an antidote to high unemployment and meager economic growth. It's bad advice for the Federal Reserve, which holds its annual research retreat at Jackson Hole, Wyo., this week. What seems plausible in the classroom would probably backfire in the real world.

The economy's central problem today is lack of confidence - fear - reflecting enormous uncertainty. Business managers and consumers don't know what to expect. Facing stubborn joblessness, falling home values and volatile stock prices, they have become reflexively defensive. They hoard and hold back. A deliberate policy of higher inflation risks compounding the uncertainty and poisoning psychology even more.

Inflation is not the answer
http://wapo.st/q2JQE4

By Bob DeMarco
All American Investor


Steve Jobs

Apple After Jobs Still a ‘Buy,’ Analysts Say
http://on.wsj.com/nQJpj0

The 13 Most Memorable Quotes From Steve Jobs
http://read.bi/nN4cSL

Morning MarketBeat Daily Factoid:

• Apple’s share price at the time of its IPO in December 1980 was $2.75, adjusted for splits.

• Apple’s share price on May 31, 1985, when Steve Jobs was stripped of his power before being shown the door, was $1.98. 

• Apple’s share price on Dec. 20, 1996, when Mr. Jobs returned to the company as a consultant, was $5.88. 

• Apple’s share price on August 24, 2011, when Mr. Jobs resigned as CEO, was $376.18.

Technical Update (8-24)

The Averages (DJIA 11516, S&P 1162) rallied hard yesterday, leaving the DJIA solidly within its intermediate term trading range (10725-12929).

By Steve Cook
All American Investor

Unfortunately, the S&P remained below the lower boundary of its intermediate term trading range (1172-1372). Yesterday was the fourth day of its challenge to the 1172 level and that is usually sufficient to confirm a break. And I am making that call.

So the issue is now, is 1101 the real lower boundary (see yesterday’s Morning Call for a full discussion) or has the S&P re-set to a down trend? Arguing for the former is that the indices rallied off the 10791, 1120 level (the low in the recent test of the early August lows [10725, 1101]--(again, see yesterday’s Morning Call for more detail); so we now have a successful test of the August lows at a higher low. Further, yesterday’s rally was on decent volume and breadth.

Opening Pandora’s box: A new look at the industrial revolution

Amplify’d from www.voxeu.org

Tony Wrigley Former Professor of Economic History, Cambridge University and Master of Corpus Christi College

Before the industrial revolution, economists considered output to be fundamentally constrained by the limited supply of land. This column explores how the industrial revolution managed to break free from these shackles. It describes the important innovations that made the industrial revolution an energy revolution.

The most fundamental defining feature of the industrial revolution was that it made possible exponential economic growth – growth at a speed that implied the doubling of output every half-century or less. This in turn radically transformed living standards. Each generation came to have a confident expectation that they would be substantially better off than their parents or grandparents. Yet, remarkably, the best informed and most perspicacious of contemporaries were not merely unconscious of the implications of the changes which were taking place about them but firmly dismissed the possibility of such a transformation. The classical economists Adam Smith, Thomas Malthus, and David Ricardo advanced an excellent reason for dismissing the possibility of prolonged growth.

U.S. Bank CDS Above 2010 High, Worse Than Bear Stearns Peak, Closing in on Lehman Levels

Amplify’d from www.donfishback.com

Unsettling data point: The U.S. Bank CDS Average is above the level it peaked at in March 2008 and May 2010.  The only time it was higher was during the height of the financial crisis in late-2008 and early-2009.

See more at www.donfishback.com

 

See this Amp at http://amplify.com/u/a1bruc

Is The Banking System Back To 2008?

Amplify’d from seekingalpha.com

One of the many enjoyable acronyms that became household names in 2008 was CDS – credit default swap. As most investors know by now, these instruments were created to protect bondholders from default. Of course, what we found out in 2008 was that they really just shifted the risk from one investor to the other. Sort of like tossing a hand grenade in a circle hoping you aren’t the one holding it when it goes boom. And as Wall Street imploded on itself in 2008 this game of toss the grenade became increasingly expensive to play as evidenced by the surging cost to avoid the grenade (surging cost of CDS). What’s frightening about the developments in Europe in recent weeks is that the CDS market is once again sending the same signals. Someone is going to get left holding the grenade again. And this time, the market is actually telling us that it’s even worse than it was in 2008. The only difference is that the problems appear to be across the pond.

@AllAmerInvest Real Money

Nation's weather extremes may be the new normal

http://lat.ms/nW4bd9

By Bob DeMarco
All American Investor

Yes, There’s Real Money at the Top
http://bit.ly/nD8FLa

Study: 8 in 10 lawmakers lack education in economics
http://politi.co/pvvTOW

30-Year Conventional Mortgage Rate, Rates at All Time Low (Chart, 8-23)

By Bob DeMarco
All American Investor

Mortgage rates hit an all-time low according to Freddie Mac's Primary Mortgage Market Survey.

30-year fixed-rate mortgages averaged 4.15% last week. 15-year fixed-rate mortgages averaged 3.36%.

@AllAmerInvest B of A and More

Here's Why Bank Of America's Stock Is Collapsing Again

In fact, in what is fast becoming a formal law of bank-stock thermo-dynamics, the more the bank insists that everything's fine, the more investors take this as a signal to run for the hills.

And given that Bank of America has now persuasively broken the $7 barrier and now has a mere $65 billion of equity value left, this death spiral can't continue much longer. (The good news, we suppose, is that the stock can't fall below zero).

http://read.bi/nSnrm4

By Bob DeMarco
All American Investor

Future skill shortages in the US economy? Sorting out the evidence
http://bit.ly/qBDNLC

Boomer Retirement: Headwinds for U.S. Equity Markets?

All American Investor

Historical data indicate a strong relationship between the age distribution of the U.S. population and stock market performance.

A key demographic trend is the aging of the baby boom generation.

As they reach retirement age, they are likely to shift from buying stocks to selling their equity holdings to finance retirement.

Statistical models suggest that this shift could be a factor holding down equity valuations over the next two decades.

http://bit.ly/qdYxCq

Gold ETF Now Bigger Than S&P 500 ETF

All American Investor

Ladies and gentlemen, here is today’s market in a nutshell:

GLD, the SPDR Gold Trust ETF, is now bigger in terms of assets than SPY, the SPDR S&P 500 ETF. GLD has $77 billion in assets, compared with $75 billion for SPDR, according to Dave Lutz at Stifel Nicolaus.

At last check, GLD was up more than 2%, compared with SPY, up about 0.3%.


Gold ETF Now Bigger Than S&P 500 ETF http://on.wsj.com/npvxzT

The Morning Call (8-22)

By Steve Cook
All American Investor

Monday Morning Chartology

The S&P is in a critical position. If it bounces off the 1101 level and recovers above 1172, the Market will simply have endured a significant test. Breaking 1101
suggests more downside (1041, 1009).

You can clearly see the magnitude of GLD’s extension above its long term up trend.

Here is another technical opinion:
http://advisorperspectives.com/dshort/charts/large.html?guest/110819-Gold.gif

The VIX is high but not rising versus the prior week.

@AllAmerInvest (8-22) Dangerously close to recession”

“Dangerously close to recession” — earnings edition

Or, earnings recession risk, and still not getting it in equities.

Interesting spot from Morgan Stanley’s European equities analysts, following the bank’s major downgrade of global growth forecasts and its belief that Europe in particular is “dangerously close” to recession.

European earnings growth forecasts were more than halved for 2011, (from 12 per cent to 5 per cent) which is about where Morgan Stanley reckons they should be given growth of about 2 per cent and is where investors have probably priced in.

http://on.ft.com/qx24cy

By Bob DeMarco
All American Investor

Wall Street Aristocracy Got $1.2 Trillion in Secret Fed Loans http://bloom.bg/o5K348

Merkel Swears She Doesn't Care If Financial Markets Crash -- She's Not Doing Eurobonds
http://read.bi/n36InK

Housing Starts: New Privately Owned Housing Units Started (Chart, 8-19)

Privately owned housing starts in July were at a seasonally adjusted annual rate of 604,000.

By Bob DeMarco
All American Investor

This is 1.5 percent (±10.7%) below the revised June estimate of 613,000, but is 9.8 percent (±10.8%)* above the July 2010 rate of 550,000.

Single-family housing starts in July were at a rate of 425,000; this is 4.9 percent (±8.9%)* below the revised June figure of 447,000.

The July rate for units in buildings with five units or more was 170,000

M2 Money Supply (Chart, 8-19)

M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs).

By Bob DeMarco
All American Investor

Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

Reserve Bank Credit (Chart, 8-19)

The Board's H.4.1 statistical release ("Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks") for August 17, 2011, released today, understated the average amount of marketable securities held in custody for foreign official and international accounts.

By Bob DeMarco
All American Investor



The weekly average value of the "Marketable securities held in custody for foreign official and international accounts" for the week ended Wednesday, August 17, 2011, was corrected from $2,981,694 million
to $3,478,623 million.

The weekly average value of "U.S. Treasury securities" held in custody for the week ended Wednesday, August 17, 2011, was corrected from $2,352,395 million to $2,744,281 million, and the weekly average value of "Federal agency securities" held in custody for the week ended Wednesday, August 17, 2011, was corrected from $629,299 million to $734,343 million.

@AllAmerinvest (8-21)

Taxing Capital Gains at Ordinary Rates: Evidence Says Do It…So Does Buffet

Why not tax capital gains as ordinary income?

That’s an old chestnut among those of us who believe that the differential between tax rates on different types of income causes more harm than good.

James Stewart has a great piece in today’s NYT asking this question. The usual objection to increasing the rate on capital gains—that’s the money you get when you sell an asset for more than you paid for it—is that it will discourage investment.

And once again, we have a great quote from Warren Buffett:

“I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.”

http://bit.ly/rbB2V8

By Bob DeMarco
All American Investor

A Look at George Soros' Long-Term Holdings
http://bit.ly/pAcWkh

Is Meritocracy Good?
http://bit.ly/pJHCOM

Number of the Week: 4.6%
http://on.wsj.com/p1f0rz

@AllAmerinvest (8-20)

Many unhappy returns -- August is on track to be one of the worst months ever for hedge funds

WITH bold promises of strong returns in good times and bad, hedge funds have seduced many an investor.

But as often happens when a courtship develops into something more serious, blind love has been followed by a bitter let-down. Hedge funds first disappointed investors en masse in 2008, when the average fund fell by 19%. Since then they have struggled to beat the market (see chart).

This year performance has continued to be lackluster. The hedge-fund industry needs to produce outsize returns for the rest of 2011 if it is to restore its reputation.

Read more Many unhappy returns ...

By Bob DeMarco
All American Investor

Bottoming is a messy process

In retrospect, from a contrarian point of view, it was far too suspicious that many were so quick to declare that last week’s intra-day low was a bottom.

Bottoms are rarely so neat and tidy, and are rarely accompanied by an eagerness to declare it as such.

Subscriber Alert CATO, ORCL

By Steve Cook
All American Investor

The stock price of Cato (CATO) has traded into it Buy Value Range. Accordingly, it is being Added to the High Yield Buy List. The High Yield Portfolio already owns a one half position in CATO and additional shares will be Bought at the
appropriate time.

The stock price of Oracle (ORCL) has traded into its Buy Value Range. Accordingly, it is being Added to the Aggressive Growth Buy List. A one half position will be Bought at the appropriate time.

From CJS Research





Original content Steve Cook, All American Investor

@allAmerInvest (8-19)

The Wrong Idea

Stocks on Wall Street dropped sharply on Thursday, with investors spooked, again, about the euro-zone debt crisis and the sputtering United States economy.

Yet, even at this hour, leaders on both sides of the Atlantic seem determined to handcuff fiscal policies — the main tools that can increase jobs, consumer demand and economic growth — with an unquestioning devotion to rigid austerity.

The Wrong Idea
http://nyti.ms/nM1Mn7

By Bob DeMarco
All American Investor

Treasury Yields Fall to Historic Lows as Stocks Plunge
http://on.wsj.com/qG0x7A

Consumer Price Index Chart (8-18)

By Bob DeMarco
All American Investor

The Consumer Price Index for All Urban Consumers (CPI-U) increased0.5 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.6 percent before seasonal adjustment.

Student Loans Have Grown 511% Since 1999

Amplify’d from www.theatlantic.com

You think the housing bubble was enormous? Meet the education bubble. On Wednesday, an article here by Andrew Hacker and Claudia Dreifus explained the debt crisis at American colleges. But some startling statistics will help to make their analysis a little more tangible. The growth in student loans over the past decade has been truly staggering.

Consumer Price Index July 2011 -- Economic New Release

All American Investor

The Consumer Price Index for All Urban Consumers (CPI-U) increased0.5 percent in July on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.6 percent before seasonal adjustment.

The gasoline index rebounded from previous declines and rose sharply in July, accounting for about half of the seasonally adjusted increase in the all items index. The food at home index accelerated in July and also contributed to the increase, as dairy and fruit indexes posted notable increases and five of the six major grocery store food groups rose.

REAL EARNINGS -- Economic News Release

All American Investor

REAL EARNINGS JULY 2011

All employees

Real average hourly earnings for all employees fell 0.1 percent from June to July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. A 0.4 percent increase in average hourly earnings was more than offset by a 0.5 percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

Real average weekly earnings fell 0.1 percent over the month, as a result of the decrease in real averagehourly earnings, while average weekly hours remained unchanged. Since reaching a recent peak in October 2010, real average weekly earnings have fallen 1.3 percent.

Real average hourly earnings fell 1.3 percent, seasonally adjusted, from July 2010 to July 2011. A 0.3 percent increase in average weekly hours combined with the decrease in real average hourly earnings resulted in a 1.0 percent decrease in real average weekly earnings during this period.

@AllAmerInvest (8-18)

Consumer Price Index Summary

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July on a seasonally adjusted basis, the U.S. Bureauof Labor Statistics reported today. Over the last 12 months, the all items index increased 3.6 percent before seasonal adjustment.

Detailed Report http://1.usa.gov/oAIwn3

Real Earnings http://1.usa.gov/r5WWiE

REAL EARNINGS JULY 2011

All employees

Real average hourly earnings for all employees fell 0.1 percent from June to July, seasonally adjusted, the
U.S. Bureau of Labor Statistics reported today. A 0.4 percent increase in average hourly earnings was
more than offset by a 0.5 percent increase in the Consumer Price Index for All Urban Consumers (CPI-
U).

Real average weekly earnings fell 0.1 percent over the month, as a result of the decrease in real average
hourly earnings, while average weekly hours remained unchanged. Since reaching a recent peak in
October 2010, real average weekly earnings have fallen 1.3 percent.

Real average hourly earnings fell 1.3 percent, seasonally adjusted, from July 2010 to July 2011. A 0.3
percent increase in average weekly hours combined with the decrease in real average hourly earnings
resulted in a 1.0 percent decrease in real average weekly earnings during this period.


By Bob DeMarco
All American Investor

NUS - Nu Skin

By Steve Cook
All American Investor

The Morning Call (8-18)

By Steve Cook
All American Investor

I have to have my wife at the hospital tomorrow morning at 5am for an out patient procedure and will be there till 11-12. So tonight is an abbreviated Morning Call.

Aricept Price Drops 90 Percent

You can buy generic Aricept, Donepezil, for $110 a year from a reputable retailer like Costco.

Less than a year ago the average retail price for a year was more than $2500.

Pfizer (PFE) is still selling branded generic Aricept at a higher price through its subsidiary Greenstone.

Read more at the Alzheimer's Reading Room

AllAmerInvest (8-17)

By Bob DeMarco
All American Investor

Producer Price Index

The Producer Price Index for finished goods rose 0.2 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This advance followed a 0.4-percent decrease in June and a 0.2-percent rise in May.

At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.2 percent in July, and the crude goods index declined 1.2 percent. On an unadjusted basis, prices for finished goods moved up 7.2 percent for the 12 months ended July 2011.

PPI detailed report

U.S. IMPORT AND EXPORT PRICE INDEXES - JULY 2011

U.S. import prices increased 0.3 percent in July, the U.S. Bureau of Labor Statistics reported today, after declining 0.6 percent the previous month.

Rising prices for both fuel and nonfuel imports contributed to the overall increase. In contrast, U.S. export prices fell 0.4 percent in July, the first decrease since the index declined 0.2 percent in July 2010.

All American Investor

@AllAmerInvest (8-16)

Stop Coddling the Super-Rich

Warren Buffett paid $6.9M in taxes last year.

While that sounds like a lot of money, it was only 17.4% of his income, about half as much as the average person who works for him paid and Buffett, unlike most people at the top - believes that is not fair. In his plainly worded NY Times Editorial, "Stop Coddling the Super Rich" the $47 Billionaire states:

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

http://nyti.ms/qaqozw

S&P death cross

Amplify’d from ftalphaville.ft.com

We aren’t big fans of technical analysis, but a lot of people are — which is why the following is generating a lot of interest in the City.

Time to Sell This Sucker's Rally?

Amplify’d from seekingalpha.com

Money Supply Explosion: It Doesn't Matter

Amplify’d from seekingalpha.com

Google to Acquire Motorola Mobility Supercharging Android

All American Investor

Since its launch in November 2007, Android has not only dramatically increased consumer choice but also improved the entire mobile experience for users.

Today, more than 150 million Android devices have been activated worldwide—with over 550,000 devices now lit up every day—through a network of about 39 manufacturers and 231 carriers in 123 countries. Given Android’s phenomenal success, we are always looking for new ways to supercharge the Android ecosystem. That is why I am so excited today to announce that we have agreed to acquire Motorola.

@AllAmerInvest (8-15)

By Bob DeMarco
All American Investor

Google And Motorola Explain The Big Acquisition
http://read.bi/nT3Mh8

Chinese equities – to retest lows?
http://bit.ly/qdfhOe

Empire State Ugly, Markets Distracted - MarketBeat
http://on.wsj.com/qkAfUo

Goldman: Where The Global Economy And World Markets Stand Right Now

Goldman's latest Global Opportunity Asset Locator report gives a nice summary of the global state of play from the perspective of its analysts.

The basic gist: Growth prospects have clearly weakened, but thanks to fears of specific crises, markets have overshot to the downside. Thus, risky assets are now cheap, safe-havens are expensive.

Growth will ultimately resume, and the policy outlook is now tilted towards loosening, with a greater than 50% chance the Fed embarks on a new round of QE.

AllAmerInvest (8-14)

Goldman's latest Global Opportunity Asset Locator report gives a nice summary of the global state of play from the perspective of its analysts.
http://read.bi/pxHdrm

By Bob DeMarco
All American Investor

12 Dividend Stocks With Strong Cash Flow Coverage, Bullish Options Sentiment
http://bit.ly/qk5XJl

Cupertino Reveals Details of Apple's Futuristic Spaceship Campus (Photos)
http://bit.ly/o9Ptcw

Deficits, Debt and the Downgrade: Implications for Financial Markets and the U.S. and World Economies

All American Investor

Was Standard & Poors justified in downgrading the U.S. credit rating to AA+ from AAA? Not at this point, says an analysis by Ross DeVol, the Milken Institute's chief research officer.

The rating agency's $2 trillion mistake has rattled markets and called into question the safety of U.S. Treasurys. It has also raised further doubts about S&P’s credibility.

DeVol points out that a key measure of future solvency shows the United States' prospects are superior to those of Germany, France, the U.K., Canada and Australia — all of which S&P rates AAA. And don't forget that S&P's involvement in rating mortgage-backed securities contributed to the financial crisis.

Net Free or Borrowed Reserves of Depository Institutions (Chart, 8-12)

By Bob DeMarco
All American Investor

The series is calculated by the Federal Reserve Bank of St.Louis.

From 2007-12-01, the definition changes to excess reserves minus discount window borrowings plus secondary borrowings.

St. Louis Source Base (Chart, 8-12)

All American Investor

Sum of currency in circulation, reserve balances with Federal Reserve Banks, and service-related adjustments to compensate for float. Calculated by the Federal Reserve Bank of St. Louis.

Reserve Bank Credit (Chart 8-12)

By Bob DeMarco
All American Investor

Reserve Bank credit is the sum of securities held outright, repurchase agreements, term auction credit, other loans, net portfolio holdings of Commercial Paper Funding Facility LLC, net portfolio holdings of LLCs funded through the Money Market Investor Funding Facility, net portfolio holdings of Maiden Lane LLC, net portfolio holdings of Maiden Lane II LLC, net portfolio holdings of Maiden Lane III LLC, float, central bank liquidity swaps, and other Federal Reserve assets.

SUBSCRIBER ALERT 8/12/11

By Steve Cook
All American Investor

The Averages (DJIA 11143, S&;P 1172) bounced hard yesterday, keeping the recent schizophrenic, roller coaster pin action in tact. I said yesterday that barring a significant rally, I expected a further plunge in prices.

Well, we clearly got the up tick. Importantly, both index closed at or above a major support level (10725, 1172) that had been violated on Wednesday--which under our time and distance discipline negates Wednesday’s decline and leaves 10725, 1172 as potential support levels.

AllAmerInvest AM (8-12)

All American Investor

Calculated Risk: Retail Sales increased 0.5% in July http://bit.ly/oFzyp9

BOOM: July Retail Sales Come In Strong, With Big Upward Revisions To The Previous Month http://read.bi/oLJiT7

Welcome to the stock-market matrix http://bit.ly/qdEuEG

Preference intensity: What Americans want | The Economist http://econ.st/qinpRq

Joseph Stiglitz's Plan For Fixing The Economy

All American Investor

Joseph Stiglitz is an economist and a Professor of Economics at Columbia University, teaching at the Business School, the School of International and Public Affairs, as well as in the department of Economics.

Here are some of his suggestions:

• Repeal tax-cuts for rich Americans.
• End wars in Iraq and Afghanistan that cost trillions of dollars.
• Increase stimulus and programs that would get Americans back to work because it will generate massive tax revenues.
• A Medicare D, with a provision that allows the government to negotiate prices instead of going with those set by pharmaceuticals. He believes this move alone could save the U.S. trillions.
• A "Homeowners Chapter 11" that would allow homeowners to continue to possess their homes, while they restructure their debt and continue to pay down their mortgages. He says, "It doesn't do any body any good to force these people out of their homes… An economy in which you have homeless people and empty homes doesn't make any sense, and that's where we're going."

If you don't see the video below go here.

AllAmerInvest AM (8-11)

By Bob DeMarco
All American Investor

Calculated Risk: Weekly Initial Unemployment Claims decline to 395,000 http://bit.ly/naLH7H

Jobless Claims Not Much Help, But Could've Been Worse - MarketBeat - WSJ http://on.wsj.com/q4XsVr

THE GREAT TECHNOLOGY SLOW DOWN http://on.io9.com/n7NzP6

June Trade Balance http://read.bi/qvc8DQ

SUBSCRIBER ALERT 8/11/11

By Steve Cook
All American Investor

The Averages (DJIA 10719, S&P 1120) had another rough day. Both took out another support level (10725, 1172). The problem now is that there is no further visible support until 9645, 1041. So technically speaking, there is nothing to suggest that this Market will bottom anytime soon.

Fundamentally, the US economy continues to limp along--not crater. The EU remains a problem and could ultimately impact US economic growth if the worse (multiple sovereign/bank bankruptcies) happens--although we need to keep in mind that our own financial institutions are in decent shape today; certainly more so than 2008. I continue to believe this sell off reflects the complete loss of confidence in the western political class--which in my opinion is warranted.

If I Were Chairman of the Fed

By Bob DeMarco
All American Investor

As the world watches London burn under the strain of economic uncertainty, Edelman warns it could happen here: "I think that you should watch very carefully for the possibilities of social unrest in this country unless Washington wakes up," he tells Big Think. It is already becoming a global conflagration.

How bad is our current predicament in the U.S.? Edelman tells Big Think:

If inflation is 2 percent but 60 percent of the inflation figure has to do with labor, who of course are shrinking in terms of salaries and income, then inflation is actually 6 percent. If inflation is actually 6 percent, and I think it’s more than that, and, at the same time, growth is 2 percent, we are in a recession.

Instead of remedying that situation, Congress's spending cuts will paralyze future growth and "will drive the economy into the kind of recession or depression that we had in the 1930s."

Santelli and Whitney: Battle Over Muni's

All American Investor

CNBC's Rick Santelli and Meredith Whitney, Meredith Whitney Advisory Group debate over munis, in a heated exchange.

Federal Reserve to Keep Interest Rates Low for Two Years

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. 
 The Committee currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013 -- FOMC

All American Investor


FOMC

Information received since the Federal Open Market Committee met in June indicates that economic growth so far this year has been considerably slower than the Committee had expected.

Indicators suggest a deterioration in overall labor market conditions in recent months, and the unemployment rate has moved up.

 Household spending has flattened out, investment in nonresidential structures is still weak, and the housing sector remains depressed. However, business investment in equipment and software continues to expand. 

Temporary factors, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan, appear to account for only some of the recent weakness in economic activity.

 Inflation picked up earlier in the year, mainly reflecting higher prices for some commodities and imported goods, as well as the supply chain disruptions. More recently, inflation has moderated as prices of energy and some commodities have declined from their earlier peaks. Longer-term inflation expectations have remained stable.

Google Chart, Filled the Gap, Which Way Next, Up or Down?

By Bob DeMarco
All American Investor

You will notice in the chart below that Google fill the gap it left in the daily bar chart. This might turn out to be an interesting technical trading development.

Which way next? Is Google Going Up or Down?

Last price 567.44. Up 21.42. +3.92% percent on the day at the moment.

Cash Gold the Wild Ride Chart 8-9

By Bob DeMarco
All American Investor

Gold is currently overbought, so its due for a rest. This is the statistically strongest time of the year for Gold. From now until February - March.

S&P 500 the Wild Ride Chart 8-9

By Bob DeMarco
All American Investor

Currently working off the monster oversold condition.

Watch for redemptions after 2 - 3 PM ET.

S and P 500 All Time High March 23, 2000, Historical Chart and Perspective

By Bob DeMarco
All American Investor

The S and P 500 closed over 1,000 for the first time on February 2, 1998. Closing price 1001.27

The S and P 500 closed at 1527.35 on March 23, 2000. The all time closing high.

S&P 500 Index 1960-1982 Historical Chart and Perspective

All American Investor

Look at the peaks and valleys on a percentage basis from high to low.

Take note the close on January 18, 1966 was 93.95. The close on August 12, 1982 was 102.42.

The market moved about 10 percent in 16 years.

Also notice, on October 10, 1975 the price closed at 62.28 down from a high close on January 5, 1973 of 119.87

So for 16 years the market went up and down but basically went no where.

Remind you of anything?

Faber On Bank Of America

Original content Bob DeMarco, All American Investor

The S&P Downgrade: Competence and Consequences

Amplify’d from economistsview.typepad.com

I was asked to comment on S&P's downgrade of long-term US debt:

The Consequences of the S&P Downgrade

As I explain, I don't expect much in the way of market or interest rate reaction to the downgrade. Also, I didn't mention this, but S&P's demonstrated incompetence on matters such as choosing the right baseline is another reason to ignore their pronouncement:

I Heard It Through The Baseline, by Paul Krugman: Oh, my. Treasury has a fact sheet explaining that $2 trillion error by S&P; it may sound technical, but to anyone who follows budget issues, it’s a doozy.

The Unpleasantness Continues

Excerpt.
Amplify’d from economistsview.typepad.com

Lots of moving pieces tonight as financial centers around the world prepare for the impact of the S&P downgrade of US debt and the ongoing Eurozone debt crisis.  The list:

ECB Finally Ready to Come to the Table.  The ECB is signaling they are prepared to buy up massive quantities of Italian and Spanish debt, hoping to put a firewall around the European debt crisis.  Of course, this isn’t the first firewall European leaders have set, to no avail.  Perhaps this time will be different.  Paul Krugman argues, I think correctly, that at least for Italy the issue is seemingly a liquidity crisis, not an insolvency crisis.

Liberals’ Strange Retreat on Government Spending

Excerpt.

Amplify’d from www.tnr.com

In the 1930s, as the world plunged into depression, there were two political factions that insisted nothing could be done: Marxists, who saw the depression as the death knell of capitalism, and laissez-faire economists, who believed that the only way to revive the economy was to let the depression takes its course like a bad storm at sea. Imagine my surprise in the wake of Thursday’s stock market crash to find a similar attitude toward the current downturn among liberals and mainstream economic thinkers.

Just the Facts: S&P's $2 Trillion Mistake

All American Investor

In a document provided to Treasury on Friday afternoon, Standard and Poor’s (S&P) presented a judgment about the credit rating of the U.S. that was based on a $2 trillion mistake.

After Treasury pointed out this error – a basic math error of significant consequence – S&P still chose to proceed with their flawed judgment by simply changing their principal rationale for their credit rating decision from an economic one to a political one.

S&P has said their decision to downgrade the U.S. was based in part on the fact that the Budget Control Act, which will reduce projected deficits by more than $2 trillion over the next 10 years, fell short of their $4 trillion expectation for deficit reduction.

Clearly, in that context, S&P considers a $2 trillion change to projected deficits to be very significant. Yet, although S&P's math error understated the deficit reduction in the Budget Control Act by $2 trillion, they found this same sum insignificant in this instance.

The Art of Naming a Business (InfoGraphic)

Source website

The Employment-To-Population Ratio Falls To 1953 Levels

Amplify’d from advisorperspectives.com

Unemployment is usually a lagging indicator that moves inversely with equity prices (top chart). Note the increasing peaks in unemployment in 1971, 1975 and 1982. The inverse pattern becomes clearer when viewed against real (inflation-adjusted) S&P Composite, with its successively lower bear market bottoms. The mirror relationship seems to be repeating itself with the current and previous bear markets.

THE EMPLOYMENT SITUATION -- JULY 2011

The number of unemployed persons (13.9 million) and the unemployment rate (9.1 percent) changed little in July. Since April, the unemployment rate has shown little definitive movement. The labor force, at 153.2 million, was little changed in July.

All American Investor

Total nonfarm payroll employment rose by 117,000 in July, and the unemployment rate was little changed at 9.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, retail trade, manufacturing, and mining. Government employment continued to trend down.

AllAmerInvest AM (8-5)

By Bob DeMarco
All American Investor

THE EMPLOYMENT SITUATION -- JULY 2011 http://bit.ly/nPZIxJ

Calculated Risk: July Employment Report: 117,000 Jobs, 9.1% Unemployment Rate http://bit.ly/pmMIdN

Unemployment Falls: Recession Fears Ease After Jobs Report - ABC News http://abcn.ws/nQOZdY

August Jobs Report: Objectively Bad, But Not Crashworthy - Seeking Alpha http://bit.ly/nWMpS7

The Truth About Fundamentals - NYTimes.com http://nyti.ms/qn5FGP

45.8 Million Americans Use food Stamps

Amplify’d from money.cnn.com

Manufacturers' New Orders: Durable Goods (Chart, 8-4)

Original content Bob DeMarco, All American Investor

European Lenders Finding it Hard to Fund Themselves

All American Investor

The European sovereign-debt crisis placed new strains on the Continent's banks on Wednesday amid signs that some lenders are finding it harder and more expensive to fund themselves.

The cash crunch for some European Union banks underscores the challenges that central bankers and regulators face in preventing the bloc's economic and debt problems from seeping into the bank-funding markets.

The barometers that central banks and analysts use to monitor stress aren't showing extremely heightened levels. But certain gauges are flashing warning signals: Bank funding from the European Central Bank increased and European banks and corporations have had to turn to the currency markets for dollar funding, instead of borrowing from one another or selling debt.

Signs of Stress on the Rise Across Europe

AllAmerInvest AM (8-4)

By Bob DeMarco
All American Investor

News and blips from the early morning August 4, 2011

Go to AllAmerInvest

Dollar Pops to the Upside

By Bob DeMarco
All American Investor

The Bank of Japan was seen buying more dollars against the yen on trading system EBS, extending an intervention campaign launched in Asian hours to reverse the Japanese currency's rally.

Japan intervened to weaken its currency

Birinyi Stocks Wildly Oversold

The seven-day slide that wiped out the 2011 gain in the Standard and Poor’s 500 Index is no reason to sell stocks, according to investors including Laszlo Birinyi and Barton Biggs.

By Bob DeMarco
All American Investor

The stock market is wildly oversold, according to a new note from Birinyi Research.

Three indicators on the Birinyi dashboard — the S&P 500′s 10-day advance/decline line, the S&P’s spread over its 50-day moving average, and the five-day average of the CBOE put/call ratio — are all signaling the market’s selloff has gone too far.

Facebook Investor Roger McNamee Explains Why Social Is Over

Microsoft's share of internet-connected devices has gone from 95% to under 50% in 3 years

You might want to pay attention, especially if you are looking for trends to exploit in your investing.

You might get some good long term ideas if you take the time to look beyond the obvious.

AllAmerinvest Early AM (8-3)

By Bob DeMarco
All American Investor

Research in Motion Smartphones: Too Little, Too Late? - MarketBeat http://on.wsj.com/qJcGo1

How Low Can the 10-Year Go? - MarketBeat http://on.wsj.com/oGNhUX

Wednesday FX Brief: Ratings Worries Hinder Dollar - Seeking Alpha http://bit.ly/roYE3s

AllAmerinvest PM (8-2)

Ranking the Presidents by G.D.P.

Amplify’d from economix.blogs.nytimes.com

They are listed in reverse order of growth.

Barack Obama, 1.2% annual G.D.P. growth rate (previously 1.5%) George W. Bush, 1.6% (previously 1.7%) George H.W. Bush, 2.1% Gerald Ford, 2.2% Dwight Eisenhower, 2.5% Richard Nixon, 3.0% Jimmy Carter, 3.2% Ronald Reagan, 3.5% Bill Clinton, 3.8% Lyndon B. Johnson, 5.0% John F. Kennedy, 5.4% Read more at economix.blogs.nytimes.com

 

See this Amp at http://amplify.com/u/a1a6wf