Thursday, August 30, 2012

Morning Journal-The future of bureaucracy


Economics

This Week’s Data


Second quarter corporate profits were down 5.3% from a revised prior estimate; however, they were up from the unadjusted number.

The latest Beige Book report described an economy that was continuing to grow albeit sluggishly (sound familiar?). It mentioned positives in retail sales and consumer credit reduction (see link starting with ‘The delinquency............’ below). Softness was noted in agriculture, manufacturing and exports.

Weekly jobless claims were flat with an upwardly revised number from the prior week.
http://www.calculatedriskblog.com/2012/08/weekly-initial-unemployment-claims-at.html

July personal income rose 0.3%, in line; personal spending was up 0.4%, in line; the personal consumption expenditure index as well as core PCE were flat versus estimate of +0.1%.

Other

The math of Maiden Lane III (medium):
http://www.realclearmarkets.com/articles/2012/08/29/the_new_york_feds_hat_tip_to_joe_cassano_99848.html

The delinquency rates in HELOC’s and student loans (medium):
http://www.zerohedge.com/news/heloc-delinquency-rates-hit-record-are-student-loans-next

I have spent some time worrying over higher oil and grain prices and what that may mean for our economy. Now comes a new but different concern---collapsing iron ore prices and what says about the Chinese economy (medium):
http://www.zerohedge.com/news/kangaroo-metals-mine-fortescue-trying-raise-15-billion-20-banks-iron-prices-implode

Politics

Domestic


Tax level cheat sheet (short):
http://gregmankiw.blogspot.com/2012/08/a-tax-level-cheat-sheet.html

A different approach to balancing the budget (short):
http://scottgrannis.blogspot.com/2012/08/the-myth-of-balanced-approach-to-fiscal.html

More regulatory shenanigans (medium):
http://michellemalkin.com/2012/08/29/obamas-sneaky-deadly-costly-car-tax/

A look into the future (medium and today’s must read):
http://www.steynonline.com/5109/the-paramilitarized-bureaucracies

News on Stocks in Our Portfolios

Brown Forman reported fiscal first quarter earnings per share of $.69 versus estimates of $.62



Steve Cook received his education in investments from Harvard, where he earned an MBA, New York University, where he did post graduate work in economics and financial analysis and the CFA Institute, where he earned the Chartered Financial Analysts designation in 1973. His 40 years of investment experience includes institutional portfolio management at Scudder, Stevens and Clark and Bear Stearns. Steve's goal at Strategic Stock Investments is to help other investors build wealth and benefit from the investing lessons he learned the hard way.